Cummins (CMI) 10-Q 2 May 23 2023 Q1 Quarterly report Financial data

DOCUMENT COVER Document

DOCUMENT COVER Document	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2023
Entity File Number	1-4949
Entity Registrant Name	CUMMINS INC.
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-0257090
Entity Address, Address Line One	500 Jackson Street
Entity Address, Address Line Two	Box 3005
Entity Address, City or Town	Columbus
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47202-3005
City Area Code	812
Local Phone Number	377-5000
Title of 12(b) Security	Common stock, $2.50 par value
Trading Symbol	CMI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding | shares	141,561,784
Common Stock, Par or Stated Value Per Share | $ / shares	$ 2.50
Entity Central Index Key	0000026172
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Document Quarterly Report	true
Amendment Flag	false
Document Transition Report	false

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
NET SALES (Notes 1 and 2)	$ 8,453	$ 6,385
Cost of sales	6,424	4,853
GROSS MARGIN	2,029	1,532
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses	753	615
Research, development and engineering expenses	350	298
Equity, royalty and interest income from investees	119	96
Other operating expense, net	19	111
OPERATING INCOME	1,026	604
Interest expense	87	17
Other income (expense), net	90	(9)
INCOME BEFORE INCOME TAXES	1,029	578
Income tax expense (Note 5)	223	155
CONSOLIDATED NET INCOME	806	423
Less: Net income attributable to noncontrolling interests	16	5
NET INCOME ATTRIBUTABLE TO CUMMINS INC.	$ 790	$ 418
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic (in dollars per share)	$ 5.58	$ 2.94
Diluted (in dollars per share)	$ 5.55	$ 2.92
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic (in shares)	141.5	142.2
Dilutive effect of stock compensation awards (in shares)	0.9	0.9
Diluted (in shares)	142.4	143.1

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
CONSOLIDATED NET INCOME	$ 806	$ 423
Other comprehensive income (loss), net of tax (Note 13)
Change in pension and other postretirement defined benefit plans	(9)	16
Foreign currency translation adjustments	82	4
Unrealized (loss) gain on derivatives	(3)	28
Total other comprehensive income, net of tax	70	48
COMPREHENSIVE INCOME	876	471
Less: Comprehensive income (loss) attributable to noncontrolling interests	19	(3)
COMPREHENSIVE INCOME ATTRIBUTABLE TO CUMMINS INC.	$ 857	$ 474

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) shares in Millions, $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 2.50
Common stock, shares authorized	500
Common stock, shares issued	222.5	222.5
Treasury stock, shares	80.9	81.2
Current assets
Cash and cash equivalents	$ 1,980	$ 2,101
Marketable securities	459	472
Total cash, cash equivalents and marketable securities	2,439	2,573
Trade and other	5,834	5,202
Inventories (Note 7)	5,878	5,603
Prepaid expenses and other current assets	1,217	1,073
Total current assets	15,368	14,451
Long-term assets
Property, plant and equipment	10,629	10,507
Accumulated depreciation	(5,039)	(4,986)
Property, plant and equipment, net	5,590	5,521
Investments and advances related to equity method investees	1,860	1,759
Goodwill	2,365	2,343
Other intangible assets, net	2,640	2,687
Pension assets (Note 3)	1,496	1,398
Other assets (Note 8)	2,114	2,140
Total assets	31,433	30,299
Current liabilities
Accounts payable (principally trade)	4,636	4,252
Loans payable (Note 9)	229	210
Commercial paper (Note 9)	2,545	2,574
Current maturities of long-term debt (Note 9)	569	573
Accrued compensation, benefits and retirement costs	510	617
Current portion of accrued product warranty (Note 10)	746	726
Current portion of deferred revenue (Note 2)	1,040	1,004
Other accrued expenses (Note 8)	1,648	1,465
Total current liabilities	11,923	11,421
Long-term liabilities
Long-term debt (Note 9)	4,409	4,498
Deferred revenue (Note 2)	937	844
Other liabilities (Note 8)	3,283	3,311
Total liabilities	20,552	20,074
Commitments and contingencies (Note 11)
Redeemable Noncontrolling Interest, Equity, Carrying Amount	261	258
Cummins Inc. shareholders' equity
Common stock, $2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued	2,230	2,243
Retained earnings	18,605	18,037
Treasury stock, at cost, 80.9 and 81.2 shares	(9,389)	(9,415)
Accumulated other comprehensive loss (Note 13)	(1,823)	(1,890)
Total Cummins Inc. shareholders' equity	9,623	8,975
Noncontrolling interests	997	992
Total equity	10,620	9,967
Total liabilities, redeemable noncontrolling interests and equity	$ 31,433	$ 30,299

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income	$ 806	$ 423
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization	246	161
Deferred income taxes	(38)	(66)
Equity in income of investees, net of dividends	(67)	(76)
Pension and OPEB expense (Note 3)	1	9
Pension contributions and OPEB payments (Note 3)	(92)	(43)
Russian suspension costs (Note 15)	0	158
(Gain) loss on corporate owned life insurance	(19)	37
Foreign currency remeasurement and transaction exposure	(11)	(7)
Changes in current assets and liabilities, net of acquisitions
Accounts and notes receivable	(621)	(417)
Inventories	(263)	(289)
Other current assets	(142)	(57)
Accounts payable	381	484
Accrued expenses	151	(251)
Changes in other liabilities	64	70
Other, net	99	28
Net cash provided by operating activities	495	164
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(193)	(104)
Acquisition of a business, net of cash acquired (Note 16)	0	83
Investments in marketable securities—acquisitions	(326)	(197)
Investments in marketable securities—liquidations (Note 6)	345	254
Other, net	(54)	(46)
Net cash used in investing activities	(228)	(10)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	43	14
Net payments of commercial paper	(29)	(2)
Payments on borrowings and finance lease obligations	(142)	(24)
Dividend payments on common stock	(222)	(207)
Repurchases of common stock	0	(311)
Other, net	(13)	33
Net cash used in financing activities	(363)	(497)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	(25)	27
Net decrease in cash and cash equivalents	(121)	(316)
Cash and cash equivalents at beginning of year	2,101	2,592
Cash and cash equivalents	$ 1,980	$ 2,276

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions	Total	Redeemable Noncontrolling Interest	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss	Total Cummins Inc. Shareholders' Equity	Noncontrolling Interests	us-gaap_Net Income in Total Equity Excluding Noncontrolling Interest Amount
Statement of Stockholders' Equity [Abstract]
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share)	$ 1.45
Redeemable noncontrolling interests (Note 12) at Dec. 31, 2021		$ 366
BALANCE AT BEGINNING OF PERIOD at Dec. 31, 2021	$ 9,035		$ 556	$ 1,543	$ 16,741	$ (9,123)	$ (1,571)	$ 8,146	$ 889
Increase (Decrease) in Shareholders' Equity
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest		(4)
CONSOLIDATED NET INCOME	423				418			418	9	$ 427
Other comprehensive income (loss), net of tax (Note 13)	48						56	56	(8)
Repurchases of common stock	(311)					(311)		(311)
Cash dividends on common stock	(207)				(207)			(207)
Distributions to noncontrolling interests	(14)								(14)
Share-based awards	9			(9)		18		9
Fair value adjustment of redeemable noncontrolling interests	(30)	30		(30)				(30)
Other shareholder transactions	14			(7)		4		(3)	17
Balance at End of Period Redeemable Noncontrolling Interest, Equity, Carrying Amount at Mar. 31, 2022		392
BALANCE AT END OF PERIOD at Mar. 31, 2022	$ 8,971		556	1,497	16,952	(9,412)	(1,515)	8,078	893
Statement of Stockholders' Equity [Abstract]
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share)	$ 1.57
Redeemable noncontrolling interests (Note 12) at Dec. 31, 2022	$ 258	258
BALANCE AT BEGINNING OF PERIOD at Dec. 31, 2022	9,967		556	1,687	18,037	(9,415)	(1,890)	8,975	992
Increase (Decrease) in Shareholders' Equity
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest		(8)
CONSOLIDATED NET INCOME	806				790			790	24	$ 814
Other comprehensive income (loss), net of tax (Note 13)	70						67	67	3
Cash dividends on common stock	(222)				(222)			(222)
Distributions to noncontrolling interests	(22)								(22)
Share-based awards	20			(5)		25		20
Fair value adjustment of redeemable noncontrolling interests	(11)	11		(11)				(11)
Other shareholder transactions	4			3		1		4	0
Balance at End of Period Redeemable Noncontrolling Interest, Equity, Carrying Amount at Mar. 31, 2023	261	$ 261
BALANCE AT END OF PERIOD at Mar. 31, 2023	$ 10,620		$ 556	$ 1,674	$ 18,605	$ (9,389)	$ (1,823)	$ 9,623	$ 997

NATURE OF OPERATIONS AND BASIS

NATURE OF OPERATIONS AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Overview Cummins Inc. (“Cummins,” “we,” “our” or “us”) was founded in 1919 as Cummins Engine Company, a corporation in Columbus, Indiana, and one of the first diesel engine manufacturers. In 2001, we changed our name to Cummins Inc. We are a global power leader that designs, manufactures, distributes and services diesel, natural gas, electric and hybrid powertrains and powertrain-related components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, axles, drivelines, brakes, suspension systems, electric power generation systems, batteries, electrified power systems, electric powertrains, hydrogen production and fuel cell products. We sell our products to original equipment manufacturers (OEMs), distributors, dealers and other customers worldwide. We serve our customers through a service network of approximately 460 wholly-owned, joint venture and independent distributor locations and more than 10,000 Cummins certified dealer locations in approximately 190 countries and territories. 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 were 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 (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements were 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, 20 2 2 . 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 required annual disclosures. Reclassifications Certain amounts for prior year periods were reclassified to conform to the current year presentation. Use of Estimates in Preparation of Financial Statements Preparation of financial statements 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. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. Weighted-Average Diluted Shares Outstanding The weighted-average diluted common shares outstanding exclude the anti-dilutive effect of certain stock options. The options excluded from diluted earnings per share were as follows: Three months ended March 31, 2023 2022 Options excluded 4,833 20,463 Related Party Transactions In accordance with the provisions of various joint venture agreements, we may purchase products and components from our joint ventures, sell products and components to our joint ventures and our joint ventures may sell products and components to unrelated parties. The following is a summary of sales to and purchases from nonconsolidated equity investees: Three months ended March 31, In millions 2023 2022 Sales to nonconsolidated equity investees $ 376 $ 344 Purchases from nonconsolidated equity investees 704 427 The following is a summary of accounts receivable from and accounts payable to nonconsolidated equity investees: In millions March 31, December 31, Balance Sheet Location Accounts receivable from nonconsolidated equity investees $ 469 $ 376 Accounts and notes receivable, net Accounts payable to nonconsolidated equity investees 370 292 Accounts payable (principally trade) Supply Chain Financing We currently have supply chain financing programs with financial intermediaries, which provide certain vendors the option to be paid by financial intermediaries earlier than the due date on the applicable invoice. When a vendor utilizes the program and receives an early payment from a financial intermediary, they take a discount on the invoice. We then pay the financial intermediary the face amount of the invoice on the original due date. The maximum amount that we may have outstanding under the program is $532 million at March 31, 2023. We do not reimburse vendors for any costs they incur for participation in the program, their participation is completely voluntary and there are no assets pledged as security or other forms of guarantees provided for the committed payment to the finance provider or intermediary. As a result, all amounts owed to the financial intermediaries are presented as accounts payable in our Condensed Consolidated Balance Sheets . Amounts due to the financial intermediaries reflected in accounts payable at March 31, 2023 and December 31, 2022, were $253 million and $331 million, respectively.

REVENUE RECOGNITION LONG-TERM C

REVENUE RECOGNITION LONG-TERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue from Contract with Customer	NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS Long-term Contracts The majority of our contracts are for a period of less than one year. We have certain long-term maintenance agreements, construction contracts and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for long-term maintenance agreements and construction contracts allocated to performance obligations that were not satisfied as of March 31, 2023, was $649 million. We expect to recognize the related revenue of $126 million over the next 12 months and $523 million over periods up to 10 years. See NOTE 10, "PRODUCT WARRANTY LIABILITY," for additional disclosures on extended warranty coverage arrangements. Our other contracts generally are for a duration of less than one year, include payment terms that correspond to the timing of costs incurred when providing goods and services to our customers or represent sales-based royalties. Deferred and Unbilled Revenue The following is a summary of our unbilled and deferred revenue and related activity: In millions March 31, December 31, Unbilled revenue $ 332 $ 257 Deferred revenue 1,977 1,848 We recognized revenue of $206 million for the three months ended March 31, 2023, compared with $240 million for the comparable period in 2022, that was included in the deferred revenue balance at the beginning of each year. We did not record any impairment losses on our unbilled revenues during the three months ended March 31, 2023 or March 31, 2022. Disaggregation of Revenue Consolidated Revenue The table below presents our consolidated sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer. Three months ended March 31, In millions 2023 2022 United States $ 4,802 $ 3,457 China 790 653 India 411 309 Other international 2,450 1,966 Total net sales $ 8,453 $ 6,385 Segment Revenue As previously announced, our Components segment reorganized its reporting structure to carve out the electronics business into the newly formed software and electronics business and combined the turbo technologies and fuels systems businesses into the newly formed engine components business. We started reporting results for the reorganized business in the first quarter of 2023 and reflected these changes for prior periods. Components segment external sales by business were as follows: Three months ended March 31, In millions 2023 2022 Axles and brakes $ 1,272 $ — Emission solutions 939 808 Filtration 342 308 Engine components 292 240 Automated transmissions 178 134 Software and electronics 20 27 Total sales $ 3,043 $ 1,517 Engine segment external sales by market were as follows: Three months ended March 31, In millions 2023 2022 Heavy-duty truck $ 860 $ 684 Medium-duty truck and bus 617 591 Light-duty automotive 441 487 Total on-highway 1,918 1,762 Off-highway 334 287 Total sales $ 2,252 $ 2,049 As previously announced, due to the indefinite suspension of operations in Russia, we reorganized the regional management structure of our Distribution segment and moved all Commonwealth of Independent States (CIS) sales into the Europe and Africa and Middle East regions. The Russian portion of prior period CIS sales moved to the Europe region. We started to report results for our new regional management structure in the first quarter of 2023 and reflected these changes for historical periods. Distribution segment external sales by region were as follows: Three months ended March 31, In millions 2023 2022 North America $ 1,693 $ 1,371 Asia Pacific 239 244 Europe 194 275 China 101 82 Africa and Middle East 62 50 India 57 48 Latin America 53 41 Total sales $ 2,399 $ 2,111 Distribution segment external sales by product line were as follows: Three months ended March 31, In millions 2023 2022 Parts $ 1,052 $ 926 Power generation 491 398 Engines 456 438 Service 400 349 Total sales $ 2,399 $ 2,111 Power Systems segment external sales by product line were as follows: Three months ended March 31, In millions 2023 2022 Power generation $ 380 $ 399 Industrial 189 188 Generator technologies 110 96 Total sales $ 679 $ 683

REVENUE RECOGNITION DISAGGREGAT

REVENUE RECOGNITION DISAGGREGATION OF REVENUES	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue from Contract with Customer	NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS Long-term Contracts The majority of our contracts are for a period of less than one year. We have certain long-term maintenance agreements, construction contracts and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for long-term maintenance agreements and construction contracts allocated to performance obligations that were not satisfied as of March 31, 2023, was $649 million. We expect to recognize the related revenue of $126 million over the next 12 months and $523 million over periods up to 10 years. See NOTE 10, "PRODUCT WARRANTY LIABILITY," for additional disclosures on extended warranty coverage arrangements. Our other contracts generally are for a duration of less than one year, include payment terms that correspond to the timing of costs incurred when providing goods and services to our customers or represent sales-based royalties. Deferred and Unbilled Revenue The following is a summary of our unbilled and deferred revenue and related activity: In millions March 31, December 31, Unbilled revenue $ 332 $ 257 Deferred revenue 1,977 1,848 We recognized revenue of $206 million for the three months ended March 31, 2023, compared with $240 million for the comparable period in 2022, that was included in the deferred revenue balance at the beginning of each year. We did not record any impairment losses on our unbilled revenues during the three months ended March 31, 2023 or March 31, 2022. Disaggregation of Revenue Consolidated Revenue The table below presents our consolidated sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer. Three months ended March 31, In millions 2023 2022 United States $ 4,802 $ 3,457 China 790 653 India 411 309 Other international 2,450 1,966 Total net sales $ 8,453 $ 6,385 Segment Revenue As previously announced, our Components segment reorganized its reporting structure to carve out the electronics business into the newly formed software and electronics business and combined the turbo technologies and fuels systems businesses into the newly formed engine components business. We started reporting results for the reorganized business in the first quarter of 2023 and reflected these changes for prior periods. Components segment external sales by business were as follows: Three months ended March 31, In millions 2023 2022 Axles and brakes $ 1,272 $ — Emission solutions 939 808 Filtration 342 308 Engine components 292 240 Automated transmissions 178 134 Software and electronics 20 27 Total sales $ 3,043 $ 1,517 Engine segment external sales by market were as follows: Three months ended March 31, In millions 2023 2022 Heavy-duty truck $ 860 $ 684 Medium-duty truck and bus 617 591 Light-duty automotive 441 487 Total on-highway 1,918 1,762 Off-highway 334 287 Total sales $ 2,252 $ 2,049 As previously announced, due to the indefinite suspension of operations in Russia, we reorganized the regional management structure of our Distribution segment and moved all Commonwealth of Independent States (CIS) sales into the Europe and Africa and Middle East regions. The Russian portion of prior period CIS sales moved to the Europe region. We started to report results for our new regional management structure in the first quarter of 2023 and reflected these changes for historical periods. Distribution segment external sales by region were as follows: Three months ended March 31, In millions 2023 2022 North America $ 1,693 $ 1,371 Asia Pacific 239 244 Europe 194 275 China 101 82 Africa and Middle East 62 50 India 57 48 Latin America 53 41 Total sales $ 2,399 $ 2,111 Distribution segment external sales by product line were as follows: Three months ended March 31, In millions 2023 2022 Parts $ 1,052 $ 926 Power generation 491 398 Engines 456 438 Service 400 349 Total sales $ 2,399 $ 2,111 Power Systems segment external sales by product line were as follows: Three months ended March 31, In millions 2023 2022 Power generation $ 380 $ 399 Industrial 189 188 Generator technologies 110 96 Total sales $ 679 $ 683

PENSION AND OTHER POSTRETIREMEN

PENSION AND OTHER POSTRETIREMENT BENEFITS	3 Months Ended
	Mar. 31, 2023
Retirement Benefits [Abstract]
PENSION AND OTHER POSTRETIREMENT BENEFITS	NOTE 3. PENSIONS AND OTHER POSTRETIREMENT BENEFITS We sponsor funded and unfunded domestic and foreign defined benefit pension and other postretirement benefit (OPEB) plans. Contributions to these plans were as follows: Three months ended March 31, In millions 2023 2022 Defined benefit pension contributions $ 88 $ 33 OPEB payments, net 4 10 Defined contribution pension plans 43 36 We anticipate making additional defined benefit pension contributions during the remainder of 2023 of $20 million for our U.S. and U.K. qualified and non-qualified pension plans. 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 2023 annual net periodic pension cost to be near zero. The components of net periodic pension and OPEB expense (income) under our plans were as follows: Pension U.S. Plans U.K. Plans OPEB Three months ended March 31, In millions 2023 2022 2023 2022 2023 2022 Service cost $ 29 $ 34 $ 4 $ 8 $ — $ — Interest cost 42 22 17 9 2 1 Expected return on plan assets (69) (52) (25) (20) — — Recognized net actuarial loss (gain) 2 6 — 1 (1) — Net periodic benefit expense (income) $ 4 $ 10 $ (4) $ (2) $ 1 $ 1

EQUITY, ROYALTY AND INTEREST IN

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES	3 Months Ended
	Mar. 31, 2023
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 Net Income for the reporting period was as follows: Three months ended March 31, In millions 2023 2022 Manufacturing entities Dongfeng Cummins Engine Company, Ltd. $ 19 $ 16 Beijing Foton Cummins Engine Co., Ltd. 16 14 Chongqing Cummins Engine Company, Ltd. 9 9 Tata Cummins, Ltd. 8 9 All other manufacturers 19 (10) (1) Distribution entities Komatsu Cummins Chile, Ltda. 14 7 All other distributors 3 2 Cummins share of net income 88 47 Royalty and interest income 31 49 Equity, royalty and interest income from investees $ 119 $ 96 (1) Includes a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the suspension of our Russian operations. See NOTE 15, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Tax Disclosure	NOTE 5. INCOME TAXES Our effective tax rates for the three months ended March 31, 2023 and 2022, were 21.7 percent and 26.8 percent, respectively. The three months ended March 31, 2023, contained favorable discrete tax items of $3 million, primarily due to share-based compensation tax benefits. The three months ended March 31, 2022, contained unfavorable discrete items of $31 million, primarily due to $18 million of unfavorable changes associated with the indefinite suspension of Russian operations, $9 million of net unfavorable changes in tax reserves and $4 million of net unfavorable other discrete tax items.

MARKETABLE SECURITIES

MARKETABLE SECURITIES	3 Months Ended
	Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]
MARKETABLE SECURITIES	NOTE 6. MARKETABLE SECURITIES A summary of marketable securities, all of which were classified as current, was as follows: March 31, December 31, In millions Cost Gross unrealized gains/(losses) (1) Estimated Cost Gross unrealized gains/(losses) (1) Estimated Equity securities Certificates of deposit $ 226 $ — $ 226 $ 209 $ — $ 209 Debt mutual funds 206 (4) 202 238 (5) 233 Equity mutual funds 31 (2) 29 25 3 28 Debt securities 1 1 2 2 — 2 Marketable securities $ 464 $ (5) $ 459 $ 474 $ (2) $ 472 (1) Unrealized gains and losses for debt securities are recorded in other comprehensive income while unrealized gains and losses for equity securities are recorded in our Condensed Consolidated Statements of Net Income . All debt securities are classified as available-for-sale. All marketable securities presented use a Level 2 fair value measure. 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 three months ended March 31, 2023, or the year ended December 31, 2022. A description of the valuation techniques and inputs used for our Level 2 fair value measures is as follows: • Certificates of deposit — 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 institution's month-end statement. • Debt mutual funds — The fair value measures for the vast majority of these investments are the daily net asset values 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 measure. • Equity mutual funds — The fair value measures for these investments are the net asset values 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. • Debt securities — The fair value measures for these securities are broker quotes received from reputable firms. These securities are infrequently traded on a national 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 were as follows: Three months ended March 31, In millions 2023 2022 Proceeds from sales of marketable securities $ 276 $ 195 Proceeds from maturities of marketable securities 69 59 Investments in marketable securities - liquidations $ 345 $ 254

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 7. INVENTORIES Inventories are stated at the lower of cost or net realizable value. Inventories included the following: In millions March 31, December 31, Finished products $ 3,089 $ 2,917 Work-in-process and raw materials 3,019 2,926 Inventories at FIFO cost 6,108 5,843 Excess of FIFO over LIFO (230) (240) Inventories $ 5,878 $ 5,603

SUPPLEMENTAL BALANCE SHEET DATA

SUPPLEMENTAL BALANCE SHEET DATA	3 Months Ended
	Mar. 31, 2023
Balance Sheet Related Disclosures [Abstract]
SUPPLEMENTAL BALANCE SHEET DATA	NOTE 8. SUPPLEMENTAL BALANCE SHEET DATA Other assets included the following: In millions March 31, December 31, Deferred income taxes $ 688 $ 625 Operating lease assets 489 492 Corporate owned life insurance 409 390 Other 528 633 Other assets $ 2,114 $ 2,140 Other accrued expenses included the following: In millions March 31, December 31, Income taxes payable $ 341 $ 173 Marketing accruals 339 316 Other taxes payable 226 224 Current portion of operating lease liabilities 133 132 Other 609 620 Other accrued expenses $ 1,648 $ 1,465 Other liabilities included the following: In millions March 31, December 31, Accrued product warranty $ 753 $ 744 Deferred income taxes 662 649 Pensions 442 445 Operating lease liabilities 364 368 Long-term income taxes 192 192 Accrued compensation 172 184 Other postretirement benefits 138 141 Mark-to-market valuation on interest rate derivatives 118 151 Other long-term liabilities 442 437 Other liabilities $ 3,283 $ 3,311

DEBT

DEBT	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
DEBT	NOTE 9. DEBT Loans Payable and Commercial Paper Loans payable, commercial paper and the related weighted-average interest rates were as follows: In millions March 31, December 31, Loans payable (1) $ 229 $ 210 Commercial paper (2) 2,545 2,574 (1) Loans payable consist primarily of notes payable to various domestic and international financial institutions. It is not practicable to aggregate these notes and calculate a quarterly weighted-average interest rate. (2) The weighted-average interest rate, inclusive of all brokerage fees, was 4.82 percent and 4.27 percent at March 31, 2023 and December 31, 2022, respectively. We can issue up to $4.0 billion of unsecured, short-term promissory notes (commercial paper) pursuant to the Board of Directors (the Board) authorized commercial paper programs. These programs facilitate the private placement of unsecured short-term debt through third-party brokers. We intend to use the net proceeds from the commercial paper borrowings for acquisitions and general corporate purposes. Revolving Credit Facilities We have access to committed credit facilities totaling $4.0 billion, including the $1.5 billion 364-day facility that expires August 16, 2023, $500 million incremental 364-day facility that expires August 16, 2023, and our $2.0 billion five-year facility that expires on August 18, 2026. We intend to maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities at or before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. There were no outstanding borrowings under these facilities at March 31, 2023 and December 31, 2022. At March 31, 2023, the $2.5 billion of outstanding commercial paper effectively reduced the $4.0 billion of revolving credit capacity to $1.5 billion. At March 31, 2023, we also had an additional $215 million available for borrowings under our international and other domestic credit facilities. Long-term Debt A summary of long-term debt was as follows: In millions Interest Rate March 31, December 31, Long-term debt Senior notes, due 2023 (1) 3.65% $ 500 $ 500 Term loan, due 2025 (2) Variable 1,450 1,550 Senior notes, due 2025 (3) 0.75% 500 500 Debentures, due 2027 6.75% 58 58 Debentures, due 2028 7.125% 250 250 Senior notes, due 2030 (3) 1.50% 850 850 Senior notes, due 2043 4.875% 500 500 Senior notes, due 2050 2.60% 650 650 Debentures, due 2098 (4) 5.65% 165 165 Other debt 109 121 Unamortized discount and deferred issuance costs (63) (64) Fair value adjustments due to hedge on indebtedness (102) (122) Finance leases 111 113 Total long-term debt 4,978 5,071 Less: Current maturities of long-term debt 569 573 Long-term debt $ 4,409 $ 4,498 (1) Senior notes, due 2023, are classified as current maturities of long-term debt. (2) During the first quarter of 2023, we paid down $100 million of the term loan. (3) In 2021, we entered into a series of interest rate swaps to effectively convert from a fixed rate to floating rate. See "Interest Rate Risk" in NOTE 14, "DERIVATIVES," to our Condensed Consolidated Financial Statements for additional information. (4) The effective interest rate is 7.48 percent. Principal payments required on long-term debt during the next five years are as follows: In millions 2023 2024 2025 2026 2027 Principal payments $ 559 $ 46 $ 1,962 $ 56 $ 65 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 values and carrying values of total debt, including current maturities, were as follows: In millions March 31, December 31, Fair value of total debt (1) $ 7,386 $ 7,400 Carrying value of total debt 7,752 7,855 (1) The fair value of debt is derived from Level 2 input measures. Filtration Contingent Debt Agreement On February 15, 2023, certain of our subsidiaries entered into an amendment to the $1.0 billion credit agreement (Credit Agreement), consisting of a $400 million revolving credit facility and a $600 million term loan facility (Facilities), in anticipation of the separation of our filtration business, which extended the date on which the Credit Agreement terminates from March 30, 2023 to June 30, 2023. Borrowings under the Credit Agreement will not become available under the Credit Agreement unless and until, among other things, there is a sale to the public of shares in our subsidiary that holds the filtration business (Parent Borrower). The Credit Agreement will automatically terminate if no such public sale of shares of Parent Borrower occurs on or prior to June 30, 2023. Borrowings under the Credit Agreement would be available to Parent Borrower and one or more of its subsidiaries (Borrower). If borrowings become available under the Credit Agreement, the Facilities would mature on September 30, 2027. Borrowings under the Credit Agreement would bear interest at varying rates, depending on the type of loan and, in some cases, the rates of designated benchmarks and the applicable Borrower’s election. Generally, U.S. dollar-denominated loans would bear interest at adjusted term Secured Overnight Financing Rate (SOFR) (which includes a 0.10 percent credit spread adjustment to term SOFR) for the applicable interest period plus a rate ranging from 1.125 percent to 1.75 percent depending on Parent Borrower's net leverage ratio.

PRODUCT WARRANTY LIABILITY

PRODUCT WARRANTY LIABILITY	3 Months Ended
	Mar. 31, 2023
Product Warranties Disclosures [Abstract]
PRODUCT WARRANTY LIABILITY	NOTE 10. PRODUCT WARRANTY LIABILITY A tabular reconciliation of the product warranty liability, including the deferred revenue related to our extended warranty coverage and accrued product campaigns, was as follows: Three months ended March 31, In millions 2023 2022 Balance, beginning of year $ 2,477 $ 2,425 Provision for base warranties issued 146 123 Deferred revenue on extended warranty contracts sold 102 70 Provision for product campaigns issued 6 42 Payments made during period (143) (132) Amortization of deferred revenue on extended warranty contracts (75) (73) Changes in estimates for pre-existing product warranties and campaigns 10 (26) Acquisition (1) — 95 Foreign currency translation adjustments and other 7 (1) Balance, end of period $ 2,530 $ 2,523 (1) See NOTE 16, "ACQUISITION," to our Condensed Consolidated Financial Statements for additional information. We recognized supplier recoveries of $10 million for the three months ended March 31, 2023, compared with $13 million for the comparable period in 2022. Warranty related deferred revenues and warranty liabilities on our Condensed Consolidated Balance Sheets were as follows: In millions March 31, December 31, Balance Sheet Location Deferred revenue related to extended coverage programs Current portion $ 289 $ 290 Current portion of deferred revenue Long-term portion 742 717 Deferred revenue Total $ 1,031 $ 1,007 Product warranty Current portion $ 746 $ 726 Current portion of accrued product warranty Long-term portion 753 744 Other liabilities Total $ 1,499 $ 1,470 Total warranty accrual $ 2,530 $ 2,477

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11. COMMITMENTS AND CONTINGENCIES Legal Proceedings 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; environmental matters; and asbestos claims. 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 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. On June 28, 2022, KAMAZ Publicly Traded Company (KAMAZ) was designated to the List of Specially Designated Nationals and Blocked Persons by the U.S. Department of the Treasury’s Office of Foreign Assets Control. We filed blocked property reports for relevant assets and are seeking relevant authorizations to extricate ourselves from our relationship with KAMAZ and its subsidiaries, including our unconsolidated joint venture with KAMAZ, in compliance with U.S. law. On April 29, 2019, we announced that we were conducting a formal internal review of our emissions certification process and compliance with emission standards for our pick-up truck applications, following conversations with the Environmental Protection Agency (EPA) and California Air Resources Board (CARB) regarding certification of our engines in model year 2019 RAM 2500 and 3500 trucks. This review is being conducted with external advisors as we strive to ensure the certification and compliance processes for all of our pick-up truck applications are consistent with our internal policies, engineering standards and applicable laws. During conversations with the EPA and CARB about the effectiveness of our pick-up truck applications, the regulators raised concerns that certain aspects of our emissions systems may reduce the effectiveness of our emissions control systems and thereby act as defeat devices. As a result, our internal review focuses, in part, on the regulators’ concerns. We are working closely with the regulators to enhance our emissions systems to improve the effectiveness of all of our pick-up truck applications and to fully address the regulators’ requirements. Based on discussions with the regulators, we have developed a new calibration for the engines in model year 2019 RAM 2500 and 3500 trucks that has been included in all engines shipped since September 2019. During our ongoing discussions, the regulators turned their attention to other model years and other engines, most notably our pick-up truck applications for RAM 2500 and 3500 trucks for model years 2013 through 2018 and Titan trucks for model years 2016 through 2019. Most recently, the regulators have also raised concerns regarding the completeness of our disclosures in our certification applications for RAM 2500 and 3500 trucks for model years 2013 through 2023. We have also been in communication with Environmental and Climate Change Canada regarding similar issues relating to some of these very same platforms. In connection with these and other ongoing discussions with the EPA and CARB, we are developing a new software calibration and will recall model years 2013 through 2018 RAM 2500 and 3500 trucks. We accrued $30 million for the RAM recall during the first quarter of 2022, an amount that reflected our current estimate of the cost of that recall. We are also developing a new software calibration and hardware fix and will recall model years 2016 through 2019 Titan trucks. We accrued $29 million for the Titan recall during the third quarter of 2022, an amount that reflected our current estimate of the cost of that recall. We will continue to work together closely with the relevant regulators to develop and implement recommendations for improvements and seek to reach further resolutions as part of our ongoing commitment to compliance. Based upon our discussions to date with the regulators which are continuing, such resolutions may involve our agreeing to one or more consent decrees and paying civil penalties. Due to the presence of many unknown facts and circumstances, we are not yet able to estimate any further financial impact of these matters. The consequences resulting from our formal review and these regulatory processes likely will have a material adverse impact on our results of operations and cash flows, however we cannot yet reasonably estimate a loss or range of loss. 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 March 31, 2023, the maximum potential loss related to these guarantees was $42 million. We have arrangements with certain suppliers that require us to purchase minimum volumes or be subject to monetary penalties. At March 31, 2023, if we were to stop purchasing from each of these suppliers, the aggregate amount of the penalty would be approximately $161 million. These arrangements enable us to secure supplies of critical components and IT services. We do not currently anticipate paying any penalties under these contracts. We enter into physical forward contracts with suppliers of platinum and palladium to purchase certain volumes of the commodities at contractually stated prices for various periods, which generally fall within two years. At March 31, 2023, the total commitments under these contracts were $38 million. These arrangements enable us to guarantee 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 $126 million at March 31, 2023. 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.

REDEEMABLE NONCONTROLLING INTER

REDEEMABLE NONCONTROLLING INTERESTS	3 Months Ended
	Mar. 31, 2023
Noncontrolling Interest [Abstract]
Noncontrolling Interest Disclosure	NOTE 12. REDEEMABLE NONCONTROLLING INTERESTS A 19 percent minority shareholder in one of our businesses, Hydrogenics Corporation (Hydrogenics), has, among other rights and subject to related obligations and restrictive covenants, rights that are exercisable between September 2022 and September 2026 to require us to (1) purchase such shareholder's shares (put option) at an amount up to the fair market value (calculated pursuant to a process outlined in the shareholders' agreement) and (2) sell to such shareholder Hydrogenics' electrolyzer business at an amount up to the fair market value of the electrolyzer business (calculated pursuant to a process outlined in the shareholders’ agreement). We recorded the estimated fair value of the put option as redeemable noncontrolling interests in our Condensed Consolidated Financial Statements with an offset to additional paid-in capital. The redeemable noncontrolling interest balance was $261 million and $258 million at March 31, 2023 and December 31, 2022, respectively.

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	NOTE 13. ACCUMULATED OTHER COMPREHENSIVE LOSS Following are the changes in accumulated other comprehensive income (loss) by component for the three months ended: In millions Change in pensions Foreign currency Unrealized gain Total Noncontrolling Total Balance at December 31, 2022 $ (427) $ (1,552) $ 89 $ (1,890) Other comprehensive income (loss) before reclassifications Before-tax amount (13) 75 (3) 59 $ 3 $ 62 Tax benefit 2 4 1 7 — 7 After-tax amount (11) 79 (2) 66 3 69 Amounts reclassified from accumulated other comprehensive income (loss) (1) 2 — (1) 1 — 1 Net current period other comprehensive (loss) income (9) 79 (3) 67 $ 3 $ 70 Balance at March 31, 2023 $ (436) $ (1,473) $ 86 $ (1,823) Balance at December 31, 2021 $ (346) $ (1,208) $ (17) $ (1,571) Other comprehensive income (loss) before reclassifications Before-tax amount 14 11 36 61 $ (8) $ 53 Tax (expense) benefit (4) 1 (7) (10) — (10) After-tax amount 10 12 29 51 (8) 43 Amounts reclassified from accumulated other comprehensive income (loss) (1) 6 — (1) 5 — 5 Net current period other comprehensive income (loss) 16 12 28 56 $ (8) $ 48 Balance at March 31, 2022 $ (330) $ (1,196) $ 11 $ (1,515) (1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.

DERIVATIVES

DERIVATIVES	3 Months Ended
	Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities Disclosure	NOTE 14. DERIVATIVES We are exposed to financial risk resulting from volatility in foreign exchange rates, interest rates and commodity prices. This risk is closely monitored and managed through the use of physical forward contracts (which are not considered derivatives), and financial derivative instruments including foreign currency forward contracts, commodity swap contracts and interest rate swaps and locks. Financial derivatives are used expressly for hedging purposes and under no circumstances are they used for speculative purposes. When material, we adjust the estimated fair value of our derivative contracts for counterparty or our credit risk. None of our derivative instruments are subject to collateral requirements. Substantially all of our derivative contracts are subject to master netting arrangements, which provide us with the option to settle certain contracts on a net basis when they settle on the same day with the same currency. In addition, these arrangements provide for a net settlement of all contracts with a given counterparty in the event that the arrangement is terminated due to the occurrence of default or a termination event. Foreign Currency Exchange Rate Risk We had foreign currency forward contracts with notional amounts of $4.4 billion and $3.6 billion at March 31, 2023 and December 31, 2022, respectively. The following currencies comprise 86 percent and 88 percent of outstanding foreign currency forward contracts at March 31, 2023 and December 31, 2022, respectively: British pound, Chinese renminbi, Euro, Canadian dollar and Australian dollar. We are further exposed to foreign currency exchange risk as many of our subsidiaries are subject to fluctuations as the functional currencies of the underlying entities are not our U.S. dollar reporting currency. To help minimize movements for certain investments, in the third quarter of 2022 we began entering into foreign exchange forwards designated as net investment hedges for certain of our investments. Under the current terms of our foreign exchange forwards, we agreed with third parties to sell British pound in exchange for U.S. dollar currency at a specified rate at the maturity of the contract. The notional amount of these hedges at March 31, 2023, was $724 million. The following table summarizes the net investment hedge activity in AOCL: Three months ended March 31, In millions 2023 Type of Derivative Gain (Loss) Gain (Loss) Reclassified from AOCL into Earnings Foreign exchange forwards $ (15) $ — Interest Rate Risk In 2021, we entered into a series of interest rate swaps to effectively convert our $500 million senior notes, due in 2025, from a fixed rate of 0.75 percent to a floating rate equal to the three-month LIBOR plus a spread. We also entered into a series of interest rate swaps to effectively convert $765 million of our $850 million senior notes, due in 2030, from a fixed rate of 1.50 percent to a floating rate equal to the three-month LIBOR plus a spread. We designated the swaps as fair value hedges. The gain or loss on these derivative instruments, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current income as interest expense. The net swap settlements that accrue each period are also reported in the Condensed Consolidated Financial Statements as interest expense. In March 2023, we settled a portion of our 2021 interest rate swaps with a notional amount of $100 million. The $7 million loss on settlement will be amortized over the remaining term of the related debt. The following table summarizes the gains and losses: Three months ended March 31, In millions 2023 2022 Type of Swap Gain (Loss) Gain (Loss) on Borrowings Gain (Loss) Gain (Loss) on Borrowings Interest rate swaps (1) $ 27 $ (22) $ (72) $ 80 (1) The difference between the gain (loss) on swaps and borrowings represents hedge ineffectiveness. In 2019, we entered into $350 million of interest rate lock agreements, and in 2020 we entered into an additional $150 million of lock agreements to reduce the variability of the cash flows of the interest payments on a total of $500 million of fixed rate debt forecast to be issued in 2023 to replace our senior notes at maturity. The terms of the rate locks mirror the time period of the expected fixed rate debt issuance and the expected timing of interest payments on that debt. The gains and losses on these derivative instruments are initially recorded in other comprehensive income and will be released to earnings in interest expense in future periods to reflect the difference in (1) the fixed rates economically locked in at the inception of the hedge and (2) the actual fixed rates established in the debt instrument at issuance. In December 2022, we settled certain rate lock agreements with notional amounts totaling $150 million for $49 million. In February 2023, we settled certain rate lock agreements with notional amounts totaling $100 million for $34 million. The $83 million of gains on settlements will remain in other comprehensive income and will be amortized over the term of the anticipated new debt as discussed above. The following table summarizes the interest rate lock activity in AOCL: Three months ended March 31, In millions 2023 2022 Type of Swap Gain (Loss) Gain (Loss) Reclassified from AOCL into Interest Expense Gain (Loss) Gain (Loss) Reclassified from AOCL into Interest Expense Interest rate locks $ (9) $ — $ 39 $ — Cash Flow Hedging The following table summarizes the effect on our Condensed Consolidated Statements of Net Income for derivative instruments classified as cash flow hedges. The table does not include amounts related to ineffectiveness as it was not material for the periods presented. Three months ended March 31, In millions 2023 2022 Gain reclassified from AOCL into income - Net sales (1) $ 1 $ 3 Loss reclassified from AOCL into income - Cost of sales (1)(2) — (2) (1) Includes foreign currency forward contracts. (2) Includes commodity swap contracts. Derivatives Not Designated as Hedging Instruments The following table summarizes the effect on our Condensed Consolidated Statements of Net Income for derivative instruments not classified as cash flow hedges: Three months ended March 31, In millions 2023 2022 Loss recognized in income - Cost of sales (1) $ (2) $ (1) Gain recognized in income - Other income (expense), net (1) 27 8 (1) Includes foreign currency forward contracts. Fair Value Amount and Location of Derivative Instruments The following table summarizes the location and fair value of derivative instruments on our Condensed Consolidated Balance Sheets : Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments In millions March 31, December 31, March 31, December 31, Notional amount $ 2,898 $ 3,051 $ 3,688 $ 2,900 Derivative assets Prepaid expenses and other current assets $ 16 $ 18 $ 7 $ 27 Other assets 35 80 — — Total derivative assets (1) $ 51 $ 98 $ 7 $ 27 Derivative liabilities Other accrued expenses $ 22 $ 19 $ 2 $ 3 Other liabilities 118 151 — — Total derivative liabilities (1) $ 140 $ 170 $ 2 $ 3 (1) Estimates of the fair value of all derivative assets and liabilities above are derived from Level 2 inputs, which are 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 input measures and there were no transfers into or out of Level 2 or 3 during the three months ended March 31, 2023, or the year ended December 31, 2022. We elected to present our derivative contracts on a gross basis in our Condensed Consolidated Balance Sheets . Had we chosen to present on a net basis, we would have derivatives in a net asset position of $29 million and $52 million and derivatives in a net liability position of $113 million and $100 million at March 31, 2023 and December 31, 2022, respectively.

RUSSIAN OPERATIONS

RUSSIAN OPERATIONS	3 Months Ended
	Mar. 31, 2023
Restructuring and Related Activities [Abstract]
Restructuring, Impairment, and Other Activities Disclosure	NOTE 15. RUSSIAN OPERATIONS On March 17, 2022, the Board indefinitely suspended our operations in Russia due to the ongoing conflict in Ukraine. At the time of suspension, our Russian operations included a wholly-owned distributor in Russia, an unconsolidated joint venture with KAMAZ (a Russian truck manufacturer) and direct sales into Russia from our other business segments. As a result of the suspension of operations, we evaluated the recoverability of assets in Russia and assessed other potential liabilities. We experienced and expect to continue to experience an inability to collect customer receivables and may be the subject of litigation as a consequence of our suspension of commercial operations in Russia. The following summarizes the costs associated with the suspension of our Russian operations in our Condensed Consolidated Statements of Net Income: Three months ended In millions March 31, Statement of Net Income Location Inventory write-downs $ 59 Cost of sales Accounts receivable reserves 43 Other operating expense, net Impairment and other joint venture costs 31 Equity, royalty and interest income from investees Other 25 Other operating expense, net Total $ 158

ACQUISITIONS

ACQUISITIONS	3 Months Ended
	Mar. 31, 2023
Business Combinations [Abstract]
Mergers, Acquisitions and Dispositions Disclosures	NOTE 16. ACQUISITION On February 7, 2022, we purchased Westport Fuel System Inc.'s stake in Cummins Westport, Inc. We will continue to operate the business as the sole owner. The purchase price was $42 million and was allocated primarily to cash, warranty and deferred revenue related to extended coverage contracts. The results of the business were reported in our Engine segment. Pro forma financial information for the acquisition was not presented as the effects are not material to our Condensed Consolidated Financial Statements.

OPERATING SEGMENTS

OPERATING SEGMENTS	3 Months Ended
	Mar. 31, 2023
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 17. 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 Executive Officer. Our reportable operating segments consist of Components, Engine, Distribution, Power Systems and Accelera. This reporting structure is organized according to the products and markets each segment serves. The Components segment sells filtration products, aftertreatment systems, turbochargers, electronics, fuel systems, automated transmissions, axles, drivelines, brakes and suspension systems. The Engine segment produces engines (15 liters and smaller) 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 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. The Accelera segment designs, manufactures, sells and supports hydrogen production solutions as well as electrified power systems with innovative components and subsystems, including battery, fuel cell and electric powertrain technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of our electrolyzers for hydrogen production and electrified power systems and related components and subsystems. We continue to serve all our markets as they adopt electrification and alternative power technologies, meeting the needs of our OEM partners and end customers. We use segment earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests (EBITDA) as the primary basis for the CODM to evaluate the performance of each of our reportable operating segments. We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. 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 gains or losses of corporate owned life insurance and certain filtration separation costs to individual segments. EBITDA may not be consistent with measures used by other companies. Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below: In millions Components Engine Distribution Power Systems Accelera Total Segments Three months ended March 31, 2023 External sales $ 3,043 $ 2,252 $ 2,399 $ 679 $ 80 $ 8,453 Intersegment sales 514 734 7 664 5 1,924 Total sales 3,557 2,986 2,406 1,343 85 10,377 Research, development and engineering expenses 91 134 14 63 48 350 Equity, royalty and interest income (loss) from investees 21 65 24 13 (4) 119 Interest income 6 3 7 2 — 18 Segment EBITDA 507 (1) 457 335 219 (94) 1,424 Depreciation and amortization (2) 123 51 28 29 14 245 Three months ended March 31, 2022 External sales $ 1,517 $ 2,049 $ 2,111 $ 683 $ 25 $ 6,385 Intersegment sales 471 704 6 477 6 1,664 Total sales 1,988 2,753 2,117 1,160 31 8,049 Research, development and engineering expenses 76 109 13 64 36 298 Equity, royalty and interest income (loss) from investees 28 42 (3) 16 11 (1) 96 Interest income 1 4 2 1 — 8 Russian suspension costs (4) 6 32 (5) 100 20 — 158 Segment EBITDA 320 390 110 90 (65) 845 Depreciation and amortization (2) 43 51 28 31 7 160 (1) Includes $12 million of costs associated with the planned separation of our filtration business. (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 Net Income as interest expense. The amortization of debt discount and deferred costs was $1 million and $1 million for the three months ended March 31, 2023 and March 31, 2022, respectively. A portion of depreciation expense is included in research, development and engineering expenses. (3) Includes a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the suspension of our Russian operations. See NOTE 15, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information. (4) See NOTE 15, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information. (5) Includes $31 million of Russian suspension costs reflected in the equity, royalty and interest income (loss) from investees line above. A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Net Income is shown in the table below: Three months ended March 31, In millions 2023 2022 TOTAL SEGMENT EBITDA $ 1,424 $ 845 Intersegment eliminations and other (1) (63) (90) Less: Interest expense 87 17 Depreciation and amortization 245 160 INCOME BEFORE INCOME TAXES $ 1,029 $ 578 (1) Intersegment eliminations and other included $6 million and $17 million of costs associated with the planned separation of our filtration business for the three months ended March 31, 2023 and 2022.

RECENTLY ADOPTED AND RECENTLY I

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	NOTE 18. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In September 2022, the Financial Accounting Standards Board issued a standard related to the disclosure of additional information about the use of supplier finance programs. Under the new standard, entities are required to disclose (1) key terms of the programs, (2) the amount outstanding that remains unpaid as of the end of the period, including where amounts are recorded in the balance sheets and (3) an annual rollforward of those obligations, including the amount of obligations confirmed and the amount of obligations subsequently paid. We adopted the new standard on January 1, 2023, on a retrospective basis other than the rollforward, which we currently plan to early adopt on a prospective basis beginning with our 2023 annual financial statements. The adoption did not have a material impact on our financial statements. See "Supply Chain Financing" section in NOTE 1, "NATURE OF OPERATIONS AND BASIS OF PRESENTATION," for additional information.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	NOTE 19. SUBSEQUENT EVENT On April 3, 2023, we purchased all of the equity ownership interest of Teksid Hierro de Mexico, S.A. de C.V. (Teksid MX) and Teksid, Inc. from Stellantis N.V. for approximately €138 million, subject to certain adjustments set forth in the agreement. Teksid MX operates a cast iron foundry located in Monclova, Mexico, which primarily forges blocks and heads used in our and other manufacturers’ engines. Teksid, Inc. facilitates the commercialization of Teksid MX products in North America. Since we are the primary customer of the foundry, the acquisition is not expected to result in material incremental sales to our business. The acquisition will be included in our Engine segment starting in the second quarter of 2023. Due to the timing of the acquisition, the initial purchase accounting is not yet complete and will follow in the second quarter Form 10-Q filing.

NATURE OF OPERATIONS AND BASI_2

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Tables)	3 Months Ended
	Mar. 31, 2023
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 March 31, 2023 2022 Options excluded 4,833 20,463
Schedule of Related Party Transactions	The following is a summary of sales to and purchases from nonconsolidated equity investees: Three months ended March 31, In millions 2023 2022 Sales to nonconsolidated equity investees $ 376 $ 344 Purchases from nonconsolidated equity investees 704 427 The following is a summary of accounts receivable from and accounts payable to nonconsolidated equity investees: In millions March 31, December 31, Balance Sheet Location Accounts receivable from nonconsolidated equity investees $ 469 $ 376 Accounts and notes receivable, net Accounts payable to nonconsolidated equity investees 370 292 Accounts payable (principally trade)

REVENUE RECOGNITION LONGTERM CO

REVENUE RECOGNITION LONGTERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE (Tables)	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Contract with Customer, Contract Asset, Contract Liability, and Receivable	The following is a summary of our unbilled and deferred revenue and related activity: In millions March 31, December 31, Unbilled revenue $ 332 $ 257 Deferred revenue 1,977 1,848

REVENUE RECOGNITION DISAGGREG_2

REVENUE RECOGNITION DISAGGREGATION OF REVENUES (Tables)	3 Months Ended
	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Revenue from External Customers by Geographic Areas	The table below presents our consolidated sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer. Three months ended March 31, In millions 2023 2022 United States $ 4,802 $ 3,457 China 790 653 India 411 309 Other international 2,450 1,966 Total net sales $ 8,453 $ 6,385
Components
Disaggregation of Revenue [Line Items]
Revenue from External Customers by Products and Services	Components segment external sales by business were as follows: Three months ended March 31, In millions 2023 2022 Axles and brakes $ 1,272 $ — Emission solutions 939 808 Filtration 342 308 Engine components 292 240 Automated transmissions 178 134 Software and electronics 20 27 Total sales $ 3,043 $ 1,517
Engine
Disaggregation of Revenue [Line Items]
Revenue from External Customers by Market	Engine segment external sales by market were as follows: Three months ended March 31, In millions 2023 2022 Heavy-duty truck $ 860 $ 684 Medium-duty truck and bus 617 591 Light-duty automotive 441 487 Total on-highway 1,918 1,762 Off-highway 334 287 Total sales $ 2,252 $ 2,049
Distribution
Disaggregation of Revenue [Line Items]
Revenue from External Customers by Geographic Areas	Distribution segment external sales by region were as follows: Three months ended March 31, In millions 2023 2022 North America $ 1,693 $ 1,371 Asia Pacific 239 244 Europe 194 275 China 101 82 Africa and Middle East 62 50 India 57 48 Latin America 53 41 Total sales $ 2,399 $ 2,111
Revenue from External Customers by Products and Services	Distribution segment external sales by product line were as follows: Three months ended March 31, In millions 2023 2022 Parts $ 1,052 $ 926 Power generation 491 398 Engines 456 438 Service 400 349 Total sales $ 2,399 $ 2,111
Power Systems
Disaggregation of Revenue [Line Items]
Revenue from External Customers by Products and Services	Power Systems segment external sales by product line were as follows: Three months ended March 31, In millions 2023 2022 Power generation $ 380 $ 399 Industrial 189 188 Generator technologies 110 96 Total sales $ 679 $ 683

PENSION AND OTHER POSTRETIREM_2

PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)	3 Months Ended
	Mar. 31, 2023
Retirement Benefits [Abstract]
Schedule Benefit Plans Disclosures Cash Contributions	Contributions to these plans were as follows: Three months ended March 31, In millions 2023 2022 Defined benefit pension contributions $ 88 $ 33 OPEB payments, net 4 10 Defined contribution pension plans 43 36
Components of net periodic pension and other postretirement benefit cost	The components of net periodic pension and OPEB expense (income) under our plans were as follows: Pension U.S. Plans U.K. Plans OPEB Three months ended March 31, In millions 2023 2022 2023 2022 2023 2022 Service cost $ 29 $ 34 $ 4 $ 8 $ — $ — Interest cost 42 22 17 9 2 1 Expected return on plan assets (69) (52) (25) (20) — — Recognized net actuarial loss (gain) 2 6 — 1 (1) — Net periodic benefit expense (income) $ 4 $ 10 $ (4) $ (2) $ 1 $ 1

EQUITY, ROYALTY AND INTEREST _2

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES (Tables)	3 Months Ended
	Mar. 31, 2023
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 Net Income for the reporting period was as follows: Three months ended March 31, In millions 2023 2022 Manufacturing entities Dongfeng Cummins Engine Company, Ltd. $ 19 $ 16 Beijing Foton Cummins Engine Co., Ltd. 16 14 Chongqing Cummins Engine Company, Ltd. 9 9 Tata Cummins, Ltd. 8 9 All other manufacturers 19 (10) (1) Distribution entities Komatsu Cummins Chile, Ltda. 14 7 All other distributors 3 2 Cummins share of net income 88 47 Royalty and interest income 31 49 Equity, royalty and interest income from investees $ 119 $ 96 (1) Includes a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the suspension of our Russian operations. See NOTE 15, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information.

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)	3 Months Ended
	Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Summary of marketable securities	A summary of marketable securities, all of which were classified as current, was as follows: March 31, December 31, In millions Cost Gross unrealized gains/(losses) (1) Estimated Cost Gross unrealized gains/(losses) (1) Estimated Equity securities Certificates of deposit $ 226 $ — $ 226 $ 209 $ — $ 209 Debt mutual funds 206 (4) 202 238 (5) 233 Equity mutual funds 31 (2) 29 25 3 28 Debt securities 1 1 2 2 — 2 Marketable securities $ 464 $ (5) $ 459 $ 474 $ (2) $ 472 (1) Unrealized gains and losses for debt securities are recorded in other comprehensive income while unrealized gains and losses for equity securities are recorded in our Condensed Consolidated Statements of Net Income .
Schedule of proceeds from sales and maturities	The proceeds from sales and maturities of marketable securities were as follows: Three months ended March 31, In millions 2023 2022 Proceeds from sales of marketable securities $ 276 $ 195 Proceeds from maturities of marketable securities 69 59 Investments in marketable securities - liquidations $ 345 $ 254

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories included the following: In millions March 31, December 31, Finished products $ 3,089 $ 2,917 Work-in-process and raw materials 3,019 2,926 Inventories at FIFO cost 6,108 5,843 Excess of FIFO over LIFO (230) (240) Inventories $ 5,878 $ 5,603

SUPPLEMENTAL BALANCE SHEET DA_2

SUPPLEMENTAL BALANCE SHEET DATA (Tables)	3 Months Ended
	Mar. 31, 2023
Balance Sheet Related Disclosures [Abstract]
Schedule of Other Assets	Other assets included the following: In millions March 31, December 31, Deferred income taxes $ 688 $ 625 Operating lease assets 489 492 Corporate owned life insurance 409 390 Other 528 633 Other assets $ 2,114 $ 2,140
Accrued Expenses	Other accrued expenses included the following: In millions March 31, December 31, Income taxes payable $ 341 $ 173 Marketing accruals 339 316 Other taxes payable 226 224 Current portion of operating lease liabilities 133 132 Other 609 620 Other accrued expenses $ 1,648 $ 1,465
Other Noncurrent Liabilities	Other liabilities included the following: In millions March 31, December 31, Accrued product warranty $ 753 $ 744 Deferred income taxes 662 649 Pensions 442 445 Operating lease liabilities 364 368 Long-term income taxes 192 192 Accrued compensation 172 184 Other postretirement benefits 138 141 Mark-to-market valuation on interest rate derivatives 118 151 Other long-term liabilities 442 437 Other liabilities $ 3,283 $ 3,311

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 31, 2023
Debt Disclosure [Abstract]
Schedule of Short-term Debt	Loans payable, commercial paper and the related weighted-average interest rates were as follows: In millions March 31, December 31, Loans payable (1) $ 229 $ 210 Commercial paper (2) 2,545 2,574 (1) Loans payable consist primarily of notes payable to various domestic and international financial institutions. It is not practicable to aggregate these notes and calculate a quarterly weighted-average interest rate. (2) The weighted-average interest rate, inclusive of all brokerage fees, was 4.82 percent and 4.27 percent at March 31, 2023 and December 31, 2022, respectively.
Summary of long-term debt	A summary of long-term debt was as follows: In millions Interest Rate March 31, December 31, Long-term debt Senior notes, due 2023 (1) 3.65% $ 500 $ 500 Term loan, due 2025 (2) Variable 1,450 1,550 Senior notes, due 2025 (3) 0.75% 500 500 Debentures, due 2027 6.75% 58 58 Debentures, due 2028 7.125% 250 250 Senior notes, due 2030 (3) 1.50% 850 850 Senior notes, due 2043 4.875% 500 500 Senior notes, due 2050 2.60% 650 650 Debentures, due 2098 (4) 5.65% 165 165 Other debt 109 121 Unamortized discount and deferred issuance costs (63) (64) Fair value adjustments due to hedge on indebtedness (102) (122) Finance leases 111 113 Total long-term debt 4,978 5,071 Less: Current maturities of long-term debt 569 573 Long-term debt $ 4,409 $ 4,498 (1) Senior notes, due 2023, are classified as current maturities of long-term debt. (2) During the first quarter of 2023, we paid down $100 million of the term loan. (3) In 2021, we entered into a series of interest rate swaps to effectively convert from a fixed rate to floating rate. See "Interest Rate Risk" in NOTE 14, "DERIVATIVES," to our Condensed Consolidated Financial Statements for additional information. (4) The effective interest rate is 7.48 percent.
Principal repayments on long-term debt	Principal payments required on long-term debt during the next five years are as follows: In millions 2023 2024 2025 2026 2027 Principal payments $ 559 $ 46 $ 1,962 $ 56 $ 65
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 values and carrying values of total debt, including current maturities, were as follows: In millions March 31, December 31, Fair value of total debt (1) $ 7,386 $ 7,400 Carrying value of total debt 7,752 7,855 (1) The fair value of debt is derived from Level 2 input measures.

PRODUCT WARRANTY LIABILITY (Tab

PRODUCT WARRANTY LIABILITY (Tables)	3 Months Ended
	Mar. 31, 2023
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 product campaigns, was as follows: Three months ended March 31, In millions 2023 2022 Balance, beginning of year $ 2,477 $ 2,425 Provision for base warranties issued 146 123 Deferred revenue on extended warranty contracts sold 102 70 Provision for product campaigns issued 6 42 Payments made during period (143) (132) Amortization of deferred revenue on extended warranty contracts (75) (73) Changes in estimates for pre-existing product warranties and campaigns 10 (26) Acquisition (1) — 95 Foreign currency translation adjustments and other 7 (1) Balance, end of period $ 2,530 $ 2,523 (1) See NOTE 16, "ACQUISITION," to our Condensed Consolidated Financial Statements for additional information.
Warranty related deferred revenue and the long-term portion of the warranty liability	Warranty related deferred revenues and warranty liabilities on our Condensed Consolidated Balance Sheets were as follows: In millions March 31, December 31, Balance Sheet Location Deferred revenue related to extended coverage programs Current portion $ 289 $ 290 Current portion of deferred revenue Long-term portion 742 717 Deferred revenue Total $ 1,031 $ 1,007 Product warranty Current portion $ 746 $ 726 Current portion of accrued product warranty Long-term portion 753 744 Other liabilities Total $ 1,499 $ 1,470 Total warranty accrual $ 2,530 $ 2,477

ACCUMULATED OTHER COMPREHENSI_2

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
Changes in accumulated other comprehensive loss by component	Following are the changes in accumulated other comprehensive income (loss) by component for the three months ended: In millions Change in pensions Foreign currency Unrealized gain Total Noncontrolling Total Balance at December 31, 2022 $ (427) $ (1,552) $ 89 $ (1,890) Other comprehensive income (loss) before reclassifications Before-tax amount (13) 75 (3) 59 $ 3 $ 62 Tax benefit 2 4 1 7 — 7 After-tax amount (11) 79 (2) 66 3 69 Amounts reclassified from accumulated other comprehensive income (loss) (1) 2 — (1) 1 — 1 Net current period other comprehensive (loss) income (9) 79 (3) 67 $ 3 $ 70 Balance at March 31, 2023 $ (436) $ (1,473) $ 86 $ (1,823) Balance at December 31, 2021 $ (346) $ (1,208) $ (17) $ (1,571) Other comprehensive income (loss) before reclassifications Before-tax amount 14 11 36 61 $ (8) $ 53 Tax (expense) benefit (4) 1 (7) (10) — (10) After-tax amount 10 12 29 51 (8) 43 Amounts reclassified from accumulated other comprehensive income (loss) (1) 6 — (1) 5 — 5 Net current period other comprehensive income (loss) 16 12 28 56 $ (8) $ 48 Balance at March 31, 2022 $ (330) $ (1,196) $ 11 $ (1,515) (1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.

DERIVATIVES (Tables)

DERIVATIVES (Tables)	3 Months Ended
	Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)	The following table summarizes the net investment hedge activity in AOCL: Three months ended March 31, In millions 2023 Type of Derivative Gain (Loss) Gain (Loss) Reclassified from AOCL into Earnings Foreign exchange forwards $ (15) $ — The following table summarizes the interest rate lock activity in AOCL: Three months ended March 31, In millions 2023 2022 Type of Swap Gain (Loss) Gain (Loss) Reclassified from AOCL into Interest Expense Gain (Loss) Gain (Loss) Reclassified from AOCL into Interest Expense Interest rate locks $ (9) $ — $ 39 $ —
Schedule of Interest Rate Derivatives	The following table summarizes the gains and losses: Three months ended March 31, In millions 2023 2022 Type of Swap Gain (Loss) Gain (Loss) on Borrowings Gain (Loss) Gain (Loss) on Borrowings Interest rate swaps (1) $ 27 $ (22) $ (72) $ 80 (1) The difference between the gain (loss) on swaps and borrowings represents hedge ineffectiveness.
Derivative Instruments, Gain (Loss)	The following table summarizes the effect on our Condensed Consolidated Statements of Net Income for derivative instruments classified as cash flow hedges. The table does not include amounts related to ineffectiveness as it was not material for the periods presented. Three months ended March 31, In millions 2023 2022 Gain reclassified from AOCL into income - Net sales (1) $ 1 $ 3 Loss reclassified from AOCL into income - Cost of sales (1)(2) — (2) (1) Includes foreign currency forward contracts. (2) Includes commodity swap contracts.
Derivatives Not Designated as Hedging Instruments	The following table summarizes the effect on our Condensed Consolidated Statements of Net Income for derivative instruments not classified as cash flow hedges: Three months ended March 31, In millions 2023 2022 Loss recognized in income - Cost of sales (1) $ (2) $ (1) Gain recognized in income - Other income (expense), net (1) 27 8 (1) Includes foreign currency forward contracts.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value	The following table summarizes the location and fair value of derivative instruments on our Condensed Consolidated Balance Sheets : Derivatives Designated as Hedging Instruments Derivatives Not Designated as Hedging Instruments In millions March 31, December 31, March 31, December 31, Notional amount $ 2,898 $ 3,051 $ 3,688 $ 2,900 Derivative assets Prepaid expenses and other current assets $ 16 $ 18 $ 7 $ 27 Other assets 35 80 — — Total derivative assets (1) $ 51 $ 98 $ 7 $ 27 Derivative liabilities Other accrued expenses $ 22 $ 19 $ 2 $ 3 Other liabilities 118 151 — — Total derivative liabilities (1) $ 140 $ 170 $ 2 $ 3 (1) Estimates of the fair value of all derivative assets and liabilities above are derived from Level 2 inputs, which are 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 input measures and there were no transfers into or out of Level 2 or 3 during the three months ended March 31, 2023, or the year ended December 31, 2022.

RUSSIAN OPERATIONS (Tables)

RUSSIAN OPERATIONS (Tables)	3 Months Ended
	Mar. 31, 2023
Restructuring and Related Activities [Abstract]
Restructuring and Related Costs	The following summarizes the costs associated with the suspension of our Russian operations in our Condensed Consolidated Statements of Net Income: Three months ended In millions March 31, Statement of Net Income Location Inventory write-downs $ 59 Cost of sales Accounts receivable reserves 43 Other operating expense, net Impairment and other joint venture costs 31 Equity, royalty and interest income from investees Other 25 Other operating expense, net Total $ 158

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)	3 Months Ended
	Mar. 31, 2023
Segment Reporting [Abstract]
Financial information regarding reportable operating segments	Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below: In millions Components Engine Distribution Power Systems Accelera Total Segments Three months ended March 31, 2023 External sales $ 3,043 $ 2,252 $ 2,399 $ 679 $ 80 $ 8,453 Intersegment sales 514 734 7 664 5 1,924 Total sales 3,557 2,986 2,406 1,343 85 10,377 Research, development and engineering expenses 91 134 14 63 48 350 Equity, royalty and interest income (loss) from investees 21 65 24 13 (4) 119 Interest income 6 3 7 2 — 18 Segment EBITDA 507 (1) 457 335 219 (94) 1,424 Depreciation and amortization (2) 123 51 28 29 14 245 Three months ended March 31, 2022 External sales $ 1,517 $ 2,049 $ 2,111 $ 683 $ 25 $ 6,385 Intersegment sales 471 704 6 477 6 1,664 Total sales 1,988 2,753 2,117 1,160 31 8,049 Research, development and engineering expenses 76 109 13 64 36 298 Equity, royalty and interest income (loss) from investees 28 42 (3) 16 11 (1) 96 Interest income 1 4 2 1 — 8 Russian suspension costs (4) 6 32 (5) 100 20 — 158 Segment EBITDA 320 390 110 90 (65) 845 Depreciation and amortization (2) 43 51 28 31 7 160 (1) Includes $12 million of costs associated with the planned separation of our filtration business. (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 Net Income as interest expense. The amortization of debt discount and deferred costs was $1 million and $1 million for the three months ended March 31, 2023 and March 31, 2022, respectively. A portion of depreciation expense is included in research, development and engineering expenses. (3) Includes a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the suspension of our Russian operations. See NOTE 15, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information. (4) See NOTE 15, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information. (5) Includes $31 million of Russian suspension costs reflected in the equity, royalty and interest income (loss) from investees line above.
Reconciliation of segment information	A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Net Income is shown in the table below: Three months ended March 31, In millions 2023 2022 TOTAL SEGMENT EBITDA $ 1,424 $ 845 Intersegment eliminations and other (1) (63) (90) Less: Interest expense 87 17 Depreciation and amortization 245 160 INCOME BEFORE INCOME TAXES $ 1,029 $ 578 (1) Intersegment eliminations and other included $6 million and $17 million of costs associated with the planned separation of our filtration business for the three months ended March 31, 2023 and 2022.

NATURE OF OPERATIONS AND BASI_3

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) location country shares	Mar. 31, 2022 USD ($) shares	Dec. 31, 2022 USD ($)
Real Estate Properties [Line Items]
Company Owned and Independent Distributor Locations Number | location	460
Countries and Territories Number | country	190
Options excluded (in shares) | shares	4,833	20,463
Revenue from Related Parties	$ 376	$ 344
Related Party Transaction, Purchases from Related Party	704	$ 427
Due from Related Parties, Current	469		$ 376
Accounts Payable, Related Parties	370		292
Supply Chain Financing, Program Maximum	532
SupplierFinanceProgramObligationCurrent	$ 253		$ 331
Minimum
Real Estate Properties [Line Items]
Dealer Locations Number | location	10,000

REVENUE RECOGNITION LONGTERM _2

REVENUE RECOGNITION LONGTERM CONTRACTS AND DEFERRED AND UNBILLED REVENUE (Details 1) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 649
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unbilled revenue	332		$ 257
Deferred revenue	1,977		$ 1,848
Contract with Customer, Liability, Revenue Recognized	206	$ 240
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue from Contract with Customer [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 126
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Revenue from Contract with Customer [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 523
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	10 years

REVENUE RECOGNITION DISAGGREG_3

REVENUE RECOGNITION DISAGGREGATION OF REVENUES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	$ 8,453	$ 6,385
Axles and brakes (CBU business)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	1,272	0
Emission solutions (CBU business)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	939	808
Filtration (CBU business)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	342	308
Engine Components (CBU business)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	292	240
Automated Transmissions (CBU business)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	178	134
Software and electronics (CBU business)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	20	27
Heavy-duty truck (EBU market)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	860	684
Medium-duty truck and bus (EBU market)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	617	591
Light-duty automotive (EBU market)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	441	487
On-highway (EBU market)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	1,918	1,762
Off-highway (EBU market)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	334	287
Parts (DBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	1,052	926
Power Generation (DBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	491	398
Engines (DBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	456	438
Service (DBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	400	349
Power Generation (PSBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	380	399
Industrial (PSBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	189	188
Generator technologies (PSBU product line)
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	110	96
Components
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	3,557	1,988
Engine
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	2,986	2,753
Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	2,406	2,117
Power Systems
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	1,343	1,160
External Sales | Components
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	3,043	1,517
External Sales | Engine
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	2,252	2,049
External Sales | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	2,399	2,111
External Sales | Power Systems
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	679	683
UNITED STATES
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	4,802	3,457
CHINA
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	790	653
CHINA | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	101	82
INDIA
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	411	309
INDIA | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	57	48
OTHER INTERNATIONAL
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	2,450	1,966
NORTH AMERICA | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	1,693	1,371
ASIA PACIFIC | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	239	244
EUROPE | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	194	275
AFRICA AND MIDDLE EAST | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	62	50
LATIN AMERICA | Distribution
Disaggregation of Revenue [Line Items]
NET SALES (Notes 1 and 2)	$ 53	$ 41

PENSION AND OTHER POSTRETIREM_3

PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Apr. 01, 2023
Pension and other postretirement benefits
Defined contribution pension plans	$ 43	$ 36
Pension Plan
Pension and other postretirement benefits
Defined Benefit Plan, Plan Assets, Contributions by Employer	88	33
Other Postretirement Benefits Plan
Pension and other postretirement benefits
Defined Benefit Plan, Plan Assets, Contributions by Employer	4	10
Components of Net Periodic Benefit Cost
Service cost	0	0
Interest cost	2	1
Expected return on plan assets	0	0
Recognized net actuarial loss	(1)	0
Net periodic benefit cost	1	1
Estimate | Pension Plan
Pension and other postretirement benefits
Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year			$ 20
Net periodic pension cost			$ 0
UNITED STATES | Pension Plan
Components of Net Periodic Benefit Cost
Service cost	29	34
Interest cost	42	22
Expected return on plan assets	(69)	(52)
Recognized net actuarial loss	2	6
Net periodic benefit cost	4	10
UNITED KINGDOM | Pension Plan
Components of Net Periodic Benefit Cost
Service cost	4	8
Interest cost	17	9
Expected return on plan assets	(25)	(20)
Recognized net actuarial loss		1
Net periodic benefit cost	$ (4)	$ (2)

EQUITY, ROYALTY AND INTEREST _3

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	$ 119	$ 96
Impairment of Equity Method Investment		31
Dongfeng Cummins Engine Company Ltd
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	19	16
Beijing Foton Cummins Engine Company
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	16	14
Chongqing Cummins Engine Company, Ltd.
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	9	9
Tata Cummins, Ltd.
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	8	9
All other manufacturers
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	19	(10)
Komatsu Cummins Chile, Ltda. (Distribution)
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	14	7
All other distributors
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	3	2
Cummin's Share of Equity Earnings
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	88	47
Joint Venture with KAMAZ
Schedule of Equity Method Investments [Line Items]
Impairment of Equity Method Investment		28
Royalty charges
Schedule of Equity Method Investments [Line Items]
Impairment of Equity Method Investment		3
Royalty and interest income
Schedule of Equity Method Investments [Line Items]
Equity, royalty and interest income from investees	$ 31	$ 49

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate (as a percent)	21.70%	26.80%
Discrete Tax Expense (Benefit)	$ 3	$ 31
Uncertainty in Russian Operations Tax Adjustments		18
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability		9
Other Discrete Tax Expenses		$ 4

MARKETABLE SECURITIES (Details)

MARKETABLE SECURITIES (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Schedule of Available-for-sale Securities
Debt Securities, Available-for-sale, Amortized Cost	$ 1		$ 2
Debt Securities, Available for sale, Unrealized Gain (Loss)	1		0
Debt Securities, Available-for-sale	2		2
Debt Securities, Trading, and Equity Securities, FV-NI, Cost	464		474
Marketable Securities, Unrealized Gain / (Loss)	(5)		(2)
Marketable securities	459		472
Proceeds from Sale of Held-to-maturity Securities	276	$ 195
Proceeds from Maturity of Marketable Securities	69	59
Proceeds from sales and maturities of marketable securities	345	$ 254
Certificates of deposit
Schedule of Available-for-sale Securities
Equity Securities, cost	226		209
Equity Securities, Unrealized Gain (Loss)	0		0
Equity Securities, Fair Value	226		209
Debt Mutual Funds
Schedule of Available-for-sale Securities
Equity Securities, cost	206		238
Equity Securities, Unrealized Gain (Loss)	(4)		(5)
Equity Securities, Fair Value	202		233
Equity mutual funds
Schedule of Available-for-sale Securities
Equity Securities, cost	31		25
Equity Securities, Unrealized Gain (Loss)	(2)		3
Equity Securities, Fair Value	$ 29		$ 28
Minimum | Certificates of deposit
Schedule of Available-for-sale Securities
Maturities of Time Deposits, Description	three months
Maximum | Certificates of deposit
Schedule of Available-for-sale Securities
Maturities of Time Deposits, Description	five years

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Finished products	$ 3,089	$ 2,917
Work-in-process and raw materials	3,019	2,926
Inventories at FIFO cost	6,108	5,843
Excess of FIFO over LIFO	(230)	(240)
Total inventories	$ 5,878	$ 5,603

SUPPLEMENTAL BALANCE SHEET DA_3

SUPPLEMENTAL BALANCE SHEET DATA (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]
Deferred income taxes	$ 688	$ 625
Operating lease assets	489	492
Corporate owned life insurance	409	390
Other Assets, Miscellaneous, Noncurrent	528	633
Other assets	2,114	2,140
Income taxes payable	341	173
Marketing accruals	339	316
Other taxes payable	226	224
Current portion of operating lease liabilities	133	132
Other Accrued Liabilities, Current	609	620
Other accrued expenses	1,648	1,465
Long-term portion of accrued product warranty	753	744
Deferred income taxes	662	649
Pensions	442	445
Operating lease liabilities	364	368
Long-term income taxes	192	192
Accrued compensation	172	184
Liability, Other Postretirement Defined Benefit Plan	138	141
Mark-to-market valuation on interest rate derivatives	118	151
Other Accrued Liabilities, Noncurrent	442	437
Other liabilities	$ 3,283	$ 3,311

DEBT (Details)

DEBT (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Aug. 17, 2022	Aug. 18, 2021
Debt Instruments
Loans payable	$ 229		$ 210
Commercial paper	2,545		2,574
Line of Credit Facility, Maximum Borrowing Capacity	4,000
Line of Credit Facility, Remaining Borrowing Capacity	1,500
Other Long-term Debt	109		121
Unamortized discount and deferred issuance costs	(63)		(64)
Fair value adjustments due to hedge on indebtedness	(102)		(122)
Finance Lease, Liability	111		113
Total long-term debt	4,978		5,071
Current maturities of long-term debt	569		573
Long-term debt	4,409		4,498
Repayment of Long-Term Debt	(142)	$ (24)
Principal payments
2023	559
2024	46
2025	1,962
2026	56
2027	65
Fair value
Fair value of total debt	7,386		7,400
Carrying value of total debt	$ 7,752		7,855
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Principal payments
Debt Instrument, Description of Variable Rate Basis	SOFR
Senior notes, due 2023(1)
Debt Instruments
Unsecured Debt	$ 500		500
Debt instrument interest rate (as a percent)	3.65%
Term loan, due 2025(2)
Debt Instruments
Unsecured Debt	$ 1,450		1,550
Repayment of Long-Term Debt	(100)
Senior notes, due 2025(3)
Debt Instruments
Unsecured Debt	$ 500		500
Debt instrument interest rate (as a percent)	0.75%
Debentures, due 2027
Debt Instruments
Unsecured Debt	$ 58		58
Debt instrument interest rate (as a percent)	6.75%
Debentures, due 2028
Debt Instruments
Unsecured Debt	$ 250		250
Debt instrument interest rate (as a percent)	7.125%
Senior notes, due 2030(3)
Debt Instruments
Unsecured Debt	$ 850		850
Debt instrument interest rate (as a percent)	1.50%
Senior notes, due 2043
Debt Instruments
Unsecured Debt	$ 500		500
Debt instrument interest rate (as a percent)	4.875%
Senior notes, due 2050
Debt Instruments
Unsecured Debt	$ 650		650
Debt instrument interest rate (as a percent)	2.60%
Debentures, due 2098(4)
Debt Instruments
Unsecured Debt	$ 165		$ 165
Debt instrument interest rate (as a percent)	5.65%
Effective interest rate (as a percent)	7.48%
Filtration Facilities
Debt Instruments
Debt instrument interest rate (as a percent)	0.10%
Principal payments
Debt Instrument, Unused Borrowing Capacity, Amount	$ 1,000
Filtration Facilities | Minimum
Principal payments
Debt Instrument, Basis Spread on Variable Rate	1.125%
Filtration Facilities | Maximum
Principal payments
Debt Instrument, Basis Spread on Variable Rate	1.75%
Filtration revolving credit facility
Principal payments
Debt Instrument, Unused Borrowing Capacity, Amount	$ 400
Filtration term loan facility
Principal payments
Debt Instrument, Unused Borrowing Capacity, Amount	$ 600
Commercial Paper
Debt Instruments
Weighted Average Interest Rate (as a percent)	4.82%		4.27%
Line of Credit Facility, Maximum Borrowing Capacity	$ 4,000
International and Other Lines of Credit
Debt Instruments
Line of Credit Facility, Remaining Borrowing Capacity	$ 215
1-year revolving credit agreement
Debt Instruments
Line of Credit Facility, Maximum Borrowing Capacity				$ 1,500
Incremental Domestic Line of Credit
Debt Instruments
Line of Credit Facility, Maximum Borrowing Capacity				$ 500
5-Year Revolving Credit Facility
Debt Instruments
Line of Credit Facility, Maximum Borrowing Capacity					$ 2,000

PRODUCT WARRANTY LIABILITY (Det

PRODUCT WARRANTY LIABILITY (Details 1) Warranty Footnote Disclosure - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Product Warranties Disclosures [Abstract]
Balance, beginning of year	$ 2,477	$ 2,425
Provision for base warranties issued	146	123
Deferred revenue on extended warranty contracts sold	102	70
Provision for product campaigns issued	6	42
Payments made during period	(143)	(132)
Amortization of deferred revenue on extended warranty contracts	(75)	(73)
Changes in estimates for pre-existing product warranties and campaigns	10	(26)
Acquisitions	0	95
Foreign currency translation adjustments and other	7	(1)
Balance, end of period	2,530	2,523
Supplier recoveries	10	$ 13
Product Warranty Liability
Current portion of warranty related deferred revenue	1,040		$ 1,004
Long term portion of warranty related deferred revenue	937		844
Deferred Revenue Related to extended coverage, Total	1,031		1,007
Current portion of accrued product warranty	746		726
Long-term portion of accrued product warranty	753		744
Standard Product Warranty Accrual	1,499		1,470
Current portion of deferred revenue
Product Warranty Liability
Current portion of warranty related deferred revenue	289		290
Deferred revenue
Product Warranty Liability
Long term portion of warranty related deferred revenue	742		717
Current portion of accrued product warranty
Product Warranty Liability
Current portion of accrued product warranty	746		726
Other liabilities
Product Warranty Liability
Long-term portion of accrued product warranty	$ 753		$ 744

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Sep. 30, 2022	Mar. 31, 2022
Guarantee Obligations
Provision for product campaigns issued		$ 29	$ 30
Guarantor obligations, maximum potential loss	$ 42
Long-term purchase commitment, penalty exposure	161
Total commitments under commodity contracts	38
Performance Bonds and Other Performance Guarantees	$ 126
Maximum
Guarantee Obligations
Forward Contract, Term	two years

REDEEMABLE NONCONTROLLING INT_2

REDEEMABLE NONCONTROLLING INTERESTS (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Noncontrolling Interest [Abstract]
Redeemable Noncontrolling Interest, Equity, Carrying Amount	$ 261	$ 258
Minority owner of Hydrogenics
Noncontrolling Interest [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	19%

ACCUMULATED OTHER COMPREHENSI_3

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at the beginning of the period	$ (1,890)
Before tax amount	62	$ 53
Tax (expense) benefit	7	(10)
After tax amount	69	43
Amounts reclassified from accumulated other comprehensive income (loss)(1)	1	5
Net current period other comprehensive (loss) income	70	48
Balance at the end of the period	(1,823)
Change in pensions and other postretirement defined benefit plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at the beginning of the period	(427)	(346)
Before tax amount	(13)	14
Tax (expense) benefit	2	(4)
After tax amount	(11)	10
Amounts reclassified from accumulated other comprehensive income (loss)(1)	2	6
Net current period other comprehensive (loss) income	(9)	16
Balance at the end of the period	(436)	(330)
Foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at the beginning of the period	(1,552)	(1,208)
Before tax amount	75	11
Tax (expense) benefit	4	1
After tax amount	79	12
Amounts reclassified from accumulated other comprehensive income (loss)(1)	0	0
Net current period other comprehensive (loss) income	79	12
Balance at the end of the period	(1,473)	(1,196)
Unrealized gain (loss) on derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at the beginning of the period	89	(17)
Before tax amount	(3)	36
Tax (expense) benefit	1	(7)
After tax amount	(2)	29
Amounts reclassified from accumulated other comprehensive income (loss)(1)	(1)	(1)
Net current period other comprehensive (loss) income	(3)	28
Balance at the end of the period	86	11
Total attributable to Cummins Inc.
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance at the beginning of the period	(1,890)	(1,571)
Before tax amount	59	61
Tax (expense) benefit	7	(10)
After tax amount	66	51
Amounts reclassified from accumulated other comprehensive income (loss)(1)	1	5
Net current period other comprehensive (loss) income	67	56
Balance at the end of the period	(1,823)	(1,515)
Noncontrolling interests
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Before tax amount	3	(8)
Tax (expense) benefit	0	0
After tax amount	3	(8)
Amounts reclassified from accumulated other comprehensive income (loss)(1)	0	0
Net current period other comprehensive (loss) income	$ 3	$ (8)

DERIVATIVES (Details)

DERIVATIVES (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended	15 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Mar. 31, 2023	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain (Loss) on Swaps	$ 27	$ (72)
Gain (Loss) on Borrowings	(22)	$ 80
Derivative Assets (Liabilities), at Fair Value, Net	29		$ 52	$ 29
Derivative, Net Liability Position, Aggregate Fair Value	113		100	113
Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	2,898		3,051	2,898
Derivative Asset	51		98	51
Derivative Liability	140		170	140
Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	3,688		2,900	3,688
Derivative Asset	7		27	7
Derivative Liability	2		3	2
Prepaid Expenses and Other Current Assets | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Asset	16		18	16
Prepaid Expenses and Other Current Assets | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Asset	7		27	7
Other Noncurrent Assets | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Asset	35		80	35
Other Noncurrent Assets | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Asset	0		0	0
Other accrued expenses | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Liability	22		19	22
Other accrued expenses | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Liability	2		3	2
Other liabilities | Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Liability	118		151	118
Other liabilities | Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Liability	$ 0		0	0
Sales
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Revenues	Revenues
Cost of Sales
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Cost of sales	Cost of sales
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ (2)	$ (1)
Other Nonoperating Income (Expense)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	27	8
Foreign Exchange Forward
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	$ 4,400		$ 3,600	4,400
Foreign Exchange Forward | Foreign currencies | Geographic Concentration Risk
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Concentration Risk, Percentage	86%		88%
Net Investment Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	$ 724			724
Gain (Loss)  Recognized in AOCL	(15)
Gain (Loss) Reclassified from AOCL into Earnings	0
Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount Settled	100
Derivative, Cash Received on Hedge	7
Interest Rate Lock
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	500			500	$ 150	$ 350
Gain (Loss)  Recognized in AOCL	(9)	39
Gain (Loss) Reclassified from AOCL into Earnings	0	$ 0
Derivative, Notional Amount Settled	100		$ 150
Derivative, Cash Received on Hedge	34		49	83
Senior notes, due 2025(3)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unsecured Debt	$ 500		500	$ 500
Debt instrument interest rate (as a percent)	0.75%			0.75%
Senior notes, due 2025(3) | London Interbank Offered Rate (LIBOR)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Debt Instrument, Description of Variable Rate Basis	LIBOR
Senior notes, due 2030(3)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unsecured Debt	$ 850		$ 850	$ 850
Debt instrument interest rate (as a percent)	1.50%			1.50%
Senior notes, due 2030(3) | Interest Rate Swap
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	$ 765			$ 765
Senior notes, due 2030(3) | London Interbank Offered Rate (LIBOR)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Debt Instrument, Description of Variable Rate Basis	LIBOR

RUSSIAN OPERATIONS (Details)

RUSSIAN OPERATIONS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Restructuring and Related Activities [Abstract]
Inventory Write-down		$ 59
Accounts Receivable, Allowance for Credit Loss, Writeoff		43
Impairment of Equity Method Investment		31
Other Restructuring Costs		25
Russian suspension costs (recoveries)	$ 0	$ 158

ACQUISITIONS (Details)

ACQUISITIONS (Details) $ in Millions	Feb. 07, 2022 USD ($)
Westport Fuel System Inc.
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	$ 42

OPERATING SEGMENTS (Details)

OPERATING SEGMENTS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment reporting
NET SALES (Notes 1 and 2)	$ 8,453	$ 6,385
Research, development and engineering expenses	350	298
Income (Loss) from Equity Method Investments	119	96
Russian suspension costs (recoveries)	0	158
Interest expense	87	17
Depreciation and amortization	245	160
INCOME BEFORE INCOME TAXES	1,029	578
Amortization of Debt Discount (Premium)	1	1
Impairment of Equity Method Investment		31
Joint Venture with KAMAZ
Segment reporting
Impairment of Equity Method Investment		28
Royalty charges
Segment reporting
Impairment of Equity Method Investment		3
Components
Segment reporting
NET SALES (Notes 1 and 2)	3,557	1,988
Research, development and engineering expenses	91	76
Income (Loss) from Equity Method Investments	21	28
Interest income	6	1
Russian suspension costs (recoveries)		6
Segment EBITDA	507	320
Depreciation and amortization	123	43
Filtration business separation costs	12
Engine
Segment reporting
NET SALES (Notes 1 and 2)	2,986	2,753
Research, development and engineering expenses	134	109
Income (Loss) from Equity Method Investments	65	42
Interest income	3	4
Russian suspension costs (recoveries)		32
Segment EBITDA	457	390
Depreciation and amortization	51	51
Distribution
Segment reporting
NET SALES (Notes 1 and 2)	2,406	2,117
Research, development and engineering expenses	14	13
Income (Loss) from Equity Method Investments	24	16
Interest income	7	2
Russian suspension costs (recoveries)		100
Segment EBITDA	335	110
Depreciation and amortization	28	28
Power Systems
Segment reporting
NET SALES (Notes 1 and 2)	1,343	1,160
Research, development and engineering expenses	63	64
Income (Loss) from Equity Method Investments	13	11
Interest income	2	1
Russian suspension costs (recoveries)		20
Segment EBITDA	219	90
Depreciation and amortization	29	31
Accelera
Segment reporting
NET SALES (Notes 1 and 2)	85	31
Research, development and engineering expenses	48	36
Income (Loss) from Equity Method Investments	(4)	(1)
Interest income	0	0
Russian suspension costs (recoveries)		0
Segment EBITDA	(94)	(65)
Depreciation and amortization	14	7
Total Segments
Segment reporting
NET SALES (Notes 1 and 2)	10,377	8,049
Research, development and engineering expenses	350	298
Income (Loss) from Equity Method Investments	119	96
Interest income	18	8
Russian suspension costs (recoveries)		158
Segment EBITDA	1,424	845
Depreciation and amortization	245	160
Corporate and Other
Segment reporting
Segment EBITDA	(63)	(90)
Filtration business separation costs	6	17
External Sales | Components
Segment reporting
NET SALES (Notes 1 and 2)	3,043	1,517
External Sales | Engine
Segment reporting
NET SALES (Notes 1 and 2)	2,252	2,049
External Sales | Distribution
Segment reporting
NET SALES (Notes 1 and 2)	2,399	2,111
External Sales | Power Systems
Segment reporting
NET SALES (Notes 1 and 2)	679	683
External Sales | Accelera
Segment reporting
NET SALES (Notes 1 and 2)	80	25
External Sales | Total Segments
Segment reporting
NET SALES (Notes 1 and 2)	8,453	6,385
Intersegment sales | Components
Segment reporting
NET SALES (Notes 1 and 2)	514	471
Intersegment sales | Engine
Segment reporting
NET SALES (Notes 1 and 2)	734	704
Intersegment sales | Distribution
Segment reporting
NET SALES (Notes 1 and 2)	7	6
Intersegment sales | Power Systems
Segment reporting
NET SALES (Notes 1 and 2)	664	477
Intersegment sales | Accelera
Segment reporting
NET SALES (Notes 1 and 2)	5	6
Intersegment sales | Total Segments
Segment reporting
NET SALES (Notes 1 and 2)	$ 1,924	$ 1,664

RECENTLY ADOPTED AND RECENTLY_2

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details)	3 Months Ended
	Mar. 31, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Description	In September 2022, the Financial Accounting Standards Board issued a standard related to the disclosure of additional information about the use of supplier finance programs. Under the new standard, entities are required to disclose (1) key terms of the programs, (2) the amount outstanding that remains unpaid as of the end of the period, including where amounts are recorded in the balance sheets and (3) an annual rollforward of those obligations, including the amount of obligations confirmed and the amount of obligations subsequently paid. We adopted the new standard on January 1, 2023, on a retrospective basis other than the rollforward, which we currently plan to early adopt on a prospective basis beginning with our 2023 annual financial statements. The adoption did not have a material impact on our financial statements. See "Supply Chain Financing" section in NOTE 1, "NATURE OF OPERATIONS AND BASIS OF PRESENTATION," for additional information.

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) € in Millions	Apr. 03, 2023 EUR (€)
Subsequent Event | Teksid
Subsequent Event [Line Items]
Business Combination, Consideration Transferred	€ 138