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Revenues of $1.4 billion in 2000 for the Power Generation Business were 3 percent higher than in 1999 and 13 percent higher than in 1998. Sales of the CompanyGLYPH<213>s generator sets in 2000 were flat compared to 1999. Engine sales to generator set assemblers were up 17 percent from the prior year. Alternator sales decreased 7 percent as compared to 1999. Sales of small generator sets for recreational vehicles and other consumer applications were flat compared to last year. 

Sales of $1.2 billion in 2000 for the Filtration Business and Other were 9 percent higher than in 1999 and 1998. In 2000, Fleetguard/Nelson revenues increased 2 percent, but reflected a drop in demand for OEM truck and construction equipment products as well as reduced sales to consumer-oriented small engine and equipment manufacturers. International distributor sales included in this segment increased 13 percent from 1999, while sales of Holset turbochargers increased 26 percent as compared to a year ago. 

Net sales by marketing territory for each of the last three years were: 

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In total, international markets accounted for 43 percent of the CompanyGLYPH<213>s revenues in 2000. Europe and the CIS, representing 13 percent of the CompanyGLYPH<213>s sales in 2000, were 8 percent higher than in 1999 and 9 percent higher than in 1998. Sales to Canada, representing 6 percent of sales in 2000, were 12 percent lower than in 1999. Asian and Australian markets, in total, represented 14 percent of the CompanyGLYPH<213>s sales in 2000, with increases in sales to Asia from 1999. In Asia, sales to Southeast Asia increased 14 percent, sales to Korea increased 23 percent, sales to China increased 25 percent and sales to Japan and India were slightly higher than 1999 levels. Business in Mexico and Latin America, representing 7 percent of sales in 2000, was 20 percent higher than in 1999. Sales to Africa/Middle East, representing 3 percent of sales in 2000, increased 72 percent from 1999. 

The CompanyGLYPH<213>s gross margin percentage was 19.1 percent in 2000, 21.4 percent in 1999 and 21.4 percent in 1998, excluding the special charges recorded for product coverage and inventory write-downs in 1998. The gross margin percent in 1998 including the special charges was 19.9 percent. Gross margins in 2000 were impacted by lower cost absorption in the CompanyGLYPH<213>s heavy-duty plants, changes in product mix, foreign exchange and higher product coverage costs. Product coverage costs were 4.2 percent of net sales in 2000, compared to 3.7 percent in 1999, and 3.3 percent in 1998, excluding the special charges. Including special charges, product coverage costs were 4.5 percent of net sales in 1998. 

Selling and administrative expenses were 11.8 percent of net sales in 2000, compared to 11.8 percent in 1999 and 12.5 percent in 1998. 

Research and engineering expenses were 3.7 percent of net sales in 2000, compared to 3.7 percent in 1999 and 4.1 percent in 1998. 

The CompanyGLYPH<213>s income from joint ventures and alliances was $9 million in 2000, compared to losses of $28 million in 1999 and losses of $30 million in 1998. This improvement resulted from the dissolution of the WGLYPH<138>rtsilGLYPH<138> joint venture at the end of 1999. 

In the past three years, Cummins has recorded restructuring and other charges to reflect business improvement initiatives committed to by the CompanyGLYPH<213>s management. 

As disclosed in Note 4 to the Consolidated Financial Statements, the Company recorded charges of $160 million ($103 million after tax, or $2.71 per share) reflecting restructur- ing actions, asset impairments and other activities largely focused in the Engine Business. These actions are taken in response to the downturn in the North American heavy-duty truck market and related conditions. The charges include $42 million attributable to employee severance actions, $72 million for impairment of equipment and other assets, $30 million for impairment of software developed for internal use where the programs were cancelled prior to implemen- tation and $16 million associated with exit costs to close or consolidate a number of smaller business operations. Of the $160 million charge, $131 million was assigned to the Engine Business, $19 million to the Power Generation Business and $10 million to the Filtration Business and Other. 

