Jennifer Rumsey
President and Chief Executive Officer at Cummins
Thank you, Chris. Good morning. I'll start with a summary of 2022, discuss our fourth quarter and full year results, and finish with a discussion of our outlook for 2023. Mark will then take you through more details of our fourth quarter and full year financial performance and our forecast for this year. Last year was an incredibly exciting one for Cummins and our stakeholders. We made significant strides in our inorganic growth strategy, most notably through the acquisitions of Jacobs Vehicle Systems, Meritor and the Siemens Commercial Vehicles business. We also navigated complex global supply chain challenges, advanced our preparations for the separation of our filtration business, and transitioned from Tom to me as the CEO. We accomplished all of this and delivered record revenues, EBITDA and earnings per share in 2022.
We did so with a focus on the exciting opportunity in front of us, to lead the industry to a broader, clean economy and do so in a way that is best for our stakeholders and the planet. Decarbonization is a growth opportunity for Cummins, uniting our business and climate goals. In 2022, we launched our long-term decarbonization growth strategy, Destination Zero, which includes making meaningful reductions in carbon emissions through advanced internal combustion technologies, widely accepted by the market today, while continuing to invest in and advance zero emission technologies ahead of widespread market adoption. As part of our organic growth strategy, we unveiled the industry's first unified fuel-agnostic internal combustion powertrain platforms. And we continue to see momentum in our electrolyzer technology and green hydrogen production opportunities.
Demand for our products remained strong across all of our key markets and regions with a notable exception of China, resulting in strong revenues in the fourth quarter. Fourth quarter revenues totaled $7.8 billion. Excluding the Meritor business, revenues for the fourth quarter of 2022 were $6.6 billion, an increase of 13% from the fourth quarter of 2021, primarily driven by increased demand in many of our North American markets. To provide clarity on the fourth quarter and 2022 full year operational performance of our business and allow comparison to our prior guidance, I'm excluding the Meritor operating results and associated acquisition and integration costs. The costs related to the separation of the filtration business and the costs associated with the indefinite suspension of our operations in Russia. Mark will provide more detail on the reported results in his comments.
With these exclusions considered, EBITDA was $1.1 billion, or 16.1% of sales in Q4, above our guidance of 15.5% and stronger than the $705 million, or 12.1% reported a year ago. EBITDA and EBITDA percentage improved due to an increase in gross margins with positive pricing, higher volumes, lower product coverage costs, and some improvement and logistics costs all of which offset increases in material costs. Gross margin improvement is key to meeting our long-term goals of increasing the returns in our core business while transitioning our New Power business to break even EBITDA by 2027.
In the fourth quarter, Meritor operating performance and financial results showed improvement, and we continue to accelerate value-capture opportunities across the business. Our employees have done an excellent job in integrating the Meritor operations and people within Cummins, and continue to make strides in identifying cost-reduction opportunities. We remain confident in our ability to achieve the $130 million in pre-tax synergies we referenced upon completion of the acquisition. And in addition, we expect to deliver incremental tax synergies as we integrate the business.
Excluding Meritor, 2022 revenues were a record $26.2 billion, 9% higher than 2021. Also excluding Meritor, the costs related to the planned separation of the Filtration business and the impact of the indefinite suspension of our Russian operations, full year EBITDA was $4 billion, or 15.1% of sales compared to $3.5 billion, or 14.7% of sales in 2021. Improved volumes, better price realization and an improved supply chain environment more than offset higher compensation expenses, increased material costs and lower joint venture income for the year.
EBITDA percent improved year-over-year in Engine, Power Systems, Distribution, and Components segments. Leading the way with the Components segment, which delivered 150 basis points of EBITDA margin expansion. The Power Systems business finished 2022 with another solid quarter and delivered full year EBITDA of 12.2%, up from 11.2% last year. The improvement in performance in this segment over the past six months is encouraging, and you will see from our guidance that we expect further margin gains this year. EBITDA margins in the distribution business increased by 110 basis points. Our reported full year 2022 results include five months of operational performance for Meritor, or $1.9 billion of revenue and $26 million of EBITDA, including $115 million of acquisition, integration, and purchase accounting related costs.
Now let me provide our overall outlook for 2023, and then comment on individual regions and end markets. Our 2023 guidance includes our expected results of the Meritor business and excludes the costs or benefits associated with the separation of the Filtration business. We are forecasting total company revenues for 2023 to increase 12% to 17% compared to 2022, and EBITDA to be 14.5% to 15.2% of sales driven by the inclusion of a full year of sales from Meritor, continued strength in the North American truck market, improved demand in power generation markets, overall pricing improvement and slow improvement in the China on-highway market.
Industry production for heavy-duty trucks in North America is projected to be 260,000 to 280,000 units in 2023, a range of a 5% decline to 2% improvement year-over-year. In medium duty-truck, we expect the market size to be 125,000 to 140,000 units, flat to up 10% from 2022. We expect our deliveries in North America to continue to outpace the market as the engine partnerships we announced in 2021 continue to phase in. Our engine shipments for pickup trucks in North America are expected to be 140,000 to 150,000 units in 2023, volume levels consistent with 2022. In China, we project total revenue, including joint ventures to increase 7% in 2023. We project a 15% to 25% improvement in heavy and medium-duty truck demand, and 10% to 20% improvement and demand in the light-duty truck market, coming off the low market levels in 2022.
Industry sales of excavators in China are expected to decline 25% to 35% in 2023, as the market adjusts to new emissions regulations and adjust the inventory on hand. We are watching the situation in China closely with ensuring the safety and well-being of our people as our first priority. The change in the country's COVID lockdown policy could positively impact our operations in the coming months. The current events make it difficult to gauge. The markets within China are at a low point as we close out 2022 and our guidance assumes a slow recovery in 2023.
In India, we project total revenue including joint ventures to be up 1% in 2023. We expect the industry demand for trucks to be flat to up 5% for the year. We project our major global high horsepower markets to remain strong in 2023. Sales of mining engines are expected to be down 5% to up 5% dependent upon the trajectory of commodity prices and supply chain improvements. Demand for new oil and gas engines is expected to increase by 15% to 25% in 2023, primarily driven by increased demand in North America. Revenues in global power generation markets are expected to increase 10% to 15%, driven by increases in non-residential construction and improvements in the data center market.
In New Power, we expect full year sales to be $350 million to $400 million, more than doubling our 2022 revenues. We have a growing pipeline of electrolyzer orders, which we expect to convert to backlog and to be delivered over the course of the next 12 months to 18 months. At the end of the first quarter of 2022, we shared that we had reached the milestone of $100 million in electrolyzer backlog. This tripled to $300 million at the end of 2022, demonstrating the strong momentum in this market. With demand continuing to rise, we are focused on adding capacity for electrolyzer production. During 2022, we announced several capacity expansion investments and expect to have more than two gigawatts of scalable capacity in the 2024 to 2025 timeframe across Europe, North America, and China. Additionally, we will continue to deliver battery electric and fuel cell systems, along with electric powertrain technologies as adoption continues in the transportation markets.
As mentioned, Meritor results are included in our overall guidance for 2023. We are continuing to drive improvement in our margins post acquisition and expect Meritor to be accretive to earnings per share in 2023. We will continue to provide updates on the progress of our value capture initiatives, which will be focused on the portion of the business within our Components segment. Within Components, we expect Meritor to add $4.5 billion to $4.7 billion in revenue in 2023, with EBITDA margins in the range of 10.3% to 11%, an improvement from the comparable 2022 EBITDA margin of 7.2%. The electric powertrain portion of the Meritor business has been integrated within the New Power portfolio with projected 2023 EBITDA losses of $55 million included in the overall guidance for that segment.
In 2023, we anticipate that demand will remain strong in most of our key regions and markets, especially in the first half of the year. While some macroeconomic indicators have weakened in recent months, we have not seen a significant change in customer orders at this time. In summary, we expect full year sales growth of 12% to 17%, and EBITDA to be 14.5% to 15.2% of sales. We have taken a number of actions to improve our EBITDA in 2023 and expect to generate very strong incremental margins within our core business and improve the margins of the Meritor business, while continuing to invest in our New Power business. Having effectively managed through the challenges of the past couple of years, we expect improved performance in 2023 and are well-positioned to invest in future growth while continuing to return cash to shareholders.
Now let me turn it over to Mark, who will discuss our financial results in more detail.
