Cummins Inc., balance sheet: debt

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Loans payable	280)	210)	208)	169)	100)
Commercial paper	1,496)	2,574)	313)	323)	660)
Current maturities of long-term debt	118)	573)	59)	62)	31)
Long-term debt	4,802)	4,498)	3,579)	3,610)	1,576)
Total debt (carrying amount)	6,696)	7,855)	4,159)	4,164)	2,367)

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Debt item	Description	The company
Total debt (carrying amount)	Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations.	Cummins Inc. total debt increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

	Dec 31, 2023
Selected Financial Data (US$ in millions)
Total debt (fair value)	6,375)
Financial Ratio
Debt, fair value to carrying amount ratio	0.95

Weighted-average interest rate on debt: 3.74%

Interest rate	Debt amount¹	Interest rate × Debt amount
3.31%	280)	9)
5.43%	1,496)	81)
0.00%	160)	—)
0.75%	500)	4)
6.75%	58)	4)
7.13%	250)	18)
1.50%	850)	13)
4.88%	500)	24)
2.60%	650)	17)
7.48%	165)	12)
5.00%	111)	6)
Total	5,020)	188)
3.74%

¹ US$ in millions

² Weighted-average interest rate = 100 × 188 ÷ 5,020 = 3.74%

Cummins Inc., interest costs incurred

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Interest expense	375)	199)	111)	100)	109)
Interest capitalized	8)	5)	2)	2)	3)
Interest incurred	383)	204)	113)	102)	112)

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Debt item	Description	The company
Interest expense	Amount of the cost of borrowed funds accounted for as interest expense for debt.	Cummins Inc. interest expense increased from 2021 to 2022 and from 2022 to 2023.
Interest capitalized	Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred.	Cummins Inc. interest capitalized increased from 2021 to 2022 and from 2022 to 2023.
Interest incurred	Total interest costs incurred during the period and either capitalized or charged against earnings.	Cummins Inc. interest incurred increased from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Net income attributable to Cummins Inc.	735)	2,151)	2,131)	1,789)	2,260)
Add: Net income attributable to noncontrolling interest	105)	32)	33)	22)	8)
Add: Income tax expense	786)	636)	587)	527)	566)
Add: Interest expense	375)	199)	111)	100)	109)
Earnings before interest and tax (EBIT)	2,001)	3,018)	2,862)	2,438)	2,943)

Interest incurred	383)	204)	113)	102)	112)
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)¹	5.34	15.17	25.78	24.38	27.00
Adjusted interest coverage ratio (with capitalized interest)²	5.22	14.79	25.33	23.90	26.28

2023 Calculations

¹ Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 2,001 ÷ 375 = 5.34

² Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest incurred
= 2,001 ÷ 383 = 5.22

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Solvency ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest).	Cummins Inc. adjusted interest coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Cummins Inc. (NYSE:CMI)

Analysis of Debt