OPERATING SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2025

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments for the three months ended March 31, 2025 and 2024 is shown in the table below:


In millions	Engine		Components			Distribution		Power Systems		Accelera		Total Segments
Three months ended March 31, 2025
External sales	$	2,040	$	2,270		$	2,902	$	872	$	90	$	8,174
Intersegment sales	731		400			5		777		13		1,926
Total sales	2,771		2,670			2,907		1,649		103		10,100
Cost of goods sold (excluding warranty expenses)	2,036		2,139			2,332		1,090		121		7,718
Warranty expenses	85		26			6		32		8		157
Selling expenses	59		41			157		46		7		310
Administrative expenses	138		119			91		100		13		461
Research, development and engineering expenses	155		75			14		57		43		344
Equity, royalty and interest income (loss) from investees	73		7			28		29		(6)		131
Other income (expense) (1)	20		(17)			9		3		(3)		12
Add back: Depreciation and amortization (2)	67		122			32		33		12		266
Segment EBITDA	$	458	$	382		$	376	$	389	$	(86)	$	1,519

Interest income (3)	$	10	$	7		$	5	$	4	$	—	$	26

Three months ended March 31, 2024
External sales	$	2,240	$	2,842		$	2,529	$	708	$	84	$	8,403
Intersegment sales	688		490			6		681		9		1,874
Total sales	2,928		3,332			2,535		1,389		93		10,277
Cost of goods sold (excluding warranty expenses)	2,190		2,636			2,046		997		120		7,989
Warranty expenses	105		62			5		15		8		195
Selling expenses	52		55			153		40		8		308
Administrative expenses	144		158			91		99		13		505
Research, development and engineering expenses	154		84			14		60		55		367
Equity, royalty and interest income (loss) from investees	57		26			24		19		(3)		123
Other income (expense) (1)	16		(15)			13		6		(1)		19
Add back: Depreciation and amortization (2)	58		125			31		34		14		262
Segment EBITDA	$	414	$	473	(4)	$	294	$	237	$	(101)	$	1,317

Interest income (3)	$	7	$	8		$	11	$	3	$	—	$	29


































(1) Other income (expense) includes other operating expense, net and other income, net from our Condensed Consolidated Statements of Net Income.
(2) Depreciation and amortization are not considered significant segment expenses but are presented here to reconcile to EBITDA, the measure used by our CODM. Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in our Condensed Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs was $3 million and $3 million for the three months ended March 31, 2025 and March 31, 2024, respectively. A portion of depreciation expense is included in research, development and engineering expenses.
(3) Interest income is a component of other income (expense).
(4) Included $21 million of costs associated with the divestiture of Atmus for the three months ended March 31, 2024. See NOTE 14, "ATMUS DIVESTITURE," for additional information.

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	2025		2024
TOTAL SEGMENT EBITDA	$	1,519	$	1,317

Intersegment eliminations and other (1)	(59)		1,255		(2)

Less:
Interest expense	77		89
Depreciation and amortization	266		262
INCOME BEFORE INCOME TAXES	$	1,117	$	2,221





(1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses.
(2) Included a $1.3 billion gain related the divestiture of Atmus and $14 million of costs associated with the divestiture of Atmus (included in corporate expenses) for the three months ended March 31, 2024. See NOTE 14, "ATMUS DIVESTITURE," for additional information.