37030b67303533a976cfe430b3385eb1d946498ea7e70129a74ade009d9ef20f

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

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Number of heavy-duty engines shipped (units)

Number of medium-duty engines shipped (units)

Number of light-duty engines shipped (units)

Number of total engines shipped (units)

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Net Sales (USD, millions)

Cost of Sales (USD, millions)

Gross Margin (USD, millions)

Selling, General and Administrative Expenses (USD, millions)

Research, Development and Engineering Expenses (USD, millions)

Equity, Royalty and Interest Income from Investees (USD, millions)

Other Operating Expense, Net (USD, millions)

Operating Income (USD, millions)

Interest Expense (USD, millions)

Other Income, Net (USD, millions)

Income Before Income Taxes (USD, millions)

Income Tax Expense (USD, millions)

Consolidated Net Income (USD, millions)

Net Income Attributable to Noncontrolling Interests (USD, millions)

Net Income Attributable to Cummins Inc. (USD, millions)

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Gain related to divestiture of Atmus (USD, millions)

Depreciation and Amortization (USD, millions)

Equity in Income of Investees, Net of Dividends (USD, millions)

Pension and OPEB Expense (USD, millions)

Pension Contributions and OPEB Payments (USD, millions)

Russian Suspension Costs, Net of Recoveries (USD, millions)

Other, Net - Operating Activities (USD, millions)

Net Cash Provided by Operating Activities (USD, millions)

Capital Expenditures (USD, millions)

Investments in and Net Advances to Equity Investees (USD, millions)

Acquisition of Businesses, Net of Cash Acquired (USD, millions)

Investments in Marketable Securities—Acquisitions (USD, millions)

Investments in Marketable Securities—Liquidations (USD, millions)

Cash Associated with Atmus Divestiture (USD, millions)

Other, Net - Investing Activities (USD, millions)

Net Cash Used in Investing Activities (USD, millions)

Proceeds from Borrowings (USD, millions)

Net (Payments) Borrowings of Commercial Paper (USD, millions)

Payments on Borrowings and Finance Lease Obligations (USD, millions)

Dividend Payments on Common Stock (USD, millions)

Repurchases of Common Stock (USD, millions)

Payments for Purchase of Redeemable Noncontrolling Interests (USD, millions)

Other, Net - Financing Activities (USD, millions)

Net Cash (Used in) Provided by Financing Activities (USD, millions)

Effect of Exchange Rate Changes on Cash and Cash Equivalents (USD, millions)

Net (Decrease) Increase in Cash and Cash Equivalents (USD, millions)

Deferred Income Taxes (USD, millions)

Accounts and Notes Receivable (USD, millions)

Inventories (USD, millions)

Other Current Assets (USD, millions)

Accounts Payable (USD, millions)

Accrued Expenses (USD, millions)

Cash and Cash Equivalents at Beginning of Year (USD, millions)

Cash and Cash Equivalents at End of Period (USD, millions)

896f0a0635957a2f4b86399717bfd7e2ddc2f79b0ec4a5fe9a163dad5d0b0119

Operating cash flow in Q2 2024 turned negative because of a combination of **higher working capital requirements** and a **significant decrease in accrued expenses**. Specifically, the company experienced a cash outflow due to increased working capital—driven largely by **$1.9 billion** in payments required by settlement agreements, which contributed to an overall increase of **$2.5 billion** in outflows compared to the previous period—and a sharp decline in accrued expenses (a decrease of **$1.933 billion** compared to an increase of **$261 million** previously). These factors together were the primary reasons for the negative operating cash flow in that quarter.  **[0000026172-24-000037_cmi-20240630.htm:53]** **[0000026172-24-000037_cmi-20240630.htm:41]** **[0000026172-24-000037_cmi-20240630.htm:3]** 

Why was Operating Cash Flow negative in Q2 2024?

The significant swing in Q2 2024 was primarily driven by **operating activities**, where higher working capital requirements and a **$1.9 billion settlement payment** resulted in a much larger cash outflow compared to Q2 2023. This was compounded by increased cash used in **investing activities** (mainly due to the Atmus divestiture) and notable changes in **financing activities**, which involved higher proceeds from borrowings and increased repayments. Additionally, there was a minor positive impact from **exchange rate changes** of **$53 million**.  **[0000026172-24-000037_cmi-20240630.htm:53]** 

What drove the large swing in cash change in Q2 2024?

The **Operating Cash Flow** dropped sharply in FY 2024 mainly due to **higher working capital requirements** that led to a **net cash outflow of $2.2 billion** compared to a **cash inflow of $2.4 billion** in FY 2023—resulting in a **$4.6 billion negative impact**. A significant part of this was due to **$1.9 billion of payments required by Settlement Agreements**. Although this was partially offset by a **higher net income of $3.2 billion** (which included a **$1.3 billion non-cash gain** on divestiture), the increased working capital needs were the primary driver for the decline in operating cash flow.  **[0000026172-25-000007_cmi-20241231.htm:71]** **[CMI_3414212_5]** 

Why did FY 2024 Operating Cash Flow drop so sharply compared to FY 2023?

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Cummins Inc.'s **Other Income, Net** was significantly high in Q1 2024 because of a **one-time gain of $1,333 million** related to the divestiture of **Atmus Filtration Technologies**, which brought the total to **$1,387 million** in that quarter.  **[0000026172-24-000023_cmi-20240331.htm:36]** **[0000026172-24-000019_cmi2024q18-kex99.htm:0]** 

Why was Other Income, Net so high in Q1 2024?

The turnaround in **Operating Income** for Q4 2024 was primarily driven by the absence of the **$2 billion regulatory settlement costs** that impacted Q4 2023, which significantly lifted the income performance.  **[0000026172-25-000003_cmi2024q48-kex99.htm:1]** **[0000026172-25-000003_cmi2024q48-kex99.htm:23]**  Additionally, **operational efficiency improvements**—including higher gross margins rising to **25.4%** from **23.7%** and lower selling, administrative, and research expenses—contributed to the upside.  **[CMI_3414212_4]**  Meanwhile, charges from the **Accelera Strategic Reorganization** (totalling **$312 million** in non-cash expenses aside from minimal severance costs) and the impact of the **Atmus Separation**, which eliminated associated costs despite lower sales, also played a role in the overall positive shift.  **[0000026172-25-000003_cmi2024q48-kex99.htm:1]** **[CMI_3414212_5]** **[CMI_3414212_4]** 

What caused the turnaround in Operating Income in Q4 2024?

The surge in **Consolidated Net Income** for Q1 2024 was driven primarily by a **one-time gain of $1.3 billion** from the Atmus Filtration Technologies divestiture, which was a major up-front boost. This gain was further complemented by a **lower effective tax rate of 8.7%**, improvements in **gross margin**, and minor restructuring expense adjustments compared to the previous year.  **[0000026172-24-000019_cmi2024q18-kex99.htm:0]** **[CMI_3382087_6]** **[0000026172-24-000023_cmi-20240331.htm:33]** 

What drove the surge in Consolidated Net Income in Q1 2024?

The nearly doubled Income Before Income Taxes in Q1 2024 was primarily driven by a **one-time gain of $1.3 billion** resulting from the **tax-free divestiture of Atmus**, which significantly boosted the **Other Income, Net** from **$90 million** in Q1 2023 to **$1,387 million** in Q1 2024, despite a slight decline in operating income.  **[0000026172-24-000023_cmi-20240331.htm:23]** **[0000026172-24-000023_cmi-20240331.htm:34]** **[0000026172-24-000019_cmi2024q18-kex99.htm:0]** **[0000026172-24-000023_cmi-20240331.htm:36]** **[CMI_3382087_6]** 

Why did Income Before Income Taxes nearly double in Q1 2024?

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In Q1 2024, a surge in cash and cash equivalents was driven by several factors. **Financing activities** played a significant role by contributing an additional **$862 million** compared to Q1 2023, largely due to higher borrowings from the note issuance, despite increased payments on commercial paper and other obligations. Additionally, while **operating activities** generated **$276 million** in cash — albeit lower than the prior period due to increased working capital needs and reduced operating income — and **investing activities** used more cash for acquisitions and the Atmus divestiture, these were offset by the strong financing performance. Small improvements due to **exchange rate fluctuations** also contributed to the overall increase, which resulted in a net cash rise of **$362 million**.  **[0000026172-24-000023_cmi-20240331.htm:42]** 

What factors contributed to the surge in Cash and cash equivalents in Q1 2024?

The spike in Q1 2024 long-term debt was driven primarily by **debt issuance** and **debt repayment** activities. Specifically, Cummins issued **$2.25 billion** in senior unsecured notes (including **$500 million** of 4.90% notes due in 2029, **$750 million** of 5.15% notes due in 2034, and **$1.0 billion** of 5.45% notes due in 2054), which brought in net proceeds of **$2.2 billion**. Additionally, the company repaid **$650 million** of its term loan during this period, leading to a net increase in its long-term debt.  **[0000026172-24-000023_cmi-20240331.htm:11]** 

What drove the spike in Long-term debt in Q1 2024?

The marked increase in treasury stock magnitude is primarily attributable to the tax-free exchange of shares related to the separation of Atmus Filtration Technologies, which reduced Cummins’ common shares outstanding by **5.6 million shares**, thereby increasing the value of treasury stock on the balance sheet.  **[0000026172-24-000019_cmi2024q18-kex99.htm:7]** **[CMI_3382087_2]** **[CMI_3382087_4]** 

What led to the marked increase in treasury stock magnitude in Q1 2024?

Other accrued expenses were significantly lower in Q2 2024 primarily because of a substantial reduction in the Settlement Agreements liability, which dropped from **$1,938 million** at the end of 2023 to **$20 million** by the end of Q2 2024. This reduction is attributed to a significant cash outflow associated with previously disclosed settlement agreements with regulatory agencies.  **[0000026172-24-000037_cmi-20240630.htm:13]** 

Why were Other accrued expenses so low in Q2 2024?

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Cummins Inc (CMI)

Financials