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目錄
美國
證券交易委員會
華盛頓特區20549 
cumminslogoa02.jpg
表格 10-Q
根據第13或15(d)條的季度報告
證券交易所法案(1934年)

截至季度末2024年9月30日
 
委員會文件號 1-4949
康明斯公司
(根據其章程規定的註冊人準確名稱)
印第安納州35-0257090
（擬定公司）  (IRS僱主識別號)
傑克遜街500號
郵政信箱3005
哥倫布, 印第安納州 47202-3005
，（主要行政辦公地址）
 
電話（812) 377-5000
(註冊人電話號碼，包括區號)

在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易標的在其上註冊的交易所的名稱
普通股，每股面值2.50美元CMI請使用moomoo賬號登錄查看New York Stock Exchange

請用複選標記表示註冊人是否：(1)已根據1934年證券交易所法第13或15(d)條的規定，提交了過去12個月內要求提交的所有報告（或者對於註冊人被要求提交此類報告的較短時期），以及(2)在過去90天內已受到此類提交要求的約束。是 x 不是☐
 
請打勾表示註冊者在過去12個月內（或者在註冊者需要提交此類文件的更短期限內）是否根據S-T法規第232.405條規定必須提交的每個互動數據文件。 是 x無☐
 
請用勾選標記指示註冊者是否爲大型快速提交申報者、加速提交申報者、非加速提交申報者、較小報告公司或新興增長公司。請查看《交易所法》第120億.2條中對「大型快速提交申報者」、「加速提交申報者」、「較小報告公司」和「新興增長公司」的定義。（選擇一個）：
大型加速存取器x加速文件提交人☐非加速文件提交人☐
較小的報告公司☐新興成長公司☐
 
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐

請勾選表示註冊者是否爲殼公司（如《交易所法》120億.2規定）。是 ☐ 無 x
 
截至2024年9月30日， 137,181,852 普通股的平均價值爲$2.50每股.

1
目錄
康明斯股份有限公司及其子公司
目錄
10-Q 表季度報告
 
  
  
 2024年和2023年截至9月30日三個和九個月內的壓縮合並淨利潤表
 截至2024年9月30日和2023年的三個和九個月的精簡綜合收入表
 2024年9月30日和2023年12月31日的彙總資產負債表
 2024年9月30日止九個月的精簡合併現金流量表和2023年
 2024年9月30日和2023年同期三個和九個月的可贖回非控股權益和權益的精簡合併變動報表
 
  
 



2
目錄
第一部分 財務信息 
第 1 項。簡明合併財務報表 

康明斯股份有限公司及其子公司
簡明綜合損益表
(未經審計)
截至三個月結束時截至九月底的九個月的營業租賃成本
 September 30,September 30,
金額以百萬爲單位，每股金額除外2024202320242023
淨銷售額 （注1和2）
$8,456 $8,431 $25,655 $25,522 
銷售成本6,285 6,360 19,250 19,274 
毛利率 2,171 2,071 6,405 6,248 
營業費用和收入     
銷售、一般及管理費用807 831 2,474 2,457 
研發和工程費用 359 376 1,107 1,110 
股權、特許權和投資收入（附註4）99 118 325 370 
其他經營支出，淨額54 32 131 78 
營業收入 1,050 950 3,018 2,973 
利息費用83 97 281 283 
其他收益，淨（附註14）76 25 1,504 166 
稅前利潤 1,043 878 4,241 2,856 
所得稅費用（附註5）200 188 618 623 
合併淨利潤 843 690 3,623 2,233 
淨利潤歸屬於非控制權益34 34 95 67 
歸屬康明斯公司的淨利潤 $809 $656 $3,528 $2,166 
 
歸屬康明斯公司的普通股每股收益    
基本$5.90 $4.63 $25.47 $15.29 
攤薄 $5.86 $4.59 $25.31 $15.19 
 
加權平均每股普通股數     
基本137.2 141.8 138.5 141.7 
股票激勵獎勵的稀釋效應 0.9 1.0 0.9 0.9 
攤薄 138.1 142.8 139.4 142.6 

(Shares In thousands)
3
目錄
康明斯股份有限公司及其子公司
綜合收益簡明合併報表
(未經審計)
 
截至三個月結束時截至九月底的九個月的營業租賃成本
 September 30,September 30,
以百萬爲單位2024202320242023
合併淨利潤 $843 $690 $3,623 $2,233 
其他全面收益（損失），稅後淨利潤（附註12）    
養老金和其他過度福利計劃的變動 5 3 5 (4)
外幣兌換調整165 (163)22 (191)
衍生工具未實現損失（收益） (7)19 2 28 
其他綜合收益（損失），淨率稅後 163 (141)29 (167)
綜合收益1,006 549 3,652 2,066 
扣除：歸屬於非控股權益的綜合收益 36 27 92 61 
屬於康明斯公司的綜合收益 $970 $522 $3,560 $2,005 
 
(Shares In thousands)
4
目錄
康明斯股份有限公司及其子公司
簡明合併資產負債表
(未經審計)
單位：百萬，除每股面值外September 30,
2024		12月31日
2023
資產  
流動資產  
現金及現金等價物 $1,733 $2,179 
可變現證券（附註6）518 562 
現金及現金等價物、市場可流通證券總計 2,251 2,741 
應收賬款及應收票據淨額 5,387 5,583 
存貨（注7）6,134 5,677 
預付賬款和其他流動資產 1,544 1,197 
總流動資產 15,316 15,198 
長期資產   
固定資產、設備和土地11,603 11,674 
累計折舊 (5,427)(5,425)
物業、廠房和設備，淨值6,176 6,249 
與權益法下投資者相關的投資和預付款項 1,922 1,800 
商譽2,412 2,499 
其他無形資產，淨額2,462 2,519 
養老金資產 (附註3)1,208 1,197 
其他資產 (附註8)2,556 2,543 
總資產 $32,052 $32,005 
負債  
流動負債  
應付賬款（主要爲交易） $4,206 $4,260 
應付貸款（附註9）441 280 
商業票據（附註9）1,636 1,496 
長期債務的流動部分（附註9）654 118 
應計的薪酬、福利和退休成本 1,011 1,108 
已計提產品保修的流動部分（附註10）685 667 
遞延收入的流動部分（附註2）1,225 1,220 
其他應計費用（附註8）1,745 3,754 
總流動負債 11,603 12,903 
長期負債   
長期負債（注9）4,856 4,802 
遞延營業收入（附註2）1,090 966 
其他負債（附註8）3,162 3,430 
總負債 $20,711 $22,101 
承諾和業務準備金（注11）
股東權益
康明斯股份的股東權益  
普通股，每股面值爲 $0.0001；2.50每股面值，500 222.5 和 222.5股份已發行
$2,612 $2,564 
未分配利潤 20,660 17,851 
截至2024年3月31日和2023年12月31日，公司的庫藏股票分別有2,279,784股和2,693,653股。85.4 和 80.7股票
(10,783)(9,359)
累計其他綜合收益虧損（附註12）(2,174)(2,206)
康明斯股份總股東權益 10,315 8,850 
非控制權益1,026 1,054 
總股本 $11,341 $9,904 
負債和股東權益合計$32,052 $32,005 
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
5
Table of Contents
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
 September 30,
In millions20242023
CASH FLOWS FROM OPERATING ACTIVITIES  
Consolidated net income $3,623 $2,233 
Adjustments to reconcile consolidated net income to net cash provided by operating activities   
Gain related to divestiture of Atmus (Note 14)(1,333)— 
Depreciation and amortization794 760 
Deferred income taxes(106)(238)
Equity in income of investees, net of dividends (74)(100)
Pension and OPEB expense (Note 3)28 4 
Pension contributions and OPEB payments (Note 3)(72)(115)
Changes in current assets and liabilities, net of acquisitions and divestiture  
Accounts and notes receivable 109 (447)
Inventories (726)(318)
Other current assets (370)(191)
Accounts payable 27 43 
Accrued expenses (Notes 1 and 11)(2,000)543 
Other, net 165 333 
Net cash provided by operating activities 65 2,507 
CASH FLOWS FROM INVESTING ACTIVITIES   
Capital expenditures (668)(694)
Acquisition of businesses, net of cash acquired (Note 15)(58)(127)
Investments in marketable securities—acquisitions (1,062)(976)
Investments in marketable securities—liquidations (Note 6)1,113 1,002 
Cash associated with Atmus divestiture (174)— 
Other, net (220)(65)
Net cash used in investing activities (1,069)(860)
CASH FLOWS FROM FINANCING ACTIVITIES   
Proceeds from borrowings 2,623 779 
Net borrowings (payments) of commercial paper 140 (566)
Payments on borrowings and finance lease obligations (1,386)(391)
Dividend payments on common stock(719)(683)
Payments for purchase of redeemable noncontrolling interests (Note 15)— (175)
Other, net (94)(33)
Net cash provided by (used in) financing activities 564 (1,069)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (6)(67)
Net (decrease) increase in cash and cash equivalents(446)511 
Cash and cash equivalents at beginning of year 2,179 2,101 
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,733 $2,612 
 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
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CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
(Unaudited)
 
Three months ended
In millions, except per share amountsRedeemable Noncontrolling InterestsCommon StockAdditional Paid-in CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal Cummins Inc. Shareholders’ EquityNoncontrolling InterestsTotal Equity
BALANCE AT JUNE 30, 2024$— $556 $2,026 $20,101 $(10,797)$(2,335)$9,551 $1,025 $10,576 
Net income 809 809 34 843 
Other comprehensive income, net of tax (Note 12)161 161 2 163 
Issuance of common stock 7 7 — 7 
Cash dividends on common stock, $1.82 per share
(250)(250)— (250)
Distributions to noncontrolling interests — (35)(35)
Share-based awards 2 13 15 — 15 
Other shareholder transactions 21 1 22 — 22 
BALANCE AT SEPTEMBER 30, 2024$— $556 $2,056 $20,660 $(10,783)$(2,174)$10,315 $1,026 $11,341 
BALANCE AT JUNE 30, 2023$— $556 $1,976 $19,102 $(9,380)$(1,917)$10,337 $1,019 $11,356 
Net income656 656 34 690 
Other comprehensive loss, net of tax (Note 12)(134)(134)(7)(141)
Issuance of common stock1 1 — 1 
Cash dividends on common stock, $1.68 per share
(238)(238)— (238)
Distributions to noncontrolling interests— (26)(26)
Share-based awards3 10 13 — 13 
Other shareholder transactions22 1 23 — 23 
BALANCE AT SEPTEMBER 30, 2023$— $556 $2,002 $19,520 $(9,369)$(2,051)$10,658 $1,020 $11,678 
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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Nine months ended
In millions, except per share amountsRedeemable Noncontrolling InterestsCommon
Stock		Additional
Paid-in
Capital		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Loss		Total
Cummins Inc.
Shareholders’
Equity		Noncontrolling
Interests		Total
Equity
BALANCE AT DECEMBER 31, 2023$— $556 $2,008 $17,851 $(9,359)$(2,206)$8,850 $1,054 $9,904 
Net income 3,528 3,528 95 3,623 
Other comprehensive loss, net of tax (Note 12)(29)(29)(3)(32)
Issuance of common stock 8 8 — 8 
Cash dividends on common stock, $5.18 per share
(719)(719)— (719)
Distributions to noncontrolling interests — (68)(68)
Share-based awards (6)106 100 — 100 
Divestiture of Atmus (Note 14)(1,532)61 (1,471)(19)(1,490)
Other shareholder transactions 46 2 48 (33)15 
BALANCE AT SEPTEMBER 30, 2024$— $556 $2,056 $20,660 $(10,783)$(2,174)$10,315 $1,026 $11,341 
BALANCE AT DECEMBER 31, 2022$258 $556 $1,687 $18,037 $(9,415)$(1,890)$8,975 $992 $9,967 
Net income (20)2,166 2,166 87 2,253 
Other comprehensive loss, net of tax (Note 12)(161)(161)(6)(167)
Issuance of common stock 3 3 — 3 
Cash dividends on common stock, $4.82 per share
(683)(683)— (683)
Distributions to noncontrolling interests — (50)(50)
Share-based awards (1)42 41 — 41 
Fair value adjustment of redeemable noncontrolling interests33 (33)(33)— (33)
Acquisition of redeemable noncontrolling interests (Note 15)(271)— — — 
Sale of Atmus stock (Note 14)285 285 (3)282 
Other shareholder transactions 61 4 65 — 65 
BALANCE AT SEPTEMBER 30, 2023$— $556 $2,002 $19,520 $(9,369)$(2,051)$10,658 $1,020 $11,678 

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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CUMMINS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Overview
Cummins Inc. (“Cummins,” “we,” “our” or “us”) was founded in 1919 as Cummins Engine Company, a corporation in Columbus, Indiana, and one of the first diesel engine manufacturers. In 2001, we changed our name to Cummins Inc. We are a global power solutions leader comprised of five business segments - Components, Engine, Distribution, Power Systems and Accelera - supported by our global manufacturing and extensive service and support network, skilled workforce and vast technical expertise. Our products range from advanced diesel, natural gas, electric and hybrid powertrains and powertrain-related components including aftertreatment, turbochargers, fuel systems, valvetrain technologies, controls systems, air handling systems, automated transmissions, axles, drivelines, brakes, suspension systems, electric power generation systems, batteries, electrified power systems, hydrogen production technologies and fuel cell products. We sell our products to original equipment manufacturers (OEMs), distributors, dealers and other customers worldwide. We serve our customers through a service network of approximately 450 wholly-owned, joint venture and independent distributor locations and more than 19,000 Cummins certified dealer locations in approximately 190 countries and territories.
Divestiture of Atmus
On March 18, 2024, we completed the divestiture of our remaining 80.5 percent ownership of Atmus Filtration Technologies Inc. (Atmus) common stock through a tax-free split-off. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
Settlement Agreements
In December 2023, we announced that we reached an agreement in principle with the U.S. Environmental Protection Agency (EPA), the California Air Resources Board (CARB), the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General's Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024 (collectively, the Settlement Agreements). In the second quarter of 2024, we made $1.9 billion of payments required by the Settlement Agreements. See NOTE 11, “COMMITMENTS AND CONTINGENCIES,” for additional information.
Interim Condensed Financial Statements
The unaudited Condensed Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows. All such adjustments are of a normal recurring nature. The Condensed Consolidated Financial Statements were prepared in accordance with accounting principles in the United States of America (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements were condensed or omitted as permitted by such rules and regulations.
These interim condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. Our interim period financial results for the three and nine month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all required annual disclosures.
Reclassifications
Certain amounts for prior year periods were reclassified to conform to the current year presentation.
Use of Estimates in Preparation of Financial Statements
Preparation of financial statements requires management to make estimates and assumptions that affect reported amounts presented and disclosed in our Condensed Consolidated Financial Statements. Significant estimates and assumptions in these Condensed Consolidated Financial Statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.
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Weighted-Average Diluted Shares Outstanding
The weighted-average diluted common shares outstanding exclude the anti-dilutive effect of certain stock options. The options excluded from diluted earnings per share were as follows:
 
Three months endedNine months ended
 September 30,September 30,
 2024202320242023
Options excluded767 7,267 1,878 8,770 
Related Party Transactions
In accordance with the provisions of various joint venture agreements, we may purchase products and components from our joint ventures, sell products and components to our joint ventures and our joint ventures may sell products and components to unrelated parties.
The following is a summary of sales to and purchases from nonconsolidated equity investees:
Three months ended Nine months ended
 September 30,September 30,
In millions2024202320242023
Sales to nonconsolidated equity investees$351 $315 $1,036 $1,011 
Purchases from nonconsolidated equity investees620 602 1,883 1,993 
The following is a summary of accounts receivable from and accounts payable to nonconsolidated equity investees:
In millionsSeptember 30,
2024		December 31,
2023		Balance Sheet Location
Accounts receivable from nonconsolidated equity investees$472 $530 Accounts and notes receivable, net
Accounts payable to nonconsolidated equity investees306 324 Accounts payable (principally trade)
Supply Chain Financing
We currently have supply chain financing programs with financial intermediaries, which provide certain vendors the option to be paid by financial intermediaries earlier than the due date on the applicable invoice. When a vendor utilizes the program and receives an early payment from a financial intermediary, they take a discount on the invoice. We then pay the financial intermediary the face amount of the invoice on the original due date, which generally have 60 to 90 day payment terms. The maximum amount that we could have outstanding under these programs was $551 million at September 30, 2024. We do not reimburse vendors for any costs they incur for participation in the program, their participation is completely voluntary and there are no assets pledged as security or other forms of guarantees provided for the committed payment to the finance provider or intermediary. As a result, all amounts owed to the financial intermediaries are presented as accounts payable in our Condensed Consolidated Balance Sheets. Amounts due to the financial intermediaries reflected in accounts payable at September 30, 2024, and December 31, 2023, were $154 million and $199 million, respectively.
Accounts Receivable Sales Program
In May 2024, we entered into an accounts receivable sales agreement with Wells Fargo Bank, N.A., to sell certain accounts receivable up to the Board of Directors (Board) approved limit of $500 million. We classify proceeds received from the sales of accounts receivable as an operating cash flow in the Condensed Consolidated Statements of Cash Flows, and we record the discount in other income, net in the Condensed Consolidated Statements of Net Income. There was no activity under the program during the nine months ended September 30, 2024.
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NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Long-term Contracts
We have certain arrangements, primarily long-term maintenance agreements, construction contracts, product sales with associated performance obligations extending beyond a year, product sales with lead times extending beyond one year that are non-cancellable or for which the customer incurs a penalty for cancellation and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for these contracts, excluding extended warranty coverage arrangements, as of September 30, 2024, was $3.8 billion. We expect to recognize the related revenue of $2.1 billion over the next 12 months and $1.7 billion over periods up to 10 years. See NOTE 10, "PRODUCT WARRANTY LIABILITY," for additional disclosures on extended warranty coverage arrangements. Our other contracts generally are for a duration of less than one year, include payment terms that correspond to the timing of costs incurred when providing goods and services to our customers or represent sales-based royalties.
Deferred and Unbilled Revenue
The following is a summary of our unbilled and deferred revenue and related activity:
In millionsSeptember 30,
2024		December 31,
2023
Unbilled revenue$346 $303 
Deferred revenue2,315 2,186 
We recognized revenue of $184 million and $682 million for the three and nine months ended September 30, 2024, compared with $126 million and $510 million for the comparable periods in 2023, that was included in the deferred revenue balance at the beginning of each year. We did not record any impairment losses on our unbilled revenues during the three and nine months ended September 30, 2024 or 2023.
Disaggregation of Revenue
Consolidated Revenue
The table below presents our consolidated net sales by geographic area based on the location of the customer:
Three months endedNine months ended
 September 30,September 30,
In millions2024202320242023
United States$4,825 $4,886 $14,729 $14,625 
China727 721 2,197 2,273 
India416 374 1,285 1,198 
Other international2,488 2,450 7,444 7,426 
Total net sales$8,456 $8,431 $25,655 $25,522 
Segment Revenue
As previous announced, beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment manager now monitors performance. We reorganized the businesses to combine the engine components and software and electronics businesses into the newly formed components and software business. In addition, we rebranded our axles and brakes business as drivetrain and braking systems. We began reporting results for these changes within our Components segment effective April 1, 2024, and reflected these changes in the historical periods presented. The change had no impact on our consolidated results.






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Components segment external sales by business were as follows:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
Drivetrain and braking systems$1,131 $1,177 $3,618 $3,698 
Emission solutions759 803 2,437 2,584 
Components and software249 289 828 913 
Automated transmissions148 187 475 545 
Atmus— 324 289 
(1)
1,007 
Total sales$2,287 $2,780 $7,647 $8,747 
 (1) Included sales through the March 18, 2024, divestiture. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
Engine segment external sales by market were as follows:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
Heavy-duty truck$781 $885 $2,560 $2,601 
Medium-duty truck and bus806 656 2,336 1,960 
Light-duty automotive400 451 1,292 1,336 
Total on-highway1,987 1,992 6,188 5,897 
Off-highway228 244 735 854 
Total sales$2,215 $2,236 $6,923 $6,751 
Distribution segment external sales by region were as follows:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
North America$1,947 $1,719 $5,568 $5,195 
Asia Pacific342 292 937 796 
Europe307 200 830 607 
China118 110 346 323 
Africa and Middle East80 77 194 219 
India77 66 223 186 
Latin America71 55 194 168 
Total sales$2,942 $2,519 $8,292 $7,494 
Distribution segment external sales by product line were as follows:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
Power generation$1,088 $601 $2,743 $1,701 
Parts1,000 991 2,985 3,054 
Service453 420 1,305 1,249 
Engines401 507 1,259 1,490 
Total sales$2,942 $2,519 $8,292 $7,494 
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Power Systems segment external sales by product line were as follows:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
Power generation$499 $420 $1,349 $1,247 
Industrial293 263 809 670 
Generator technologies120 115 350 354 
Total sales$912 $798 $2,508 $2,271 
NOTE 3. PENSIONS AND OTHER POSTRETIREMENT BENEFITS
We sponsor funded and unfunded domestic and foreign defined benefit pension and other postretirement benefit (OPEB) plans. Contributions to these plans were as follows:
Three months endedNine months ended
 September 30,September 30,
In millions2024202320242023
Defined benefit pension contributions$9 $8 $56 $102 
OPEB payments, net4 4 16 13 
Defined contribution pension plans27 29 101 102 
We anticipate making additional defined benefit pension contributions during the remainder of 2024 of $14 million for our U.S. and U.K. qualified and non-qualified pension plans. These contributions may be made from trusts or company funds either to increase pension assets or to make direct benefit payments to plan participants. We expect our 2024 annual net periodic pension cost to approximate $34 million.
The components of net periodic pension and OPEB expense (income) under our plans were as follows:
 Pension  
 U.S. PlansU.K. PlansOPEB
 Three months ended September 30,
In millions202420232024202320242023
Service cost$35 $29 $4 $4 $— $— 
Interest cost42 42 18 18 2 2 
Expected return on plan assets(72)(69)(26)(27)— — 
Amortization of prior service cost— — 1 1 — — 
Recognized net actuarial loss (gain)3 2 3 — (1)(1)
Net periodic benefit expense (income)$8 $4 $— $(4)$1 $1 
 Pension
 U.S. PlansU.K. PlansOPEB
 Nine months ended September 30,
In millions202420232024202320242023
Service cost$106 $87 $13 $12 $— $— 
Interest cost125 126 53 53 5 6 
Expected return on plan assets(217)(207)(76)(79)— — 
Amortization of prior service cost1 1 1 1 — — 
Recognized net actuarial loss (gain)10 6 9 — (2)(2)
Net periodic benefit expense (income)$25 $13 $— $(13)$3 $4 
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NOTE 4. EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES
Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Net Income for the reporting periods was as follows:
Three months endedNine months ended
 September 30,September 30,
In millions2024202320242023
Manufacturing entities
Chongqing Cummins Engine Company, Ltd.$15 $7 $51 $29 
Dongfeng Cummins Engine Company, Ltd.14 15 51 52 
Beijing Foton Cummins Engine Co., Ltd.6 8 29 33 
Tata Cummins, Ltd.6 6 22 21 
All other manufacturers7 18 41 69 
Distribution entities
Komatsu Cummins Chile, Ltda.15 13 42 40 
All other distributors3 3 10 10 
Cummins share of net income66 70 246 254 
Royalty and interest income33 48 79 116 
Equity, royalty and interest income from investees$99 $118 $325 $370 
In September 2023, our Accelera business signed an agreement to form a joint venture, Amplify Cell Technologies LLC, with Daimler Trucks and Buses US Holding LLC (Daimler Truck), PACCAR Inc. (PACCAR) and EVE Energy to accelerate and localize battery cell production and the battery supply chain in the U.S., including building a 21-gigawatt hour battery production facility in Marshall County, Mississippi. The joint venture will manufacture battery cells for electric commercial vehicles and industrial applications. The joint venture meets the definition of a variable interest entity since the equity-at-risk is not currently sufficient to support the future operations of the joint venture. Accelera, Daimler Truck and PACCAR will each own 30 percent of the joint venture and have two board positions, while EVE Energy will own 10 percent and have one board position. All significant decisions require majority or super-majority approval of the board. As a result, we are not the primary beneficiary of the joint venture, and the joint venture will not be consolidated. We will account for the joint venture using the equity method. Our maximum required contribution (the majority of which is expected to be contributed by 2028) to the joint venture is $830 million, which could be reduced by future government incentives received by the joint venture. As of September 30, 2024, we contributed $126 million. In addition, we are required to purchase 33 percent of the joint venture's output in the future or be subject to certain penalties. The joint venture received all government approvals and began operations in May 2024, but is not expected to begin production until 2027.
NOTE 5. INCOME TAXES
Our effective tax rates for the three and nine months ended September 30, 2024, were 19.2 percent and 14.6 percent, respectively. Our effective tax rates for the three and nine months ended September 30, 2023, were 21.4 percent and 21.8 percent, respectively.
The three months ended September 30, 2024, contained net favorable discrete tax items of $36 million, primarily due to $20 million of favorable adjustments from tax return amendments, $15 million of favorable return to provision adjustments and $2 million of favorable share-based compensation tax benefits, partially offset by $1 million of other unfavorable adjustments.
The nine months ended September 30, 2024, contained net favorable discrete tax items primarily due to the $1.3 billion non-taxable gain on the Atmus split-off. Other discrete tax items were net favorable by $66 million, primarily due to $21 million of favorable adjustments related to audit settlements, $20 million of favorable adjustments from tax return amendments, $18 million of favorable return to provision adjustments and $17 million of favorable share-based compensation tax benefits, partially offset by $7 million of unfavorable adjustments for uncertain tax positions and $3 million of other unfavorable adjustments.
The three months ended September 30, 2023, contained net favorable discrete tax items of $5 million, primarily due to $13 million of favorable return to provision adjustments and $1 million of favorable share-based compensation tax benefits, partially offset by $9 million of unfavorable adjustments for uncertain tax positions.
The nine months ended September 30, 2023, contained net favorable discrete tax items of $5 million, primarily due to $15 million of favorable return to provision adjustments and $5 million of favorable share-based compensation tax benefits, partially offset by $11 million of unfavorable adjustments for uncertain tax positions and $4 million of other unfavorable adjustments.
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NOTE 6. MARKETABLE SECURITIES
A summary of marketable securities, all of which were classified as current, was as follows:
 September 30,
2024		December 31,
2023
In millionsCost
Gross unrealized gains/(losses) (1)
Estimated
fair value		Cost
Gross unrealized gains/(losses) (1)
Estimated
fair value
Equity securities      
Level 1
Publicly-traded shares$7 $(5)$2 $— $— $— 
Level 2
Certificates of deposit260 — 260 246 — 246 
Debt mutual funds213 2 215 272 — 272 
Equity mutual funds17 9 26 22 6 28 
Debt securities15 — 15 16 — 16 
Marketable securities$512 $6 $518 $556 $6 $562 
(1) Unrealized gains and losses for debt securities are recorded in other comprehensive income while unrealized gains and losses for equity securities are recorded in our Condensed Consolidated Statements of Net Income.
The fair value of Level 1 securities is derived from the market price at the end of the period. The fair value of Level 2 securities is estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 securities, and there were no transfers between levels during the nine months ended September 30, 2024, or the year ended December 31, 2023. All debt securities are classified as available-for-sale.

A description of the valuation techniques and inputs used for our Level 2 fair value measures is as follows:
•Certificates of deposit — These investments provide us with a contractual rate of return and generally range in maturity from three months to five years. The counterparties to these investments are reputable financial institutions with investment grade credit ratings. Since these instruments are not tradable and must be settled directly by us with the respective financial institution, our fair value measure is the financial institution's month-end statement.
•Debt mutual funds — The fair value measures for the vast majority of these investments are the daily net asset values published on a regulated governmental website. Daily quoted prices are available from the issuing brokerage and are used on a test basis to corroborate this Level 2 input measure.
•Equity mutual funds — The fair value measures for these investments are the net asset values published by the issuing brokerage. Daily quoted prices are available from reputable third-party pricing services and are used on a test basis to corroborate this Level 2 input measure.
•Debt securities — The fair value measures for these securities are broker quotes received from reputable firms. These securities are infrequently traded on a national exchange and these values are used on a test basis to corroborate our Level 2 input measure.
The proceeds from sales and maturities of marketable securities were as follows:
Nine months ended
September 30,
In millions20242023
Proceeds from sales of marketable securities$1,008 $812 
Proceeds from maturities of marketable securities105 190 
Investments in marketable securities - liquidations$1,113 $1,002 
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NOTE 7. INVENTORIES
Inventories are stated at the lower of cost or net realizable value. Inventories included the following:
 
In millionsSeptember 30,
2024		December 31,
2023
Finished products$2,964 $2,770 
Work-in-process and raw materials3,391 3,156 
Inventories at FIFO cost6,355 5,926 
Excess of FIFO over LIFO(221)(249)
Inventories$6,134 $5,677 
NOTE 8. SUPPLEMENTAL BALANCE SHEET DATA
Other assets included the following:
In millionsSeptember 30,
2024		December 31,
2023
Deferred income taxes$1,073 $1,082 
Operating lease assets512 501 
Corporate owned life insurance446 417 
Other525 543 
Other assets$2,556 $2,543 
Other accrued expenses included the following:
In millionsSeptember 30,
2024		December 31,
2023
Marketing accruals$349 $399 
Income taxes payable266 242 
Other taxes payable217 296 
Current portion of operating lease liabilities133 138 
Settlement Agreements (1)
19 1,938 
Other761 741 
Other accrued expenses$1,745 $3,754 
(1) See NOTE 11, "COMMITMENTS AND CONTINGENCIES," for additional information.
Other liabilities included the following:
In millionsSeptember 30,
2024		December 31,
2023
Accrued product warranty (1)
$847 $777 
Pensions488 530 
Operating lease liabilities393 374 
Deferred income taxes386 530 
Accrued compensation187 213 
Other postretirement benefits120 131 
Mark-to-market valuation on interest rate derivatives81 117 
Long-term income taxes5 111 
Other655 647 
Other liabilities$3,162 $3,430 
(1) See NOTE 10, "PRODUCT WARRANTY LIABILITY," for additional information.
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NOTE 9. DEBT
Loans Payable and Commercial Paper
Loans payable, commercial paper and the related weighted-average interest rates were as follows:
In millionsSeptember 30,
2024		December 31,
2023
Loans payable (1)
$441 $280 
Commercial paper (2)
1,636 1,496 
(1) Loans payable consist primarily of notes payable to various international and domestic financial institutions. It is not practicable to aggregate these notes and calculate a quarterly weighted-average interest rate.
(2) The weighted-average interest rate, inclusive of all brokerage fees, was 5.25 percent and 5.43 percent at September 30, 2024, and December 31, 2023, respectively.
We can issue up to $4.0 billion of unsecured, short-term promissory notes (commercial paper) pursuant to the Board authorized commercial paper programs. These programs facilitate the private placement of unsecured short-term debt through third-party brokers. We intend to use the net proceeds from the commercial paper borrowings for general corporate purposes.
Revolving Credit Facilities
On June 3, 2024, we entered into an amended and restated five-year credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 3, 2029. The credit agreement amended and restated the prior $2.0 billion five-year credit agreement that would have matured on August 18, 2026.
On June 3, 2024, we entered into an amended and restated 364-day credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 2, 2025. This credit agreement amended and restated the prior $2.0 billion 364-day credit facility that matured on June 3, 2024.
Our committed credit facilities provide access up to $4.0 billion, including our $2.0 billion 364-day facility that expires June 2, 2025, and our $2.0 billion five-year facility that expires on June 3, 2029. We intend to maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities at or before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. There were no outstanding borrowings under these facilities at September 30, 2024, and December 31, 2023. At September 30, 2024, the $1.6 billion of outstanding commercial paper effectively reduced the $4.0 billion of revolving credit capacity to $2.4 billion.
At September 30, 2024, we also had an additional $527 million available for borrowings under our international and other domestic credit facilities.
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Long-term Debt
A summary of long-term debt was as follows:
In millionsInterest RateSeptember 30,
2024		December 31,
2023
Long-term debt  
Hydrogenics promissory notes, due 2024 and 2025—%$160 $160 
Term loan, due 2025 (1) (2)
Variable— 1,150 
Senior notes, due 2025 (3)
0.75%500 500 
Atmus term loan, due 2027 (4)
Variable— 600 
Debentures, due 20276.75%58 58 
Debentures, due 20287.125%250 250 
Senior notes, due 20294.90%500 — 
Senior notes, due 2030 (3)
1.50%850 850 
Senior notes, due 20345.15%750 — 
Senior notes, due 20434.875%500 500 
Senior notes, due 20502.60%650 650 
Senior notes, due 20545.45%1,000 — 
Debentures, due 2098 (5)
5.65%165 165 
Other debt165 94 
Unamortized discount and deferred issuance costs(92)(72)
Fair value adjustments due to hedge on indebtedness(70)(96)
Finance leases124 111 
Total long-term debt5,510 4,920 
Less: Current maturities of long-term debt654 118 
Long-term debt$4,856 $4,802 
(1) During the first nine months of 2024, we repaid the outstanding balance of the term loan.
(2) In 2023, we entered into a series of interest rate swaps in order to trade a portion of the floating rate debt into fixed rate. See "Interest Rate Risk" in NOTE 13, "DERIVATIVES," for additional information.
(3) In 2021, we entered into a series of interest rate swaps to effectively convert debt from a fixed rate to floating rate. See "Interest Rate Risk" in NOTE 13, "DERIVATIVES," for additional information.
(4) See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
(5) The effective interest rate is 7.48 percent.
On February 20, 2024, we issued $2.25 billion aggregate principal amount of senior unsecured notes consisting of $500 million aggregate principal amount of 4.90 percent senior unsecured notes due in 2029, $750 million aggregate principal amount of 5.15 percent senior unsecured notes due in 2034 and $1.0 billion aggregate principal amount of 5.45 percent senior unsecured notes due in 2054. We received net proceeds of $2.2 billion. The senior unsecured notes pay interest semi-annually on February 20 and August 20, commencing on August 20, 2024. The indenture governing the senior unsecured notes contains covenants that, among other matters, limit (i) our ability to consolidate or merge into, or sell, assign, convey, lease, transfer or otherwise dispose of all or substantially all of our and our subsidiaries' assets to another person, (ii) our and certain of our subsidiaries' ability to create or assume liens and (iii) our and certain of our subsidiaries' ability to engage in sale and leaseback transactions.
Principal payments required on long-term debt during the next five years are as follows:
In millions20242025202620272028
Principal payments$60 

$661 $66 $100 $290 
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Fair Value of Debt
Based on borrowing rates currently available to us for bank loans with similar terms and average maturities, considering our risk premium, the fair values and carrying values of total debt, including current maturities, were as follows:
 
In millionsSeptember 30,
2024		December 31,
2023
Fair value of total debt (1)
$7,426 $6,375 
Carrying value of total debt7,587 6,696 
(1) The fair value of debt is derived from Level 2 input measures.
NOTE 10. PRODUCT WARRANTY LIABILITY
A tabular reconciliation of the product warranty liability, including the deferred revenue related to our extended warranty coverage and accrued product campaigns, was as follows:
Nine months ended
September 30,
In millions20242023
Balance at beginning of year$2,497 $2,477 
Provision for base warranties issued490 458 
Deferred revenue on extended warranty contracts sold263 244 
Provision for product campaigns issued48 17 
Payments made during period(533)(429)
Amortization of deferred revenue on extended warranty contracts(222)(226)
Changes in estimates for pre-existing product warranties and campaigns94 19 
Foreign currency translation adjustments and other(7)(2)
Balance at end of period$2,630 $2,558 
We recognized supplier recoveries of $4 million and $38 million for the three and nine months ended September 30, 2024, compared with $7 million and $19 million for the comparable periods in 2023.
Warranty related deferred revenues and warranty liabilities on our Condensed Consolidated Balance Sheets were as follows:
In millionsSeptember 30,
2024		December 31,
2023		Balance Sheet Location
Deferred revenue related to extended coverage programs  
Current portion$287 $279 Current portion of deferred revenue
Long-term portion811 774 Deferred revenue
Total$1,098 $1,053  
Product warranty  
Current portion$685 $667 Current portion of accrued product warranty
Long-term portion847 777 Other liabilities
Total$1,532 $1,444  
Total warranty accrual$2,630 $2,497 
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NOTE 11. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
We are subject to numerous lawsuits and claims arising out of the ordinary course of our business, including actions related to product liability; personal injury; the use and performance of our products; warranty matters; product recalls; patent, trademark or other intellectual property infringement; contractual liability; the conduct of our business; tax reporting in foreign jurisdictions; distributor termination; workplace safety; environmental and regulatory matters, including the enforcement of environmental and emissions standards; and asbestos claims. We also have been identified as a potentially responsible party at multiple waste disposal sites under U.S. federal and related state environmental statutes and regulations and may have joint and several liability for any investigation and remediation costs incurred with respect to such sites. We have denied liability with respect to many of these lawsuits, claims and proceedings and are vigorously defending such lawsuits, claims and proceedings. We carry various forms of commercial, property and casualty, product liability and other forms of insurance; however, such insurance may not be applicable or adequate to cover the costs associated with a judgment against us with respect to these lawsuits, claims and proceedings. We do not believe that these lawsuits are material individually or in the aggregate. While we believe we have also established adequate accruals for our expected future liability with respect to pending lawsuits, claims and proceedings, where the nature and extent of any such liability can be reasonably estimated based upon then presently available information, there can be no assurance that the final resolution of any existing or future lawsuits, claims or proceedings will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
We conduct significant business operations in Brazil that are subject to the Brazilian federal, state and local labor, social security, tax and customs laws. While we believe we comply with such laws, they are complex, subject to varying interpretations and we are often engaged in litigation regarding the application of these laws to particular circumstances.
In December 2023, we announced that we reached an agreement in principle with the EPA, CARB, the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General’s Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024 (collectively, the Settlement Agreements). As part of the Settlement Agreements, among other things, we agreed to pay civil penalties, complete recall requirements, undertake mitigation projects, provide extended warranties, undertake certain testing, take certain corporate compliance measures and make other payments. Failure to comply with the terms and conditions of the Settlement Agreements subjects us to stipulated penalties. We recorded a charge of $2.0 billion in the fourth quarter of 2023 to resolve the matters addressed by the Settlement Agreements involving approximately one million of our pick-up truck applications in the U.S. This charge was in addition to the previously announced charges of $59 million for the recalls of model years 2013 through 2018 RAM 2500 and 3500 trucks and model years 2016 through 2019 Titan trucks. We made $1.9 billion of payments required by the Settlement Agreements in the second quarter of 2024. In the third quarter of 2024, we have accrued immaterial amounts related to stipulated penalties we determined to be probable and estimable. Any further non-compliance with the Settlement Agreements will likely subject us to further stipulated penalties and other adverse consequences.
We have also been in communication with other non-U.S. regulators regarding matters related to the emission systems in our engines and may also become subject to additional regulatory review in connection with these matters.
In connection with our announcement of our entry into the agreement in principle, we became subject to shareholder, consumer and third-party litigation regarding the matters covered by the Settlement Agreements, and we may become subject to additional litigation in connection with these matters.
The consequences resulting from the resolution of the foregoing matters are uncertain and the related expenses and reputational damage could have a material adverse impact on our results of operations, financial condition and cash flows.
Guarantees and Commitments
Periodically, we enter into guarantee arrangements, including guarantees of non-U.S. distributor financings, residual value guarantees on equipment under operating leases and other miscellaneous guarantees of joint ventures or third-party obligations. At September 30, 2024, the maximum potential loss related to these guarantees was $52 million.
We have arrangements with certain suppliers that require us to purchase minimum volumes or be subject to monetary penalties. At September 30, 2024, if we were to stop purchasing from each of these suppliers, the aggregate amount of the penalty would be approximately $533 million. These arrangements enable us to secure supplies of critical components and IT services. We do not currently anticipate paying any penalties under these contracts.
We enter into physical forward contracts with suppliers of platinum, palladium and iridium to purchase certain volumes of the commodities at contractually stated prices for various periods, which generally fall within two years. At September 30, 2024, the total commitments under these contracts were $31 million. These arrangements enable us to guarantee the prices of these commodities, which otherwise are subject to market volatility.
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We have guarantees with certain customers that require us to satisfactorily honor contractual or regulatory obligations, or compensate for monetary losses related to nonperformance. These performance bonds and other performance-related guarantees were $252 million at September 30, 2024.
Indemnifications
Periodically, we enter into various contractual arrangements where we agree to indemnify a third-party against certain types of losses. Common types of indemnities include:
•product liability and license, patent or trademark indemnifications;
•asset sale agreements where we agree to indemnify the purchaser against future environmental exposures related to the asset sold; and
•any contractual agreement where we agree to indemnify the counterparty for losses suffered as a result of a misrepresentation in the contract.
We regularly evaluate the probability of having to incur costs associated with these indemnities and accrue for expected losses that are probable. Because the indemnifications are not related to specified known liabilities and due to their uncertain nature, we are unable to estimate the maximum amount of the potential loss associated with these indemnifications.
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NOTE 12. ACCUMULATED OTHER COMPREHENSIVE LOSS
Following are the changes in accumulated other comprehensive income (loss) by component for the three months ended:
In millionsChange in pension and OPEB plansForeign currency
translation
adjustment		Unrealized gain
(loss) on
derivatives		Total
attributable to
Cummins Inc.		Noncontrolling
interests		Total
Balance at June 30, 2024$(848)$(1,595)$108 $(2,335)  
Other comprehensive income (loss) before reclassifications      
Before-tax amount1 142 (3)140 $2 $142 
Tax benefit— 21 1 22 — 22 
After-tax amount1 163 (2)162 2 164 
Amounts reclassified from accumulated other comprehensive income (loss) (1)
4 — (5)(1)— (1)
Net current period other comprehensive income (loss)5 163 (7)161 $2 $163 
Balance at September 30, 2024$(843)$(1,432)$101 $(2,174)  
Balance at June 30, 2023$(434)$(1,581)$98 $(1,917)  
Other comprehensive income (loss) before reclassifications      
Before-tax amount1 (154)34 (119)$(7)$(126)
Tax expense— (2)(9)(11)— (11)
After-tax amount1 (156)25 (130)(7)(137)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
2 — (6)(4)— (4)
Net current period other comprehensive income (loss)3 (156)19 (134)$(7)$(141)
Balance at September 30, 2023$(431)$(1,737)$117 $(2,051)  
(1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.

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Following are the changes in accumulated other comprehensive income (loss) by component for the nine months ended:
In millionsChange in pension and OPEB plansForeign currency
translation
adjustment		Unrealized
gain (loss) on
derivatives		Total
attributable to
Cummins Inc.		Noncontrolling
interests		Total
Balance at December 31, 2023$(848)$(1,457)$99 $(2,206)  
Other comprehensive income (loss) before reclassifications      
Before-tax amount(14)(56)23 (47)$(3)$(50)
Tax benefit (expense)3 20 (5)18 — 18 
After-tax amount(11)(36)18 (29)(3)(32)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
16 61 
(2)
(16)61 — 61 
Net current period other comprehensive (loss) income5 25 2 32 $(3)$29 
Balance at September 30, 2024$(843)$(1,432)$101 $(2,174)  
Balance at December 31, 2022$(427)$(1,552)$89 $(1,890)  
Other comprehensive income (loss) before reclassifications      
Before-tax amount(12)(190)49 (153)$(6)$(159)
Tax benefit (expense) 2 5 (10)(3)— (3)
After-tax amount(10)(185)39 (156)(6)(162)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
6 — (11)(5)— (5)
Net current period other comprehensive (loss) income(4)(185)28 (161)$(6)$(167)
Balance at September 30, 2023$(431)$(1,737)$117 $(2,051)  
(1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.
(2) Primarily related to the divestiture of Atmus. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.


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NOTE 13. DERIVATIVES
We are exposed to financial risk resulting from volatility in foreign exchange rates, interest rates and commodity prices. This risk is closely monitored and managed through the use of physical forward contracts (which are not considered derivatives) and financial derivative instruments including foreign currency forward contracts, commodity swap contracts and interest rate swaps. Financial derivatives are used expressly for hedging purposes and under no circumstances are they used for speculative purposes. When material, we adjust the estimated fair value of our derivative contracts for counterparty or our credit risk. None of our derivative instruments are subject to collateral requirements. Substantially all of our derivative contracts are subject to master netting arrangements, which provide us with the option to settle certain contracts on a net basis when they settle on the same day with the same currency. In addition, these arrangements provide for a net settlement of all contracts with a given counterparty in the event that the arrangement is terminated due to the occurrence of default or a termination event.
Foreign Currency Exchange Rate Risk
We had foreign currency forward contracts with notional amounts of $4.3 billion at September 30, 2024, with the following currencies comprising 84 percent of outstanding foreign currency forward contracts: British pound, Chinese renminbi, Australian dollar, Canadian dollar and Euro. We had foreign currency forward contracts with notional amounts of $4.5 billion at December 31, 2023, with the following currencies comprising 85 percent of outstanding foreign currency forward contracts: British pound, Chinese renminbi, Canadian dollar, Australian dollar and Swedish krona.
We are further exposed to foreign currency exchange risk as many of our subsidiaries are subject to fluctuations as the functional currencies of the underlying entities are not our U.S. dollar reporting currency. To help reduce volatility in the equity value of our subsidiaries, we enter into foreign exchange forwards designated as net investment hedges for certain of our investments. Under the current terms of our foreign exchange forwards, we agreed with third parties to sell British pounds, Chinese renminbi and Euros in exchange for U.S. dollar currency at a specified rate at the maturity of the contract. The notional amount of these hedges at September 30, 2024, was $1.6 billion.
The following table summarizes the net investment hedge activity in accumulated other comprehensive loss (AOCL):
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
Type of DerivativeGain (Loss) 
Recognized in AOCL		Gain (Loss) Reclassified from AOCL into EarningsGain (Loss) 
Recognized in AOCL		Gain (Loss) Reclassified from AOCL into EarningsGain (Loss) 
Recognized in AOCL		Gain (Loss) Reclassified from AOCL into EarningsGain (Loss) 
Recognized in AOCL		Gain (Loss) Reclassified from AOCL into Earnings
Foreign exchange forwards$(44)$— $22 $— $(41)$— $(6)$— 
Interest Rate Risk
In September 2023, we entered into a series of interest rate swaps with a total notional value of $500 million in order to trade a portion of the floating rate into a fixed rate on our term loan, due in 2025. The weighted-average interest rate of the interest rate swaps was 5.72 percent. We designated the swaps as cash flow hedges. The gains and losses on these derivative instruments are initially recorded in other comprehensive income and reclassified into earnings as interest expense in the Condensed Consolidated Financial Statements as each interest payment is accrued. We settled $400 million of interest rate swaps in the second quarter of 2024 and the remaining $100 million in the third quarter of 2024. The losses recognized on settlements were immaterial. The interest rate swap activity in AOCL was immaterial for the three and nine months ended September 30, 2023.
In 2021, we entered into a series of interest rate swaps to effectively convert our $500 million senior notes, due in 2025, from a fixed rate of 0.75 percent to a floating rate equal to the three-month London Interbank Offered Rate (LIBOR) plus a spread (subsequently adjusted to Secured Overnight Financing Rate (SOFR) under a fallback protocol in our derivative agreements in the third quarter of 2023), and $400 million of the notional amount remained unsettled at September 30, 2024. We also entered into a series of interest rate swaps to effectively convert $765 million of our $850 million senior notes, due in 2030, from a fixed rate of 1.50 percent to a floating rate equal to the three-month LIBOR plus a spread (also similarly adjusted to SOFR). We designated the swaps as fair value hedges. The gain or loss on these derivative instruments, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current income as interest expense. The net swap settlements that accrue each period are also reported in the Condensed Consolidated Financial Statements as interest expense.
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The following table summarizes the gains and losses:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
Type of SwapGain (Loss) 
on Swaps		Gain (Loss) on BorrowingsGain (Loss) 
on Swaps		Gain (Loss) on BorrowingsGain (Loss) 
on Swaps		Gain (Loss) on BorrowingsGain (Loss) 
on Swaps		Gain (Loss) on Borrowings
Interest rate swaps (1)
$38 $(35)$(17)$19 $31 $(27)$(10)$13 
(1) The difference between the gain (loss) on swaps and borrowings represents hedge ineffectiveness.
Derivatives Not Designated as Hedging Instruments
The following table summarizes the effect on our Condensed Consolidated Statements of Net Income for derivative instruments not designated as hedging instruments:
Three months endedNine months ended
September 30,September 30,
In millions2024202320242023
(Loss) gain recognized in income - Cost of sales (1)
$(2)$1 $(1)$(2)
Gain (loss) recognized in income - Other income (expense), net (1)
104 (60)60 (77)
(1) Includes foreign currency forward contracts.
Fair Value Amount and Location of Derivative Instruments
The following table summarizes the location and fair value of derivative instruments on our Condensed Consolidated Balance Sheets:
Derivatives Designated as Hedging InstrumentsDerivatives Not Designated as Hedging Instruments
In millionsSeptember 30,
2024		December 31,
2023		September 30,
2024		December 31,
2023
Notional amount$3,869 $2,997 $3,286 $3,610 
Derivative assets
Prepaid expenses and other current assets (1)
$21 $14 $56 $16 
Derivative liabilities
Other accrued expenses$32 $43 $16 $14 
Other liabilities86 117 — — 
Total derivative liabilities (1)
$118 $160 $16 $14 
(1) Estimates of the fair value of all derivative assets and liabilities above are derived from Level 2 inputs, which are estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 input measures and there were no transfers into or out of Level 2 or 3 during the nine months ended September 30, 2024, or the year ended December 31, 2023.
We elected to present our derivative contracts on a gross basis in our Condensed Consolidated Balance Sheets. Had we chosen to present on a net basis, we would have derivatives in a net asset position of $31 million and $4 million and derivatives in a net liability position of $88 million and $148 million at September 30, 2024, and December 31, 2023, respectively.
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NOTE 14. ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE
IPO
On May 23, 2023, in connection with the Atmus IPO, Cummins issued approximately $350 million of commercial paper with certain lenders. On May 26, 2023, Atmus shares began trading on the New York Stock Exchange under the symbol "ATMU." The IPO was completed on May 30, 2023, whereby Cummins exchanged 19.5 percent (approximately 16 million shares) of its ownership in Atmus, at $19.50 per share, to retire $299 million of the commercial paper as proceeds from the offering through a non-cash transaction.
In connection with the completion of the IPO, through a series of asset and equity contributions, we transferred the filtration business to Atmus. In exchange, Atmus transferred consideration of $650 million to Cummins, which consisted primarily of the net proceeds from a term loan facility and revolver executed by Atmus during May 2023. The commercial paper issued and retired through the IPO proceeds, coupled with the $650 million received, was used for the retirement of our historical debt and payment of dividends. The difference between the commercial paper retired from the IPO, other IPO related fees and the net book value of our divested interest was $285 million and recorded as an offset to additional paid-in capital. Of our consolidated cash and cash equivalents at December 31, 2023, $166 million was retained by Atmus for its working capital purposes.
Divestiture
On March 18, 2024, we completed the divestiture of our remaining 80.5 percent ownership of Atmus common stock through a tax-free split-off. The transaction involved the exchange of our shares in Atmus for shares of Cummins stock with a 7.0 percent discount on the exchange ratio for Atmus shares. The exchange ratio was determined based on each entity's respective stock price using the daily volume weighted-average stock price for three days preceding the final exchange offer date. Based on the final exchange ratio, we exchanged all 67 million of our Atmus shares for 5.6 million shares of Cummins stock, which was recorded as treasury stock based on the fair value of the Cummins shares obtained.
We evaluated the full divestiture of Atmus and determined the transaction did not qualify for discontinued operation presentation. We recognized a gain related to the divestiture of approximately $1.3 billion (based on the difference between the fair value of the Cummins shares obtained less the carrying value of our Atmus investment), which was recorded in other income, net in the Condensed Consolidated Statements of Net Income for the nine months ended September 30, 2024. Approximately $114 million of goodwill was included in the carrying value of the Atmus investment for purposes of calculating the gain. The operating results of Atmus were reported in the Condensed Consolidated Financial Statements through March 18, 2024, the date of divestiture.
As part of the divestiture, the $600 million term loan remained with Atmus after the split. In addition, a net $61 million of other comprehensive income and $19 million of noncontrolling interests related to Atmus were written-off and netted against the gain recognized upon the split.
We entered into a transitional services agreement (TSA) with Atmus that is designed to facilitate the orderly transfer of various services to Atmus. The TSA relates primarily to administrative services, which are generally to be provided over the next 24 months. This agreement is not material and does not confer upon us the ability to influence the operating and/or financial policies of Atmus subsequent to March 18, 2024.
NOTE 15. ACQUISITIONS
Acquisitions for the nine months ended September 30, 2024 and 2023, were as follows:
Entity Acquired (Dollars in millions)Date of AcquisitionAdditional Percent Interest AcquiredPayments to Former OwnersAcquisition Related Debt RetirementsTotal Purchase Consideration
Type of Acquisition(1)
Goodwill Acquired
Intangibles Recognized(2)
2024
Engendren Corporation02/16/24100%$65 $— $65 COMB$33 $8 
2023 (3)
Hydrogenics Corporation06/29/2319%$287 $48 $335 
(4)
EQUITY$— $— 
Teksid Hierro de Mexico, S.A. de C.V.04/03/23100%143— 143COMB18— 
(1) All results from acquired entities were included in segment results subsequent to the acquisition date. Previously consolidated entities were accounted for as equity transactions (EQUITY). Newly consolidated entities were accounted for as business combinations (COMB).
(2) Intangible assets acquired in the business combination were mostly customer and trade name related.
(4) Hydrogenics entered into three non-interest-bearing promissory notes with $175 million paid on July 31, 2023, and the remaining $160 million due in three installments through 2025.
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NOTE 16. OPERATING SEGMENTS
Operating segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is the Chief Executive Officer.
Our reportable operating segments consist of Components, Engine, Distribution, Power Systems and Accelera. This reporting structure is organized according to the products and markets each segment serves. The Components segment sells axles, drivelines, brakes and suspension systems for commercial diesel and natural gas applications, aftertreatment systems, turbochargers, fuel systems, valvetrain technologies, automated transmissions and electronics. The Engine segment produces engines (15 liters and smaller) and associated parts for sale to customers in on-highway and various off-highway markets. Our engines are used in trucks of all sizes, buses and recreational vehicles, as well as in various industrial applications, including construction, agriculture, power generation systems and other off-highway applications. The Distribution segment includes wholly-owned and partially-owned distributorships engaged in wholesaling engines, generator sets and service parts, as well as performing service and repair activities on our products and maintaining relationships with various OEMs throughout the world. The Power Systems segment is an integrated power provider, which designs, manufactures and sells engines (16 liters and larger) for industrial applications (including mining, oil and gas, marine and rail), standby and prime power generator sets, alternators and other power components. The Accelera segment designs, manufactures, sells and supports hydrogen production technologies as well as electrified power systems with innovative components and subsystems, including battery, fuel cell and electric powertrain technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of our electrolyzers for hydrogen production and electrified power systems and related components and subsystems. We continue to serve all our markets as they adopt electrification and alternative power technologies, meeting the needs of our OEM partners and end customers.
We use segment earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests (EBITDA) as the basis for the CODM to evaluate the performance of each of our reportable operating segments. We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. Segment amounts exclude certain expenses not specifically identifiable to segments.
The accounting policies of our operating segments are the same as those applied in our Condensed Consolidated Financial Statements. We prepared the financial results of our operating segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions. We allocate certain common costs and expenses, primarily corporate functions, among segments differently than we would for stand-alone financial information prepared in accordance with GAAP. These include certain costs and expenses of shared services, such as information technology, human resources, legal, finance and supply chain management. We do not allocate gains or losses of corporate owned life insurance and the gain and certain costs related to the divestiture of Atmus. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information. EBITDA may not be consistent with measures used by other companies.

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Summarized financial information regarding our reportable operating segments for the three and nine months ended September 30, 2024 and 2023 is shown in the table below:
In millionsComponentsEngineDistributionPower SystemsAcceleraTotal Segments
Three months ended September 30, 2024  
External sales$2,287 $2,215 $2,942 $912 $100 $8,456 
Intersegment sales437 698 10 775 10 1,930 
Total sales2,724 2,913 2,952 1,687 110 10,386 
Research, development and engineering expenses85 147 13 57 57 359 
Equity, royalty and interest income (loss) from investees12 53 25 20 (11)99 
Interest income4 2 7 1 — 14 
Segment EBITDA351 427 370 328 (115)1,361 
Depreciation and amortization (1)
121 62 31 33 16 263 
Three months ended September 30, 2023   
External sales$2,780 $2,236 $2,519 $798 $98 $8,431 
Intersegment sales456 695 16 646 5 1,818 
Total sales3,236 2,931 2,535 1,444 103 10,249 
Research, development and engineering expenses93 159 14 60 50 376 
Equity, royalty and interest income (loss) from investees26 62 22 11 (3)118 
Interest income8 4 9 3 — 24 
Segment EBITDA441 
(2)
395 306 234 (114)1,262 
Depreciation and amortization (1)
120 59 28 30 18 255 
Nine months ended September 30, 2024
External sales$7,647 $6,923 $8,292 $2,508 $285 $25,655 
Intersegment sales1,391 2,069 24 2,157 29 5,670 
Total sales9,038 8,992 8,316 4,665 314 31,325 
Research, development and engineering expenses250 468 41 180 166 1,105 
Equity, royalty and interest income (loss) from investees51 158 73 65 (22)325 
Interest income21 16 29 7 — 73 
Segment EBITDA1,230 
(2)
1,286 978 866 (333)4,027 
Depreciation and amortization (1)
367 181 92 99 45 784 
Nine months ended September 30, 2023
External sales$8,747 $6,751 $7,494 $2,271 $259 $25,522 
Intersegment sales1,471 2,154 42 1,973 14 5,654 
Total sales10,218 8,905 7,536 4,244 273 31,176 
Research, development and engineering expenses287 441 43 189 150 1,110 
Equity, royalty and interest income (loss) from investees71 198 70 42 (11)370 
Interest income21 14 24 7 1 67 
Segment EBITDA1,434 
(2)
1,277 940 654 (322)3,983 
Depreciation and amortization (1)
368 166 84 91 47 756 
(1) Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs was $10 million and $4 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. A portion of depreciation expense is included in research, development and engineering expenses.
(2) Included $21 million of costs associated with the divestiture of Atmus for the nine months ended September 30, 2024. Included $20 million and $50 million of costs associated with the divestiture of Atmus for the three and nine months ended September 30, 2023. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
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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 endedNine months ended
 September 30,September 30,
In millions2024202320242023
TOTAL SEGMENT EBITDA$1,361 $1,262 $4,027 $3,983 
Intersegment eliminations and other (1)
28 (32)
(2)
1,279 
(3)
(88)
(2)
Less:
Interest expense83 97 281 283 
Depreciation and amortization263 255 784 756 
INCOME BEFORE INCOME TAXES$1,043 $878 $4,241 $2,856 
(1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses.
(2) Included $6 million and $17 million of costs associated with the divestiture of Atmus for the three and nine months ended September 30, 2023.
(3) 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 nine months ended September 30, 2024. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
NOTE 17. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. The standard did not change the definition of a segment, the method for determining segments or the criteria for aggregating operating segments into reportable segments. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective adoption is required for all prior periods presented in the financial statements. We plan to adopt the standard beginning with our 2024 Form 10-K. The adoption is not expected to have a material impact to our financial statements or disclosures.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements in Income Tax Disclosures," to enhance the transparency and decision usefulness of income tax disclosures. This amendment requires public companies to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Additionally, under the amendment, entities are required to disclose the amount of income taxes paid disaggregated by federal, state and foreign taxes, as well as disaggregated by material individual jurisdictions. Finally, the amendment requires entities to disclose income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state and foreign. The new rules are effective for annual periods beginning after December 15, 2024. We will adopt this standard on a prospective basis as allowed by the standard beginning with our 2025 Form 10-K. The adoption of this standard is not expected to have a material impact on our Condensed Consolidated Financial Statements.
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ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cummins Inc. and its consolidated subsidiaries are hereinafter sometimes referred to as “Cummins,” “we,” “our” or “us.”
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
Certain parts of this quarterly report contain forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those that are based on current expectations, estimates and projections about the industries in which we operate and management’s beliefs and assumptions. Forward-looking statements are generally accompanied by words such as "anticipates," "expects," "forecasts," "intends," "plans," "believes," "seeks," "estimates," "could," "should," "may" or words of similar meaning. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which we refer to as "future factors," which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some future factors that could cause our results to differ materially from the results discussed in such forward-looking statements are discussed below and shareholders, potential investors and other readers are urged to consider these future factors carefully in evaluating forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Future factors that could affect the outcome of forward-looking statements include the following:
GOVERNMENT REGULATION
•any adverse consequences resulting from entering into the Settlement Agreements, including required additional mitigation projects, adverse reputational impacts and potential resulting legal actions;
•increased scrutiny from regulatory agencies, as well as unpredictability in the adoption, implementation and enforcement of emission standards around the world;
•evolving environmental and climate change legislation and regulatory initiatives;
•changes in international, national and regional trade laws, regulations and policies;
•changes in taxation;
•global legal and ethical compliance costs and risks;
•future bans or limitations on the use of diesel-powered products;
BUSINESS CONDITIONS / DISRUPTIONS
•failure to successfully integrate and / or failure to fully realize all of the anticipated benefits of the acquisition of Meritor, Inc.;
•raw material, transportation and labor price fluctuations and supply shortages;
•aligning our capacity and production with our demand;
•the actions of, and income from, joint ventures and other investees that we do not directly control;
•large truck manufacturers' and original equipment manufacturers' customers discontinuing outsourcing their engine supply needs or experiencing financial distress, or change in control;
PRODUCTS AND TECHNOLOGY
•product recalls;
•variability in material and commodity costs;
•the development of new technologies that reduce demand for our current products and services;
•lower than expected acceptance of new or existing products or services;
•product liability claims;
•our sales mix of products;
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GENERAL
•climate change, global warming, more stringent climate change regulations, accords, mitigation efforts, greenhouse gas regulations or other legislation designed to address climate change;
•our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions and divestitures and related uncertainties of entering such transactions;
•increasing interest rates;
•challenging markets for talent and ability to attract, develop and retain key personnel;
•exposure to potential security breaches or other disruptions to our information technology environment and data security;
•political, economic and other risks from operations in numerous countries including political, economic and social uncertainty and the evolving globalization of our business;
•competitor activity;
•increasing competition, including increased global competition among our customers in emerging markets;
•failure to meet environmental, social and governance (ESG) expectations or standards, or achieve our ESG goals;
•labor relations or work stoppages;
•foreign currency exchange rate changes;
•the performance of our pension plan assets and volatility of discount rates;
•the price and availability of energy;
•continued availability of financing, financial instruments and financial resources in the amounts, at the times and on the terms required to support our future business; and
•other risk factors described in Part II, Item 1A in this quarterly report and our 2023 Form 10-K, Part I, Item 1A, both under the caption "Risk Factors."
Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this quarterly report and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
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ORGANIZATION OF INFORMATION 
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) was prepared to provide the reader with a view and perspective of our business through the eyes of management and should be read in conjunction with our Management's Discussion and Analysis of Financial Condition and Results of Operations section of our 2023 Form 10-K. Our MD&A is presented in the following sections:
•EXECUTIVE SUMMARY AND FINANCIAL HIGHLIGHTS
•RESULTS OF OPERATIONS
•OPERATING SEGMENT RESULTS
•OUTLOOK
•LIQUIDITY AND CAPITAL RESOURCES
•APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
•RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
EXECUTIVE SUMMARY AND FINANCIAL HIGHLIGHTS
Overview
We are a global power solutions leader comprised of five business segments - Components, Engine, Distribution, Power Systems and Accelera - supported by our global manufacturing and extensive service and support network, skilled workforce and vast technical expertise. Our products range from advanced diesel, natural gas, electric and hybrid powertrains and powertrain-related components including aftertreatment, turbochargers, fuel systems, valvetrain technologies, controls systems, air handling systems, automated transmissions, axles, drivelines, brakes, suspension systems, electric power generation systems, batteries, electrified power systems, hydrogen production technologies and fuel cell products. We sell our products to original equipment manufacturers (OEMs), distributors, dealers and other customers worldwide. We have long-standing relationships with many of the leading manufacturers in the markets we serve, including PACCAR Inc, Traton Group, Daimler Trucks North America and Stellantis N.V. We serve our customers through a service network of approximately 450 wholly-owned, joint venture and independent distributor locations and more than 19,000 Cummins certified dealer locations in approximately 190 countries and territories.
Our segment reporting structure is organized according to the products and markets each segment serves. The Components segment sells axles, drivelines, brakes and suspension systems for commercial diesel and natural gas applications, aftertreatment systems, turbochargers, fuel systems, valvetrain technologies, automated transmissions and electronics. The Engine segment produces engines (15 liters and smaller) and associated parts for sale to customers in on-highway and various off-highway markets. Our engines are used in trucks of all sizes, buses and recreational vehicles, as well as in various industrial applications, including construction, agriculture, power generation systems and other off-highway applications. The Distribution segment includes wholly-owned and partially-owned distributorships engaged in wholesaling engines, generator sets and service parts, as well as performing service and repair activities on our products and maintaining relationships with various OEMs throughout the world. The Power Systems segment is an integrated power provider, which designs, manufactures and sells engines (16 liters and larger) for industrial applications (including mining, oil and gas, marine and rail), standby and prime power generator sets, alternators and other power components. The Accelera segment designs, manufactures, sells and supports hydrogen production technologies as well as electrified power systems with innovative components and subsystems, including battery, fuel cell and electric powertrain technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of our electrolyzers for hydrogen production and electrified power systems and related components and subsystems. We continue to serve all our markets as they adopt electrification and alternative power technologies, meeting the needs of our OEM partners and end customers.
Our financial performance depends, in large part, on varying conditions in the markets we serve, particularly the on-highway, off-highway, power generation and general industrial markets. Demand in these markets tends to fluctuate in response to overall economic conditions. Our sales may also be impacted by OEM inventory levels, production schedules, stoppages and supply chain challenges. Economic downturns in markets we serve generally result in reduced sales of our products and can result in price reductions in certain products and/or markets. As a worldwide business, our operations are also affected by geopolitical risks, currency fluctuations, political and economic uncertainty, public health crises (epidemics or pandemics) and regulatory matters, including adoption and enforcement of environmental and emission standards, in the countries we serve. As part of our growth strategy, we invest in businesses in certain countries that carry higher levels of these risks such as China, Brazil, India, Mexico and other countries in Europe, the Middle East and Africa. At the same time, our geographic diversity and broad product and service offerings have helped
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limit the impact from a drop in demand in any one industry, region, the economy of any single country or customer on our consolidated results.
Divestiture of Atmus
On March 18, 2024, we completed the divestiture of our remaining 80.5 percent ownership of Atmus Filtration Technologies Inc. (Atmus) common stock through a tax-free split-off. The exchange resulted in a reduction of shares of our common stock outstanding by 5.6 million shares and a gain of approximately $1.3 billion. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to the Condensed Consolidated Financial Statements for additional information.
Settlement Agreements

In December 2023, we announced that we reached an agreement in principle with the U.S. Environmental Protection Agency (EPA), the California Air Resources Board (CARB), the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General’s Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024 (collectively, the Settlement Agreements). In the second quarter of 2024, we made $1.9 billion of payments required by the Settlement Agreements. See NOTE 11, “COMMITMENTS AND CONTINGENCIES,” to our Condensed Consolidated Financial Statements for additional information.
2024 Third Quarter and Year-to-Date Results
A summary of our results is as follows:
Three months endedNine months ended
September 30,September 30,
In millions, except per share amounts202420232024
(1)
2023
Net sales$8,456 $8,431 $25,655 $25,522 
Net income attributable to Cummins Inc.809 656 3,528 2,166 
Earnings per common share attributable to Cummins Inc.
Basic$5.90 $4.63 $25.47 $15.29 
Diluted5.86 4.59 25.31 15.19 
(1) Net income and earnings per common share included the non-taxable gain associated with the divestiture of Atmus for the nine months ended September 30, 2024.
The table below presents our consolidated net sales by geographic area based on the location of the customer:
Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
United States and Canada$5,177 $5,210 $(33)(1)%$15,789 $15,612 $177 1 %
International3,279 3,221 58 2 %9,866 9,910 (44)— %
Total net sales$8,456 $8,431 $25 — %$25,655 $25,522 $133 1 %
Worldwide revenues were relatively flat in the three months ended September 30, 2024, compared to the same period in 2023, as increased power generation demand (primarily data center markets) was mostly offset by the divestiture of Atmus. International sales (excludes the U.S. and Canada) improved 2 percent primarily due to higher sales in India and Asia Pacific, partially offset by lower sales in Latin America. The increase in international sales was primarily due to higher demand for power generation products (especially in China and India), partially offset by the divestiture of Atmus. Net sales in the U.S. and Canada declined 1 percent primarily due to the divestiture of Atmus, partially offset by higher demand in power generation markets. Unfavorable foreign currency fluctuations impacted international sales by 2 percent (primarily the Brazilian real).
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Worldwide revenues increased by 1 percent in the nine months ended September 30, 2024, compared to the same period in 2023, due to increased power generation demand (mostly data center markets) and higher demand in North American medium-duty truck and bus markets, partially offset by the divestiture of Atmus, lower emission solutions demand (mainly in China) and weaker demand in global construction markets. Net sales in the U.S. and Canada improved 1 percent primarily due to higher demand in power generation markets and medium-duty truck and bus markets, partially offset by the divestiture of Atmus. International sales (excludes the U.S. and Canada) were relatively flat as lower sales in Europe and China were mostly offset with higher sales in Latin America and India. The decrease in international sales was primarily due to the divestiture of Atmus and lower emission solutions demand (mainly in China), largely offset by increased demand in power generation markets (mainly Europe, Asia Pacific, China and India). Unfavorable foreign currency fluctuations impacted international sales by 1 percent (primarily the Chinese renminbi, Brazilian real and Indian rupee).
The following tables contain sales and EBITDA (defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests) by operating segment for the three and nine months ended September 30, 2024 and 2023. See NOTE 16, "OPERATING SEGMENTS," to the Condensed Consolidated Financial Statements for additional information and a reconciliation of our segment information to the corresponding amounts in our Condensed Consolidated Statements of Net Income.
 Three months ended September 30,
Operating Segments20242023Percent change
 Percent  Percent 2024 vs. 2023
In millionsSalesof TotalEBITDASalesof TotalEBITDASalesEBITDA
Components$2,724 32 %$351 $3,236 38 %$441 (16)%(20)%
Engine2,913 35 %427 2,931 35 %395 (1)%8 %
Distribution2,952 35 %370 2,535 30 %306 16 %21 %
Power Systems1,687 20 %328 1,444 17 %234 17 %40 %
Accelera110 1 %(115)103 1 %(114)7 %(1)%
Intersegment eliminations(1,930)(23)%28 (1,818)(21)%(32)6 %NM
Total$8,456 100 %$1,389 $8,431 100 %$1,230 
(1)
— %13 %
"NM" - not meaningful information
(1) EBITDA included $26 million of costs associated with the IPO and divestiture of Atmus for the three months ended September 30, 2023.
Net income attributable to Cummins Inc. was $809 million, or $5.86 per diluted share, on sales of $8.5 billion for the three months ended September 30, 2024, versus the comparable prior year period net income attributable to Cummins Inc. of $656 million, or $4.59 per diluted share, on sales of $8.4 billion. The increases in net income attributable to Cummins Inc. and earnings per diluted share were driven by improved gross margin and favorable changes in corporate owned life insurance. The increase in gross margin was primarily due to favorable pricing and higher volumes, partially offset by the divestiture of Atmus and higher compensation expenses.
 Nine months ended September 30,
Operating Segments20242023Percent change
 Percent  Percent 2024 vs. 2023
In millionsSalesof TotalEBITDASalesof TotalEBITDASalesEBITDA
Components$9,038 35 %$1,230 $10,218 40 %$1,434 (12)%(14)%
Engine8,992 35 %1,286 8,905 35 %1,277 1 %1 %
Distribution8,316 33 %978 7,536 29 %940 10 %4 %
Power Systems4,665 18 %866 4,244 17 %654 10 %32 %
Accelera314 1 %(333)273 1 %(322)15 %(3)%
Intersegment eliminations(5,670)(22)%1,279 (5,654)(22)%(88)— %NM
Total$25,655 100 %$5,306 
(1)
$25,522 100 %$3,895 
(2)
1 %36 %
"NM" - not meaningful information
(1) EBITDA included a $1.3 billion gain recognized on the divestiture of Atmus and $35 million of costs associated with the divestiture of Atmus for the nine months ended September 30, 2024.
(2) EBITDA included $67 million of costs associated with the IPO and divestiture of Atmus for the nine months ended September 30, 2023.
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Net income attributable to Cummins Inc. was $3.5 billion, or $25.31 per diluted share, on sales of $25.7 billion for the nine months ended September 30, 2024, versus the comparable prior year period net income attributable to Cummins Inc. of $2.2 billion, or $15.19 per diluted share, on sales of $25.5 billion. The increases in net income attributable to Cummins Inc. and earnings per diluted share were driven by the gain recognized on the divestiture of Atmus. Diluted earnings per common share for the nine months ended September 30, 2024, benefited $0.71 from fewer weighted-average shares outstanding due to treasury shares reacquired in the Atmus divestiture.
2024 Highlights
We generated $65 million of cash from operations for the nine months ended September 30, 2024, compared to generating $2.5 billion for the comparable period in 2023. See the section titled "Cash Flows" in the "LIQUIDITY AND CAPITAL RESOURCES" section for a discussion of items impacting cash flows.
Our debt to capital ratio (total capital defined as debt plus equity) at September 30, 2024, was 40.1 percent, compared to 40.3 percent at December 31, 2023. The decrease was primarily due to the increased equity balance from strong earnings since December 31, 2023, partially offset by higher debt balances at September 30, 2024. At September 30, 2024, we had $2.3 billion in cash and marketable securities on hand and access to our $4.0 billion credit facilities (net of $1.6 billion of commercial paper outstanding), if necessary, to meet working capital, investment, acquisition and funding needs.
In July 2024, we settled the remaining $100 million of interest rate swaps and repaid the outstanding $100 million of our related term loan due in 2025. See NOTE 9, “DEBT,” and NOTE 13, "DERIVATIVES," to our Condensed Consolidated Financial Statements for additional information.
In July 2024, the Board of Directors (Board) authorized an increase to our quarterly dividend of approximately 8 percent from $1.68 per share to $1.82 per share.
On June 3, 2024, we entered into an amended and restated five-year credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 3, 2029. The credit agreement amended and restated the prior $2.0 billion five-year credit agreement that would have matured on August 18, 2026.
On June 3, 2024, we entered into an amended and restated 364-day credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 2, 2025. This credit agreement amended and restated the prior $2.0 billion 364-day credit facility that matured on June 3, 2024.
In May 2024, we entered into an accounts receivable sales agreement with Wells Fargo Bank, N.A., to sell certain accounts receivable up to $500 million. See NOTE 1, "NATURE OF OPERATIONS AND BASIS OF PRESENTATION," to our Condensed Consolidated Financial Statements for additional information.
In the second quarter of 2024, we made $1.9 billion of required payments towards the Settlement Agreements. See NOTE 11, “COMMITMENTS AND CONTINGENCIES,” to our Condensed Consolidated Financial Statements for additional information.
In the second quarter of 2024, we settled $400 million of interest rate swaps and paid $400 million of our related term loan due in 2025. See NOTE 9, “DEBT,” and NOTE 13, "DERIVATIVES," to our Condensed Consolidated Financial Statements for additional information.
On February 20, 2024, we issued $2.25 billion aggregate principal amount of senior unsecured notes consisting of $500 million aggregate principal amount of 4.90 percent senior unsecured notes due in 2029, $750 million aggregate principal amount of 5.15 percent senior unsecured notes due in 2034 and $1.0 billion aggregate principal amount of 5.45 percent senior unsecured notes due in 2054. We received net proceeds of $2.2 billion. See NOTE 9, "DEBT," to the Condensed Consolidated Financial Statements for additional information.
In the first nine months of 2024, the investment gain on our U.S. pension trusts was 6.3 percent, while our U.K. pension trusts' loss was 3.3 percent. We anticipate making additional defined benefit pension contributions during the remainder of 2024 of $14 million for our U.S. and U.K. qualified and non-qualified pension plans. We expect our 2024 annual net periodic pension cost to approximate $34 million.
As of the date of this filing, our credit ratings and outlooks from the credit rating agencies remain unchanged.
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RESULTS OF OPERATIONS
 Three months endedFavorable/Nine months endedFavorable/
September 30,(Unfavorable)September 30,(Unfavorable)
In millions, except per share amounts20242023AmountPercent20242023AmountPercent
NET SALES$8,456 $8,431 $25 — %$25,655 $25,522 $133 1 %
Cost of sales6,285 6,360 75 1 %19,250 19,274 24 — %
GROSS MARGIN2,171 2,071 100 5 %6,405 6,248 157 3 %
OPERATING EXPENSES AND INCOME      
Selling, general and administrative expenses807 831 24 3 %2,474 2,457 (17)(1)%
Research, development and engineering expenses359 376 17 5 %1,107 1,110 3 — %
Equity, royalty and interest income from investees99 118 (19)(16)%325 370 (45)(12)%
Other operating expense, net54 32 (22)(69)%131 78 (53)(68)%
OPERATING INCOME1,050 950 100 11 %3,018 2,973 45 2 %
Interest expense83 97 14 14 %281 283 2 1 %
Other income, net76 25 51 NM1,504 166 1,338 NM
INCOME BEFORE INCOME TAXES 1,043 878 165 19 %4,241 2,856 1,385 48 %
Income tax expense200 188 (12)(6)%618 623 5 1 %
CONSOLIDATED NET INCOME 843 690 153 22 %3,623 2,233 1,390 62 %
Less: Net income attributable to noncontrolling interests34 34 — — %95 67 (28)(42)%
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $809 $656 $153 23 %$3,528 $2,166 $1,362 63 %
Diluted Earnings Per Common Share Attributable to Cummins Inc.$5.86 $4.59 $1.27 28 %$25.31 $15.19 $10.12 67 %
"NM" - not meaningful information
 Three months endedFavorable/
(Unfavorable)		Nine months endedFavorable/
(Unfavorable)
 September 30,September 30,
Percent of sales20242023Percentage Points20242023Percentage Points
Gross margin25.7 %24.6 %1.1 25.0 %24.5 %0.5 
Selling, general and administrative expenses9.5 %9.9 %0.4 9.6 %9.6 %— 
Research, development and engineering expenses4.2 %4.5 %0.3 4.3 %4.3 %— 
Net Sales
Net sales for the three months ended September 30, 2024, increased by $25 million versus the comparable period in 2023. The primary drivers were as follows:
•Distribution segment sales increased 16 percent principally due to higher demand in power generation markets, especially in North America and Europe.
•Power Systems segment sales increased 17 percent primarily due to higher demand in power generation markets, especially in China and North America.
These increases were partially offset by the following:
•Components segment sales decreased 16 percent mainly due to the divestiture of Atmus on March 18, 2024.
•Engine segment sales decreased 1 percent largely due to lower demand in North American heavy-duty and light-duty automotive truck markets, partially offset by stronger demand in North American medium-duty truck and bus markets.
Net sales for the nine months ended September 30, 2024, increased $133 million versus the comparable period in 2023. The primary drivers were as follows:
•Distribution segment sales increased 10 percent principally due to higher demand in power generation markets, especially in North America and Europe.
•Power Systems segment sales increased 10 percent primarily due to higher demand in power generation markets, especially in North America and China.
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•Engine segment sales increased 1 percent largely due to stronger demand in North American medium-duty truck markets, partially offset by lower demand in global construction markets and North American heavy-duty and light-duty automotive truck markets.
These increases were partially offset by decreased Components segment sales of 12 percent mainly due to the divestiture of Atmus on March 18, 2024.
Sales to international markets (excludes the U.S. and Canada), based on location of customers, for the three and nine months ended September 30, 2024, were 39 percent and 38 percent of total net sales compared with 38 percent and 39 percent of total net sales for the comparable periods in 2023. A more detailed discussion of sales by segment is presented in the “OPERATING SEGMENT RESULTS” section.
Cost of Sales
The types of expenses included in cost of sales are the following: parts and material consumption, including direct and indirect materials; compensation and related expenses, including variable compensation, salaries and fringe benefits; depreciation on production equipment and facilities and amortization of technology intangibles; estimated costs of warranty programs and campaigns; production utilities; production-related purchasing; warehousing, including receiving and inspection; freight costs; engineering support costs; repairs and maintenance; production and warehousing facility property insurance and rent for production facilities and other production overhead.
Gross Margin
Gross margin increased $100 million for the three months ended September 30, 2024, and increased 1.1 points as a percentage of net sales versus the comparable period in 2023. The increases in gross margin and gross margin as a percentage of sales were primarily due to favorable pricing and higher volumes, partially offset by the divestiture of Atmus and higher compensation expenses. Compensation and related expenses included salaries, fringe benefits and variable compensation.
Gross margin increased $157 million for the nine months ended September 30, 2024, and increased 0.5 points as a percentage of sales versus the comparable period in 2023. The increases in gross margin and gross margin as a percentage of sales were primarily due to favorable pricing, lower material costs and higher volumes, partially offset by higher compensation expenses, the divestiture of Atmus and increased product coverage.
The provision for base warranties issued as a percent of sales for the three and nine months ended September 30, 2024, was 1.9 percent and 1.9 percent, respectively, compared to 1.9 percent and 1.8 percent for the comparable periods in 2023.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $24 million for the three months ended September 30, 2024, versus the comparable period in 2023, primarily due to lower consulting expenses. Selling, general and administrative expenses increased $17 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to higher compensation expenses. Compensation and related expenses included salaries, fringe benefits and variable compensation.
Research, Development and Engineering Expenses
Research, development and engineering expenses decreased $17 million for the three months ended September 30, 2024, versus the comparable period in 2023, primarily due to lower spending on prototypes and external testing and decreased compensation expenses, partially offset by lower expense recoveries. Research, development and engineering expenses decreased $3 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to lower spending on external testing. Compensation and related expenses included salaries, fringe benefits and variable compensation.
Research activities continue to focus on development of new products and improvements of current technologies to meet future emission standards around the world, improvements in fuel economy performance of diesel and natural gas-powered engines and related components, as well as development activities around hydrogen engine solutions, battery electric, fuel cell electric and hydrogen production technologies.
Equity, Royalty and Interest Income from Investees
Equity, royalty and interest income from investees decreased $19 million for the three months ended September 30, 2024, versus the comparable period in 2023, primarily due to lower royalty and interest income from investees and start-up costs at Amplify Cell Technologies LLC, partially offset by higher earnings at Chongqing Cummins Engine Co., Ltd. See NOTE 4, "EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES," to the Condensed Consolidated Financial Statements for additional information.
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Equity, royalty and interest income from investees decreased $45 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to lower royalty and interest income from investees, the absence of earnings from joint ventures associated with the divestiture of Atmus Filtration Technologies Inc. and start-up costs at Amplify Cell Technologies LLC, partially offset by higher earnings at Chongqing Cummins Engine Co., Ltd.
Other Operating Expense, Net
Other operating expense, net was as follows:
Three months endedNine months ended
 September 30,September 30,
In millions2024202320242023
Amortization of intangible assets$(32)$(34)

$(97)$(100)
Flood damage expenses(10)— (10)— 
Loss on write-off of assets(2)(1)(15)(3)
Royalty income, net2 1 7 12 
Other, net(12)2 (16)13 
Total other operating expense, net$(54)$(32)$(131)$(78)
Interest Expense
Interest expense was $83 million and $281 million for the three and nine months ended September 30, 2024, versus $97 million and $283 million for the comparable periods in 2023. Interest expense decreased $14 million for the three months ended September 30, 2024, primarily due to lower weighted-average interest rates on borrowings. Interest expense decreased $2 million for the nine months ended September 30, 2024, primarily due to lower average debt balances, partially offset by higher weighted-average interest rates.
Other Income, Net
Other income, net was as follows:
Three months ended Nine months ended
 September 30,September 30,
In millions2024202320242023
Non-service pension and OPEB income$30 $32 $82 $94 
Gain (loss) on corporate owned life insurance29 (28)30 (8)
Interest income14 24 73 67 
Gain on sale of marketable securities, net6 — 10 8 
Gain related to divestiture of Atmus (1)
— — 1,333 — 
Foreign currency loss, net(10)(5)(33)(4)
Other, net7 2 9 9 
Total other income, net $76 $25 $1,504 $166 
(1) See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Condensed Consolidated Financial Statements for additional information.
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Income Tax Expense
Our effective tax rate for 2024, excluding discrete items, is expected to approximate 23.5 percent.
Our effective tax rates for the three and nine months ended September 30, 2024, were 19.2 percent and 14.6 percent, respectively. Our effective tax rates for the three and nine months ended September 30, 2023, were 21.4 percent and 21.8 percent, respectively.
The three months ended September 30, 2024, contained net favorable discrete tax items of $36 million, primarily due to $20 million of favorable adjustments from tax return amendments, $15 million of favorable return to provision adjustments and $2 million of favorable share-based compensation tax benefits, partially offset by $1 million of other unfavorable adjustments.
The nine months ended September 30, 2024, contained net favorable discrete tax items primarily due to the $1.3 billion non-taxable gain on the Atmus split-off. Other discrete tax items were net favorable by $66 million, primarily due to $21 million of favorable adjustments related to audit settlements, $20 million of favorable adjustments from tax return amendments, $18 million of favorable return to provision adjustments and $17 million of favorable share-based compensation tax benefits, partially offset by $7 million of unfavorable adjustments for uncertain tax positions and $3 million of other unfavorable adjustments.
The three months ended September 30, 2023, contained net favorable discrete tax items of $5 million, primarily due to $13 million of favorable return to provision adjustments and $1 million of favorable share-based compensation tax benefits, partially offset by $9 million of unfavorable adjustments for uncertain tax positions.
The nine months ended September 30, 2023, contained net favorable discrete tax items of $5 million, primarily due to $15 million of favorable return to provision adjustments and $5 million of favorable share-based compensation tax benefits, partially offset by $11 million of unfavorable adjustments for uncertain tax positions and $4 million of other unfavorable adjustments.
Noncontrolling Interests
Noncontrolling interests eliminate the income or loss attributable to non-Cummins ownership interests in our consolidated entities. Noncontrolling interests in income of consolidated subsidiaries for the three and nine months ended September 30, 2024, was flat and increased $28 million versus the comparable periods in 2023. For the three months ended September 30, 2024, higher earnings at Cummins India Limited were offset by the divestiture of Atmus. The increase for the nine months ended September 30, 2024, was primarily due to higher earnings at Cummins India Limited and the absence of losses at Hydrogenics Corporation resulting from the June 2023 acquisition, partially offset by lower earnings at Eaton Cummins Joint Venture and the divestiture of Atmus.
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Comprehensive Income - Foreign Currency Translation Adjustment
The foreign currency translation adjustment was a net gain of $165 million and $22 million, for the three and nine months ended September 30, 2024, respectively, compared to a net loss of $163 million and $191 million, for the three and nine months ended September 30, 2023, respectively, driven by the following:
Three months ended
September 30,
20242023
In millionsTranslation adjustmentPrimary currency driver vs. U.S. dollarTranslation adjustmentPrimary currency driver vs. U.S. dollar
Wholly-owned subsidiaries$134 Chinese renminbi, Euro$(142)British pound, Brazilian real, Chinese renminbi, Indian rupee
Equity method investments29 Chinese renminbi(14)Chinese renminbi, Indian rupee, Brazilian real
Consolidated subsidiaries with a noncontrolling interest2 Chinese renminbi(7)Indian rupee, Chinese renminbi
Total$165 $(163)
Nine months ended
September 30,
20242023
In millionsTranslation adjustmentPrimary currency driver vs. U.S. dollarTranslation adjustmentPrimary currency driver vs. U.S. dollar
Wholly-owned subsidiaries$11 British pound, Euro, partially offset by Brazilian real$(141)Chinese renminbi, partially offset by Brazilian real
Equity method investments14 Indian rupee(44)Chinese renminbi, partially offset by Brazilian real
Consolidated subsidiaries with a noncontrolling interest(3)Indian rupee(6)Chinese renminbi, Indian rupee
Total$22 $(191)
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OPERATING SEGMENT RESULTS
Our reportable operating segments consist of the Components, Engine, Distribution, Power Systems and Accelera segments. This reporting structure is organized according to the products and markets each segment serves. We use segment EBITDA as the basis for the Chief Operating Decision Maker to evaluate the performance of each of our reportable operating segments. We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. Segment amounts exclude certain expenses not specifically identifiable to segments. See NOTE 16, "OPERATING SEGMENTS," to the Condensed Consolidated Financial Statements for additional information and a reconciliation of our segment information to the corresponding amounts in our Condensed Consolidated Statements of Net Income.
Following is a discussion of results for each of our operating segments.
Components Segment Results
Financial data for the Components segment was as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
External sales$2,287$2,780$(493)(18)%$7,647$8,747$(1,100)(13)%
Intersegment sales437456(19)(4)%1,3911,471(80)(5)%
Total sales2,7243,236(512)(16)%9,03810,218(1,180)(12)%
Research, development and engineering expenses85938 9 %25028737 13 %
Equity, royalty and interest income from investees1226(14)(54)%5171(20)(28)%
Interest income48(4)(50)%2121— — %
Segment EBITDA(1)
351441(90)(20)%1,2301,434(204)(14)%
   Percentage Points  Percentage Points
Segment EBITDA as a percentage of total sales12.9 %13.6 % (0.7)13.6 %14.0 % (0.4)
(1) Included $21 million of costs associated with the divestiture of Atmus for the nine months ended September 30, 2024. Included $20 million and $50 million of costs associated with the divestiture of Atmus for the three and nine months ended September 30, 2023, respectively.
On March 18, 2024, we completed the divestiture of our remaining 80.5 percent ownership of Atmus common stock through a tax-free split-off. See NOTE 14, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to the Condensed Consolidated Financial Statements for additional information.
As previous announced, beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment manager now monitors performance. We reorganized the businesses to combine the engine components and software and electronics businesses into the newly formed components and software business. In addition, we rebranded our axles and brakes business as drivetrain and braking systems. We began reporting results for these changes within our Components segment effective April 1, 2024, and reflected these changes in the historical periods presented. The change had no impact on our consolidated results.
Sales for our Components segment by business were as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
Drivetrain and braking systems$1,131 $1,177 $(46)(4)%$3,619 $3,698 $(79)(2)%
Emission solutions864 893 (29)(3)%2,776 2,913 (137)(5)%
Components and software581 583 (2)— %1,815 1,832 (17)(1)%
Automated transmissions148 187 (39)(21)%475 545 (70)(13)%
Atmus— 396 (396)(100)%353 
(1)
1,230 (877)(71)%
Total sales$2,724 $3,236 $(512)(16)%$9,038 $10,218 $(1,180)(12)%
 (1) Included sales through the March 18, 2024, divestiture.
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Sales
Components segment sales for the three months ended September 30, 2024, decreased $512 million versus the comparable period in 2023. The following were the primary drivers by business:
•Sales decreased $396 million due to the Atmus divestiture on March 18, 2024.
•Drivetrain and braking systems decreased $46 million primarily due to lower demand in North American heavy-duty truck markets.
Components segment sales for the nine months ended September 30, 2024, decreased $1.2 billion versus the comparable period in 2023. The following were the primary drivers by business:
•Sales decreased $877 million due to the Atmus divestiture on March 18, 2024.
•Emission solutions sales decreased $137 million principally due to lower demand in China.
Segment EBITDA
Components segment EBITDA for the three months ended September 30, 2024, decreased $90 million versus the comparable period in 2023, mainly due to the divestiture of Atmus and lower volumes.
Components segment EBITDA for the nine months ended September 30, 2024, decreased $204 million versus the comparable period in 2023, primarily due to the divestiture of Atmus, increased product coverage costs and higher compensation expenses, partially offset by lower material costs.
Engine Segment Results
Financial data for the Engine segment was as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
External sales$2,215$2,236$(21)(1)%$6,923$6,751$172 3 %
Intersegment sales6986953 — %2,0692,154(85)(4)%
Total sales2,9132,931(18)(1)%8,9928,90587 1 %
Research, development and engineering expenses14715912 8 %468441(27)(6)%
Equity, royalty and interest income from investees5362(9)(15)%158198(40)(20)%
Interest income24(2)(50)%16142 14 %
Segment EBITDA42739532 8 %1,2861,2779 1 %
   Percentage Points  Percentage Points
Segment EBITDA as a percentage of total sales14.7 %13.5 % 1.2 14.3 %14.3 % — 
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Sales for our Engine segment by market were as follows:
 Three months endedFavorable/Nine months endedFavorable/
September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
Heavy-duty truck$1,021$1,116$(95)(9)%$3,264$3,347$(83)(2)%
Medium-duty truck and bus1,073931142 15 %3,1422,776366 13 %
Light-duty automotive395455(60)(13)%1,2941,339(45)(3)%
Total on-highway2,4892,502(13)(1)%7,7007,462238 3 %
Off-highway424429(5)(1)%1,2921,443(151)(10)%
Total sales$2,913$2,931$(18)(1)%$8,992$8,905$87 1 %
  Percentage Points  Percentage Points
On-highway sales as percentage of total sales85 %85 % — 86 %84 % 2 
Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
 20242023AmountPercent20242023AmountPercent
Heavy-duty32,400 36,300 (3,900)(11)%103,500 107,400 (3,900)(4)%
Medium-duty79,200 71,300 7,900 11 %234,600 226,200 8,400 4 %
Light-duty41,400 53,300 (11,900)(22)%153,400 161,900 (8,500)(5)%
Total unit shipments153,000 160,900 (7,900)(5)%491,500 495,500 (4,000)(1)%
Sales
Engine segment sales for the three months ended September 30, 2024, decreased $18 million versus the comparable period in 2023. The following were the primary drivers by market:
•Heavy-duty truck sales decreased $95 million mainly due to weaker demand in North America with shipments down 16 percent.
•Light-duty automotive sales decreased $60 million primarily due to lower demand in North America with shipments down 31 percent, partially offset by a customer agreement providing for a price adjustment for certain units sold beginning January 1, 2024, and recorded in the third quarter.
These decreases were partially offset by increased medium-duty truck and bus sales of $142 million primarily in the North American truck market with shipments up 14 percent.
Engine segment sales for the nine months ended September 30, 2024, increased $87 million versus the comparable period in 2023. The primary driver by market was an increase in medium-duty truck and bus sales of $366 million principally due to higher medium-duty truck demand, especially in North America with shipments up 15 percent, and favorable pricing.
The increase was partially offset by the following:
•Off-highway sales decreased $151 million mainly due to lower demand in global construction markets, especially in China and Western Europe.
•Heavy-duty truck sales decreased $83 million primarily due to weaker demand in North America with shipments down 7 percent.
•Light-duty automotive sales decreased $45 million principally due to lower demand in North America with shipments down 9 percent, partially offset by a customer agreement providing for a price adjustment for certain units sold beginning January 1, 2024 and recorded in the third quarter.
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Segment EBITDA
Engine segment EBITDA for the three months ended September 30, 2024, increased $32 million versus the comparable period in 2023, primarily due to favorable pricing, partially offset by lower volumes, increased product coverage costs, higher compensation expenses and lower equity, royalty and interest income from investees.
Engine segment EBITDA for the nine months ended September 30, 2024, increased $9 million versus the comparable period in 2023, primarily due to favorable pricing and lower material costs, partially offset by higher compensation expenses, lower volumes, increased product coverage, higher managed expenses, lower equity, royalty and interest income from investees and unfavorable mix.
Distribution Segment Results
Financial data for the Distribution segment was as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
External sales$2,942$2,519$423 17 %$8,292$7,494$798 11 %
Intersegment sales1016(6)(38)%2442(18)(43)%
Total sales2,9522,535417 16 %8,3167,536780 10 %
Research, development and engineering expenses13141 7 %41432 5 %
Equity, royalty and interest income from investees25223 14 %73703 4 %
Interest income79(2)(22)%29245 21 %
Segment EBITDA37030664 21 %97894038 4 %
   Percentage Points  Percentage Points
Segment EBITDA as a percentage of total sales12.5 %12.1 % 0.4 11.8 %12.5 % (0.7)
Sales for our Distribution segment by region were as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
North America$1,950 $1,731 $219 13 %$5,574 $5,223 $351 7 %
Asia Pacific343 292 51 17 %938 798 140 18 %
Europe310 200 110 55 %835 608 227 37 %
China120 112 8 7 %352 327 25 8 %
Africa and Middle East80 77 3 4 %194 219 (25)(11)%
India78 68 10 15 %228 192 36 19 %
Latin America71 55 16 29 %195 169 26 15 %
Total sales$2,952 $2,535 $417 16 %$8,316 $7,536 $780 10 %
Sales for our Distribution segment by product line were as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
Power generation$1,091 $606 $485 80 %$2,752 $1,712 $1,040 61 %
Parts1,004 995 9 1 %2,995 3,071 (76)(2)%
Service455 423 32 8 %1,309 1,255 54 4 %
Engines402 511 (109)(21)%1,260 1,498 (238)(16)%
Total sales$2,952 $2,535 $417 16 %$8,316 $7,536 $780 10 %
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Sales
Distribution segment sales for the three months ended September 30, 2024, increased $417 million versus the comparable period in 2023. The following were the primary drivers by region:
•North American sales increased $219 million principally due to higher demand in power generation markets, especially data center and commercial markets, partially offset by lower demand for engines.
•European sales increased $110 million mainly due to favorable demand in power generation markets.
Distribution segment sales for the nine months ended September 30, 2024, increased $780 million versus the comparable period in 2023. The following were the primary drivers by region:
•North American sales increased $351 million principally due to higher demand in power generation markets, especially data center and commercial markets, partially offset by lower demand for engines and aftermarket products.
•European sales increased $227 million mainly due to favorable demand in power generation markets.
•Asia Pacific sales increased $140 million primarily due to strong demand in power generation markets, especially data center markets and service volume.
Segment EBITDA
Distribution segment EBITDA for the three months ended September 30, 2024, increased $64 million versus the comparable period in 2023, primarily due to increased volumes, partially offset by higher compensation expenses.
Distribution segment EBITDA for the nine months ended September 30, 2024, increased $38 million versus the comparable period in 2023, primarily due to favorable pricing, partially offset by higher compensation expenses and unfavorable mix.
Power Systems Segment Results
Financial data for the Power Systems segment was as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
External sales$912$798$114 14 %$2,508$2,271$237 10 %
Intersegment sales775646129 20 %2,1571,973184 9 %
Total sales1,6871,444243 17 %4,6654,244421 10 %
Research, development and engineering expenses57603 5 %1801899 5 %
Equity, royalty and interest income from investees20119 82 %654223 55 %
Interest income13(2)(67)%77— — %
Segment EBITDA32823494 40 %866654212 32 %
   Percentage Points  Percentage Points
Segment EBITDA as a percentage of total sales19.4 %16.2 % 3.2 18.6 %15.4 % 3.2 
Sales for our Power Systems segment by product line were as follows:

 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
Power generation$1,055 $850 $205 24 %$2,895 $2,474 $421 17 %
Industrial508 475 33 7 %1,406 1,398 8 1 %
Generator technologies124 119 5 4 %364 372 (8)(2)%
Total sales$1,687 $1,444 $243 17 %$4,665 $4,244 $421 10 %
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Sales
Power Systems segment sales for the three and nine months ended September 30, 2024, increased $243 million and $421 million, respectively, versus the comparable periods in 2023, primarily due to an increase in global power generation sales (especially in data center markets).
Segment EBITDA
Power Systems segment EBITDA for the three and nine months ended September 30, 2024, increased $94 million and $212 million, respectively, versus the comparable periods in 2023, mainly due to favorable pricing and higher volumes, partially offset by higher compensation expenses.
Accelera Segment Results
Financial data for the Accelera segment was as follows:
 Three months endedFavorable/Nine months endedFavorable/
 September 30,(Unfavorable)September 30,(Unfavorable)
In millions20242023AmountPercent20242023AmountPercent
External sales$100$98$2 2 %$285$259$26 10 %
Intersegment sales1055 100 %291415 NM
Total sales1101037 7 %31427341 15 %
Research, development and engineering expenses5750(7)(14)%166150(16)(11)%
Equity, royalty and interest loss from investees(11)(3)(8)NM(22)(11)(11)(100)%
Interest income——— — %—1(1)(100)%
Segment EBITDA(115)(114)(1)(1)%(333)(322)(11)(3)%
"NM" - not meaningful information
Accelera segment sales for the three and nine months ended September 30, 2024, increased $7 million and $41 million versus the comparable periods in 2023 primarily due to improved sales of electrolyzers, partially offset by lower electrified powertrain sales.
OUTLOOK
Our outlook reflects the following positive trends and challenges to our business that could impact our revenue and earnings potential for the remainder of 2024.
Positive Trends
•We expect demand for medium-duty trucks in North America to remain strong.
•We believe market demand for trucks in India will continue to be strong.
•We expect demand within our Power Systems business to remain strong, including the power generation and mining markets.
•We anticipate demand in our aftermarket business will continue to be robust, driven primarily by strong demand in our Engine and Power Systems businesses.
•We expect demand for trucks in China to remain stable in 2024.
Challenges
•We expect demand for heavy-duty trucks in North America to weaken modestly during the remainder of 2024.
•Increases in costs, as well as other inflationary pressures, could negatively impact earnings.
•The financial implications resulting from our Settlement Agreements will result in incremental interest expense for debt utilized in funding the civil penalty.
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LIQUIDITY AND CAPITAL RESOURCES
Key Working Capital and Balance Sheet Data
We fund our working capital with cash from operations and short-term borrowings, including commercial paper, when necessary. Various assets and liabilities, including short-term debt, can fluctuate significantly from month to month depending on short-term liquidity needs. As a result, working capital is a prime focus of management's attention. Working capital and balance sheet measures are provided in the following table:
Dollars in millionsSeptember 30,
2024		December 31,
2023
Working capital (1)
$3,713 $2,295 
Current ratio1.32 1.18 
Accounts and notes receivable, net$5,387 $5,583 
Days' sales in receivables59 58 
Inventories$6,134 $5,677 
Inventory turnover4.2 4.5 
Accounts payable (principally trade)$4,206 $4,260 
Days' payable outstanding61 62 
Total debt$7,587 $6,696 
Total debt as a percent of total capital40.1 %40.3 %
 (1) Working capital included cash and cash equivalents.
Cash Flows
Cash and cash equivalents were impacted as follows:
Nine months ended
 September 30, 
In millions20242023Change
Net cash provided by operating activities$65 $2,507 $(2,442)
Net cash used in investing activities(1,069)(860)(209)
Net cash provided by (used in) financing activities 564 (1,069)1,633 
Effect of exchange rate changes on cash and cash equivalents(6)(67)61 
Net (decrease) increase in cash and cash equivalents$(446)$511 $(957)
Net cash provided by operating activities decreased $2.4 billion for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to higher working capital requirements of $2.6 billion. The higher working capital requirements resulted in a cash outflow of $3.0 billion compared to a cash outflow of $370 million in the comparable period of 2023, mainly due to $1.9 billion of payments required by the Settlement Agreements.
Net cash used in investing activities increased $209 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to cash associated with the Atmus divestiture.
Net cash provided by financing activities increased $1.6 billion for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to higher proceeds from borrowings of $1.8 billion (principally related to our 2024 note issuance) and increased net borrowings of commercial paper of $706 million, partially offset by higher payments on borrowings and finance lease obligations of $995 million (largely related to increased early payments of $950 million on our term loan, due 2025, compared to the prior year).
The effect of exchange rate changes on cash and cash equivalents for the nine months ended September 30, 2024, versus the comparable period in 2023, changed $61 million primarily due to favorable fluctuations in the British pound and Chinese renminbi.
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Sources of Liquidity
We generate significant ongoing cash flow. Cash provided by operations is generally our principal source of liquidity. In February, we issued $2.25 billion in long-term debt to pay down higher cost debt, finance Settlement Agreement payments and improve our overall liquidity. Our sources of liquidity include the following:
September 30, 2024
In millionsTotalU.S.InternationalPrimary location of international balances
Cash and cash equivalents$1,733 $843 $890 Singapore, Australia, Mexico, China, Belgium
Marketable securities (1)
518 87 431 India
Total$2,251 $930 $1,321 
Available credit capacity
Revolving credit facilities (2)
$2,364 
International and other uncommitted domestic credit facilities$527 
(1) The majority of marketable securities could be liquidated into cash within a few days.
(2) The five-year credit facility for $2.0 billion and the 364-day credit facility for $2.0 billion, maturing June 2029 and June 2025, respectively, are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. At September 30, 2024, we had $1.6 billion of commercial paper outstanding, which effectively reduced our available capacity under our revolving credit facilities to $2.4 billion.
Cash, Cash Equivalents and Marketable Securities
A significant portion of our cash flow is generated outside the U.S. We manage our worldwide cash requirements considering available funds among the many subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. As a result, we do not anticipate any local liquidity restrictions to preclude us from funding our operating needs with local resources.
If we distribute our foreign cash balances to the U.S. or to other foreign subsidiaries, we could be required to accrue and pay withholding taxes, for example, if we repatriated cash from certain foreign subsidiaries whose earnings we asserted are completely or partially permanently reinvested. Foreign earnings for which we assert permanent reinvestment outside the U.S. consist primarily of earnings of our China, India, Canada (including underlying subsidiaries) and Netherlands domiciled subsidiaries. At present, we do not foresee a need to repatriate any earnings for which we assert permanent reinvestment. However, to help fund cash needs of the U.S. or other international subsidiaries as they arise, we repatriate available cash from certain foreign subsidiaries whose earnings are not completely permanently reinvested when cost effective to do so.
Debt Facilities and Other Sources of Liquidity
On June 3, 2024, we entered into an amended and restated five-year credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 3, 2029. The credit agreement amended and restated the prior $2.0 billion five-year credit agreement that would have matured on August 18, 2026.
On June 3, 2024, we entered into an amended and restated 364-day credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 2, 2025. This credit agreement amended and restated the prior $2.0 billion 364-day credit facility that matured on June 3, 2024.
On February 20, 2024, we issued $2.25 billion aggregate principal amount of senior unsecured notes consisting of $500 million aggregate principal amount of 4.90 percent senior unsecured notes due in 2029, $750 million aggregate principal amount of 5.15 percent senior unsecured notes due in 2034 and $1.0 billion aggregate principal amount of 5.45 percent senior unsecured notes due in 2054. We received net proceeds of $2.2 billion. See NOTE 9, "DEBT," to the Condensed Consolidated Financial Statements for additional information.
Our committed credit facilities provide access up to $4.0 billion, including our $2.0 billion 364-day facility that expires June 2, 2025, and our $2.0 billion five-year facility that expires on June 3, 2029. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. We intend to maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities at or before expiration. There were no outstanding borrowings under these facilities at September 30, 2024.
Our committed credit facilities provide access up to $4.0 billion of unsecured, short-term promissory notes (commercial paper) pursuant to the Board authorized commercial paper programs. These programs facilitate the private placement of unsecured short-term
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debt through third-party brokers. We intend to use the net proceeds from the commercial paper borrowings for general corporate purposes. The total combined borrowing capacity under the revolving credit facilities and commercial paper programs should not exceed $4.0 billion. At September 30, 2024, we had $1.6 billion of commercial paper outstanding, which effectively reduced our available capacity under our revolving credit facilities to $2.4 billion. See NOTE 9, "DEBT," to the Condensed Consolidated Financial Statements for additional information.
As a well-known seasoned issuer, we filed an automatic shelf registration of an undetermined amount of debt and equity with the Securities and Exchange Commission (SEC) on February 8, 2022. Under this shelf registration we may offer, from time to time, debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units.
Supply Chain Financing
We currently have supply chain financing programs with financial intermediaries, which provide certain vendors the option to be paid by financial intermediaries earlier than the due date on the applicable invoice. When a vendor utilizes the program and receives an early payment from a financial intermediary, they take a discount on the invoice. We then pay the financial intermediary the face amount of the invoice on the original due date, which generally have 60 to 90 day payment terms. The maximum amount that we could have outstanding under these programs was $551 million. We do not reimburse vendors for any costs they incur for participation in the program, their participation is completely voluntary and there are no assets pledged as security or other forms of guarantees provided for the committed payment to the finance provider or intermediary. As a result, all amounts owed to the financial intermediaries are presented as accounts payable in our Condensed Consolidated Balance Sheets. Amounts due to the financial intermediaries reflected in accounts payable at September 30, 2024, were $154 million.
Accounts Receivable Sales Program
In May 2024, we entered into an accounts receivable sales agreement with Wells Fargo Bank, N.A., to sell certain accounts receivable up to the Board approved limit of $500 million. There was no activity under the program during the nine months ended September 30, 2024. See NOTE 1, "NATURE OF OPERATIONS AND BASIS OF PRESENTATION," to the Condensed Consolidated Financial Statements for additional information.
Uses of Cash
Settlement Agreements
In December 2023, we announced that we reached an agreement in principle with the EPA, CARB, the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General’s Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024 (collectively, the Settlement Agreements). As part of the Settlement Agreements, among other things, we agreed to pay civil penalties, complete recall requirements, undertake mitigation projects, provide extended warranties, undertake certain testing, take certain corporate compliance measures and make certain payments. Failure to comply with the terms and conditions of the Settlement Agreements subjects us to stipulated penalties. We recorded a charge of $2.0 billion in the fourth quarter of 2023 to resolve the matters addressed by the Settlement Agreements involving approximately one million of our pick-up truck applications in the U.S. This charge was in addition to the previously announced charges of $59 million for the recalls of model years 2013 through 2018 RAM 2500 and 3500 trucks and model years 2016 through 2019 Titan trucks. We made $1.9 billion of payments required by the Settlement Agreements in the second quarter of 2024. In the third quarter of 2024, we have accrued immaterial amounts related to stipulated penalties we determined to be probable and estimable. Any further non-compliance with the Settlement Agreements will likely subject us to further stipulated penalties and other adverse consequences. See NOTE 11, "COMMITMENTS AND CONTINGENCIES," to the Condensed Consolidated Financial Statements for additional information.
Dividends
We paid dividends of $719 million during the nine months ended September 30, 2024. In July 2024, the Board authorized an increase to our quarterly dividend of approximately 8 percent from $1.68 per share to $1.82 per share.
Capital Expenditures
Capital expenditures for the nine months ended September 30, 2024, were $668 million versus $694 million in the comparable period in 2023. We continue to invest in new product lines and targeted capacity expansions. We plan to spend an estimated $1.2 billion to $1.3 billion in 2024 on capital expenditures with over 65 percent of these expenditures expected to be invested in North America.
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Current Maturities of Short and Long-Term Debt
We had $1.6 billion of commercial paper outstanding at September 30, 2024, that matures in less than one year. The maturity schedule of our existing long-term debt requires significant cash outflows in 2025 when our 0.75 percent senior notes are due. Required annual long-term debt principal payments range from $60 million to $661 million over the next five years (including the remainder of 2024). We intend to retain our strong investment credit ratings. See NOTE 9, "DEBT," to the Condensed Consolidated Financial Statements for additional information.
Pensions
Our global pension plans, including our unfunded and non-qualified plans, were 113 percent funded at December 31, 2023. Our U.S. defined benefit plans (qualified and non-qualified), which represented approximately 69 percent of the worldwide pension obligation, were 113 percent funded, and our U.K. defined benefit plans were 113 percent funded at December 31, 2023. The funded status of our pension plans is dependent upon a variety of variables and assumptions including return on invested assets, market interest rates and levels of voluntary contributions to the plans. In the first nine months of 2024, the investment gain on our U.S. pension trusts was 6.3 percent, while our U.K. pension trusts' loss was 3.3 percent. We anticipate making additional defined benefit pension contributions during the remainder of 2024 of $14 million for our U.S. and U.K. qualified and non-qualified pension plans. These contributions may be made from trusts or company funds either to increase pension assets or to make direct benefit payments to plan participants. We expect our 2024 annual net periodic pension cost to approximate $34 million.
Stock Repurchases
In December 2021, the Board authorized the acquisition of up to $2.0 billion of additional common stock upon completion of the $2.0 billion repurchase plan authorized in 2019. We did not make any repurchases of common stock in the first nine months of 2024. The dollar value remaining available for future purchases under the 2019 program at September 30, 2024, was $218 million.
Amplify Cell Technologies LLC Joint Venture
In September 2023, our Accelera business signed an agreement to form a joint venture, Amplify Cell Technologies LLC, with Daimler Trucks and Buses US Holding LLC (Daimler Truck), PACCAR Inc. (PACCAR) and EVE Energy to accelerate and localize battery cell production and the battery supply chain in the U.S., including building a 21-gigawatt hour battery production facility in Marshall County, Mississippi. The joint venture will manufacture battery cells for electric commercial vehicles and industrial applications. At September 30, 2024, our maximum remaining required contribution to the joint venture was $704 million, which could be reduced by future government incentives received by the joint venture. The majority of the contribution is expected to be made by the end of 2028. See NOTE 4, "EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES," to the Condensed Consolidated Financial Statements for additional information.

Credit Ratings
Our rating and outlook from each of the credit rating agencies as of the date of filing are shown in the table below:
Long-TermShort-Term
Credit Rating Agency (1)
 Senior Debt RatingDebt RatingOutlook
Standard and Poor’s Rating Services AA1Stable
Moody’s Investors Service, Inc. A2P1Stable
(1) Credit ratings are not recommendations to buy, are subject to change, and each rating should be evaluated independently of any other rating. In addition, we undertake no obligation to update disclosures concerning our credit ratings, whether as a result of new information, future events or otherwise.
Management's Assessment of Liquidity
Our financial condition and liquidity remain strong. Our solid balance sheet and credit ratings enable us to have ready access to credit and the capital markets. We assess our liquidity in terms of our ability to generate adequate cash to fund our operating, investing and financing activities. We believe our access to capital markets, our existing cash and marketable securities, operating cash flow and revolving credit facilities provide us with the financial flexibility needed to fund targeted capital expenditures, dividend payments, debt service obligations, projected pension obligations, common stock repurchases and fund joint venture contributions and acquisitions through 2024 and beyond. We continue to generate significant cash from operations and maintain access to our revolving credit facilities and commercial paper programs as noted above.
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APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
A summary of our significant accounting policies is included in NOTE 1, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,” of the Notes to the Consolidated Financial Statements of our 2023 Form 10-K, which discusses accounting policies that we have selected from acceptable alternatives.
Our Condensed Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles that often require management to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts presented and disclosed in the financial statements. Management reviews these estimates and assumptions based on historical experience, changes in business conditions and other relevant factors they believe to be reasonable under the circumstances. In any given reporting period, our actual results may differ from the estimates and assumptions used in preparing our Condensed Consolidated Financial Statements.
Critical accounting estimates are defined as follows: the estimate requires management to make assumptions about matters that were highly uncertain at the time the estimate was made; different estimates reasonably could have been used; or if changes in the estimate are reasonably likely to occur from period to period and the change would have a material impact on our financial condition or results of operations. Our senior management has discussed the development and selection of our accounting policies, related accounting estimates and the disclosures set forth below with the Audit Committee of the Board. Our critical accounting estimates disclosed in the Form 10-K address estimating liabilities for warranty programs, fair value of intangible assets, assessing goodwill impairment, accounting for income taxes and pension benefits.
A discussion of our critical accounting estimates may be found in the “Management’s Discussion and Analysis” section of our 2023 Form 10-K under the caption “APPLICATION OF CRITICAL ACCOUNTING ESTIMATES.” Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in different policies or estimates being reported in the first nine months of 2024.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
See NOTE 17, "RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS," in the Notes to Condensed Consolidated Financial Statements for additional information.
ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk
A discussion of quantitative and qualitative disclosures about market risk may be found in Item 7A of our 2023 Form 10-K. There have been no material changes in this information since the filing of our 2023 Form 10-K. 
ITEM 4.  Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, our CEO and our CFO concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2024, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II.  OTHER INFORMATION
ITEM 1.  Legal Proceedings
The matters described under "Legal Proceedings" in NOTE 11, "COMMITMENTS AND CONTINGENCIES," to the Condensed Consolidated Financial Statements are incorporated herein by reference.
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ITEM 1A.  Risk Factors
In addition to other information set forth in this report and the risk factor noted below, you should consider other risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition or future results. Other than noted below, there have been no material changes to our risks described in our 2023 Annual Report on Form 10-K or the "CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION" in this Quarterly report. Additional risks and uncertainties not currently known to us or that we currently judge to be immaterial also may materially adversely affect our business, financial condition or operating results.
GOVERNMENT REGULATION
While we have reached Settlement Agreements with the EPA, CARB, the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General's Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., we have incurred, and likely will incur, other additional claims, costs and expenses in connection with the matters covered by the Settlement Agreements and other matters related to our compliance with emission standards for our engines, including with respect to additional regulatory action and collateral litigation related to these matters. Those and related expenses and reputational damage could have a material adverse impact on our results of operations, financial condition and cash flows.
In December 2023, we announced that we reached the agreement in principle and recorded a charge of $2.0 billion in the fourth quarter of 2023 to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024. This fourth quarter of 2023 charge was in addition to the previously announced charges of $59 million for the recalls of model years 2013 through 2018 RAM 2500 and 3500 trucks and model years 2016 through 2019 Titan trucks. Failure to comply with the terms and conditions of the Settlement Agreements subjects us to stipulated penalties. In the third quarter of 2024, we have accrued immaterial amounts related to stipulated penalties we determined to be probable and estimable. Any further non-compliance with the Settlement Agreements will likely subject us to further stipulated penalties and other adverse consequences.
We have also been in communication with other non-U.S. regulators regarding matters related to the emission systems in our engines and may also become subject to additional regulatory review in connection with these matters.
In connection with our announcement of our entry into the agreement in principle, we became subject to shareholder, consumer and third-party litigation regarding the matters covered by the Settlement Agreements, and we may become subject to additional litigation in connection with these matters.
The consequences resulting from the resolution of the foregoing matters are uncertain and the related expenses and reputational damage could have a material adverse impact on our results of operations, financial condition and cash flows. See NOTE 11, “COMMITMENTS AND CONTINGENCIES,” to the Condensed Consolidated Financial Statements for additional information.
ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds
The following information is provided pursuant to Item 703 of Regulation S-K:
 Issuer Purchases of Equity Securities
PeriodTotal
Number of
Shares
Purchased 		Average
Price Paid
per Share		Total Number of
Shares Purchased
as Part of Publicly
Announced
Plans or Programs
Approximate
Dollar Value of Shares
that May Yet Be
Purchased Under the
Plans or Programs
(in millions) (1)
July 1 - July 31— $— — $2,218 
August 1 - August 31— — — 2,218 
September 1 - September 30— — — 2,218 
Total— — —  
(1) Shares repurchased under our Key Employee Stock Investment Plan only occur in the event of a participant default, which cannot be predicted, and were excluded from this column.
In December 2021, the Board authorized the acquisition of up to $2.0 billion of additional common stock upon completion of the $2.0 billion repurchase plan authorized in 2019. During the three months ended September 30, 2024, we did not make any repurchases of common stock. The dollar value remaining available for future purchases under the 2019 program at September 30, 2024, was $218 million.
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Our Key Employee Stock Investment Plan allows certain employees, other than officers, to purchase shares of common stock on an installment basis up to an established credit limit. We hold participants’ shares as security for the loans and would, in effect, repurchase shares only if the participant defaulted in repayment of the loan. Shares associated with participants' sales are sold as open-market transactions via a third-party broker.
ITEM 3.  Defaults Upon Senior Securities
Not applicable. 
ITEM 4.  Mine Safety Disclosures
Not applicable. 
ITEM 5.  Other Information
(c) During the third quarter of 2024, none of our directors or executive officers adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K).
ITEM 6. Exhibits
The exhibits listed in the following Exhibit Index are filed as part of this Quarterly Report on Form 10-Q.
CUMMINS INC.
EXHIBIT INDEX
Exhibit No. Description of Exhibit
 
 
 
101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 
101.SCH* Inline XBRL Taxonomy Extension Schema Document.
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed with this quarterly report on Form 10-Q are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Net Income for the three and nine months ended September 30, 2024 and 2023, (ii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, (iii) the Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023, (v) the Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Equity for the three and nine months ended September 30, 2024 and 2023, (vi) Notes to Condensed Consolidated Financial Statements and (vii) the information included in Part II. Item 5(c).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Cummins Inc. 
Date: November 5, 2024 
  
By:/s/ MARK A. SMITH By:/s/ LUTHER E. PETERS
 Mark A. Smith  Luther E. Peters
 Vice President and Chief Financial Officer  Vice President-Controller
 (Principal Financial Officer)  (Principal Accounting Officer)

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