OPERATING SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments for the three and six months ended June 30, 2023 and 2022 is shown in the table below:



In millions	Components			Engine			Distribution		Power Systems		Accelera		Total Segments
Three months ended June 30, 2023
External sales	$	2,924		$	2,263		$	2,576	$	794	$	81	$	8,638
Intersegment sales	501			725			19		663		4		1,912
Total sales	3,425			2,988			2,595		1,457		85		10,550
Research, development and engineering expenses	103			148			15		66		52		384
Equity, royalty and interest income (loss) from investees	24			71			24		18		(4)		133
Interest income	7			7			8		2		1		25
Segment EBITDA	486		(1)	425			299		201		(114)		1,297
Depreciation and amortization (2)	125			56			28		32		15		256

Three months ended June 30, 2022
External sales	$	1,477		$	2,092		$	2,247	$	734	$	36	$	6,586
Intersegment sales	473			683			6		469		6		1,637
Total sales	1,950			2,775			2,253		1,203		42		8,223
Research, development and engineering expenses	73			116			13		58		39		299
Equity, royalty and interest income (loss) from investees	9			58			21		10		(3)		95
Interest income	2			1			3		1		—		7
Russian suspension (recoveries) costs (3)	(2)			1			(45)		(1)		—		(47)
Segment EBITDA	352			421			297		128		(79)		1,119
Depreciation and amortization (2)	49			49			29		31		8		166

Six months ended June 30, 2023
External sales	$	5,967		$	4,515		$	4,975	$	1,473	$	161	$	17,091
Intersegment sales	1,015			1,459			26		1,327		9		3,836
Total sales	6,982			5,974			5,001		2,800		170		20,927
Research, development and engineering expenses	194			282			29		129		100		734
Equity, royalty and interest income (loss) from investees	45			136			48		31		(8)		252
Interest income	13			10			15		4		1		43
Segment EBITDA	993		(1)	882			634		420		(208)		2,721
Depreciation and amortization (2)	248			107			56		61		29		501

Six months ended June 30, 2022
External sales	$	2,994		$	4,141		$	4,358	$	1,417	$	61	$	12,971
Intersegment sales	944			1,387			12		946		12		3,301
Total sales	3,938			5,528			4,370		2,363		73		16,272
Research, development and engineering expenses	149			225			26		122		75		597
Equity, royalty and interest income (loss) from investees	37			100		(4)	37		21		(4)		191
Interest income	3			5			5		2		—		15
Russian suspension costs (3)	4			33		(5)	55		19		—		111
Segment EBITDA	672			811			407		218		(144)		1,964
Depreciation and amortization (2)	92			100			57		62		15		326


(1) Includes $18 million and $30 million of costs associated with the IPO and separation of Atmus for the three and six months ended June 30, 2023, respectively. See NOTE 15, "FORMATION OF ATMUS AND IPO," to our Condensed Consolidated Financial Statements for additional information.
(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 $2 million and $2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. A portion of depreciation expense is included in research, development and engineering expenses.
(3) See NOTE 14, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information.
(4) 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 indefinite suspension of our Russian operations. See NOTE 14, "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				Six months ended
	June 30,				June 30,
In millions	2023		2022		2023		2022
TOTAL SEGMENT EBITDA	$	1,297	$	1,119	$	2,721	$	1,964

Intersegment eliminations and other (1)	7		(64)		(56)		(154)

Less:
Interest expense	99		34		186		51
Depreciation and amortization	256		166		501		326
INCOME BEFORE INCOME TAXES	$	949	$	855	1,978		1,433





(1) Intersegment eliminations and other included $5 million and $11 million of costs associated with the IPO and separation of Atmus for the three and six month periods ended June 30, 2023, respectively and $24 million and $41 million for the comparable periods in 2022, respectively. See NOTE 15, "FORMATION OF ATMUS AND IPO," to our Condensed Consolidated Financial Statements for additional information.