UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2024
 Commission File Number 1-4949
 CUMMINS INC.
 Indiana

 35-0257090

 (State of Incorporation)
 (IRS Employer Identification No.)

 500 Jackson Street
 Box 3005
 Columbus, Indiana 47202-3005
 (Address of principal executive offices)
 Telephone ( 812) 377-5000
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class

 Trading Symbol(s)
 Name of each exchange on which registered

 Common stock, $2.50 par value

 CMI
 New York Stock Exchange

 Securities registered pursuant to Section 12(g) of the Act: None.
 __________________________________________________________________________________________________
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:

 Large accelerated filer
 x
 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
 The aggregate market value of the voting stock held by non-affiliates was approximately $ 38.0 billion at June 30, 2024. This value includes all shares of the registrant's common stock, except for treasury shares.
 As of January 31, 2025, there were 137,481,164 shares outstanding of $ 2.50 par value common stock.
 Documents Incorporated by Reference
 Portions of the registrant's definitive Proxy Statement for its 2025 annual meeting of shareholders, which will be filed with the Securities and Exchange Commission on Schedule 14A within 120 days after the end of 2024, will be incorporated by reference in Part III of this Form 10-K to the extent indicated therein upon such filing.

 PART
 ITEM

 PAGE

 Cautionary Statements Regarding Forward-Looking Information

 I

 Business

 Overview

 Operating Segments

 Engine Segment

 Components Segment

 Distribution Segment

 Power Systems Segment

 Accelera Segment

 Joint Ventures, Alliances and Non-Wholly-Owned Subsidiaries

 Supply

 Patents and Trademarks

 Seasonality

 Largest Customers

 Backlog

 Research and Development

 Environmental Sustainability

 Environmental Compliance

 Human Capital Resources

 Available Information

 Information About Our Executive Officers

 1A

 Risk Factors

 1B

 Unresolved Staff Comments

 1C

 Cybersecurity

 Properties

 Legal Proceedings

 Mine Safety Disclosures

 II

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 [Reserved]

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 7A

 Quantitative and Qualitative Disclosures About Market Risk

 Financial Statements and Supplementary Data

 Index to Financial Statements

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 9A

 Controls and Procedures

 9B

 Other Information

 9C

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 III

 Directors, Executive Officers and Corporate Governance

 Executive Compensation

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Certain Relationships and Related Transactions and Director Independence

 Principal Accounting Fees and Services

 IV

 Exhibits and Financial Statement Schedules

 Form 10-K Summary

 Signatures

 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 annual 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
 • 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;
 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, divestitures or exiting the production of certain product lines or product categories and related uncertainties of such decisions;

 • 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 (IT) environment and data security;
 • the use of artificial intelligence in our business and in our products and challenges with properly managing its use;
 • 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 sustainability expectations or standards, or achieve our sustainability 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 Item 1A. 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 annual report and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

 ITEM 1. Business

 OVERVIEW
 We were 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 - Engine, Components, 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, electrified power systems with innovative components and subsystems, including battery, fuel cell and electric power technologies and hydrogen production technologies. 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 650 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. 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 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.
 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 (DOJ) 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 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.

 OPERATING SEGMENTS
 We have five complementary operating segments: Engine, Components, Distribution, Power Systems and Accelera. These segments share technology, customers, strategic partners, brand recognition and our distribution network in order to compete more efficiently and effectively in their respective markets. In each of our operating segments, we compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. Our products primarily compete on the basis of performance, price, total cost of ownership, fuel economy, emissions compliance, speed of delivery, quality and customer support.
 We use segment earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests (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. See NOTE 25, "OPERATING SEGMENTS," to our Consolidated Financial Statements for additional information and a reconciliation of our segment information to the corresponding amounts in our Consolidated Statements of Net Income.

 Engine Segment
 Engine segment sales and EBITDA as a percentage of consolidated results were:

 2024
 2023
 2022

 Percent of consolidated net sales (1)

 %
 %
 %

 Percent of consolidated EBITDA (1)

 %
 %
 %

 (1) Measured before intersegment eliminations

 The Engine segment manufactures and markets a broad range of diesel and natural gas-powered engines under the Cummins brand name, as well as certain customer brand names, for the heavy-duty truck, medium-duty truck and bus, light-duty automotive and off-highway markets. We manufacture a wide variety of engine products including:
 • Engines with a displacement range of 2.8 to 15 liters and horsepower ranging from 48 to 715; and
 • New and remanufactured parts and engines, which are sold and serviced primarily through our extensive distribution network.
 The Engine segment is organized by engine displacement size and serves these end-user markets:
 • Heavy-duty truck - We manufacture diesel and natural gas engines that range from 310 to 615 horsepower serving global heavy-duty truck customers worldwide, primarily in North America, China and Australia.
 • Medium-duty truck and bus - We manufacture diesel and natural gas engines ranging from 130 to 450 horsepower serving medium-duty truck and bus customers worldwide, with key markets including North America, Europe, Latin America, China, Australia and India. Applications include pick-up, delivery, emergency vehicles, regional haul and vocational trucks and school, transit and shuttle buses. We also provide diesel engines for Class A motor homes (RVs), primarily in North America.
 • Light-duty automotive (pick-up and light commercial vehicle (LCV)) - We manufacture 105 to 430 horsepower diesel engines, including engines for the pick-up truck market for Stellantis N.V. (Stellantis) in North America and LCV markets in Latin America and China.
 • Off-highway (industrial engines) - We manufacture diesel engines that range from 48 to 715 horsepower serving key global markets including construction, mining, marine, rail, oil and gas, defense and agriculture and also the power generation business for standby, mobile and distributed power generation solutions throughout the world.
 The principal customers of our heavy-duty truck engines include truck manufacturers such as PACCAR Inc. (PACCAR), Traton Group (Traton) and Daimler Trucks AG (Daimler). The principal customers of our medium-duty truck and bus engines include truck manufacturers such as Daimler, Traton and PACCAR. The principal customers of our light-duty automotive engines are Stellantis, Anhui Jianghuai Automobile Group Co., Ltd., Volkswagen Caminh es e nibus and China National Heavy Duty Truck Group. We sell our industrial engines to manufacturers of construction and agricultural equipment including Hyundai Heavy Industries, Komatsu Ltd. (Komatsu), Zoomlion Heavy Industry Science & Technology Co., Ltd, Xuzhou Construction Machinery Group, Guangxi LiuGong Machinery Co., Ltd, JLG Industries, Inc. and Sany Group.
 In the Engine segment, our competitors vary from country to country, with local manufacturers generally predominant in each geography. Other independent engine manufacturers include Weichai Power Co. Ltd. and Deutz AG. Truck OEMs may also elect to produce their own engines, and we must provide competitive products to win and keep their business. Truck OEMs that currently produce some or all of their own engines include Daimler, PACCAR, Traton, Volvo Powertrain, Ford Motor Company, China First Auto Works, Dongfeng Motor Corporation, CNH Industrial and Isuzu.

 Components Segment
 Components segment sales and EBITDA as a percentage of consolidated results were:

 2024
 2023
 2022

 Percent of consolidated net sales (1)

 %
 %
 %

 Percent of consolidated EBITDA (1)

 %
 %
 %

 (1) Measured before intersegment eliminations

 The Components segment designs, manufactures and supplies products which complement the Engine and Power Systems segments, including axles, drivelines, brakes and suspension systems for commercial diesel and natural gas applications, aftertreatment systems, turbochargers, fuel systems, valvetrain technologies, automated transmissions and electronics. We design and develop these products and systems to meet increasingly stringent emission and fuel economy standards.
 Beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment leader 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.
 The Components segment is organized around the following businesses:
 • Drivetrain and braking systems - We design, manufacture and supply drivetrain systems, including axles, drivelines, brakes and suspension systems primarily for commercial vehicle and industrial applications. We also market and sell truck, trailer, on- and off-highway and other products principally for OEM dealers and other independent distributors and service garages within the aftermarket industry. We primarily serve markets in North America, Europe, South America, India, Asia Pacific and China.
 • Emission solutions - We are a global leader in designing, manufacturing and integrating aftertreatment technology and solutions for the commercial on- and off-highway light-duty, medium-duty, heavy-duty and high-horsepower engine markets. Aftertreatment is the mechanism used to convert engine emissions of criteria pollutants, such as particulate matter, nitrogen oxides (NOx), carbon monoxide and unburned hydrocarbons into harmless emissions. Our products include custom engineering systems and integrated controls, oxidation catalysts, particulate filters, selective catalytic reduction systems and engineered components, including dosers. Our emission solutions business primarily serves markets in North America, Europe, China, India, Brazil and Asia Pacific. We serve both OEM first fit and retrofit customers.
 • Components and software - We design, manufacture and market turbocharger, fuel system and valvetrain technologies for light-duty, mid-range, heavy-duty and high-horsepower markets. We also design, develop and supply electronic control modules, sensors and supporting software for on-highway, off-highway and power generation applications. We primarily serve markets in North America, Europe, China and India.
 • Automated transmissions - We develop and supply automated transmissions for the heavy-duty commercial vehicle market. Automated transmissions include automated manual transmissions, dual-clutch transmissions and automatic transmissions for internal combustion engines. The Eaton Cummins Automated Transmission Technologies (ECJV) joint venture is a consolidated 50/50 joint venture between Cummins Inc. and Eaton Corporation Plc. and serves markets in North America and China.
 • Atmus - 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 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.
 Customers of the Components segment generally include the Engine, Distribution, Power Systems and Accelera segments, joint ventures including Tata Cummins Ltd., Dongfeng Cummins Engine Co., Ltd. and Beijing Foton Cummins Engine Co., Ltd., truck manufacturers and other OEMs, many of which are also customers of the Engine segment, such as PACCAR, Daimler, Volvo, Traton, Tata Motors Ltd. (Tata Motors) and other manufacturers that use our components in their product platforms.
 The Components segment competes with other manufacturers of aftertreatment systems, turbochargers, fuel systems, drivetrain systems and transmissions. Our primary competitors in these markets include Robert Bosch GmbH, Parker-Hannifin Corporation, Garrett Motion, Inc., Borg-Warner Inc., Tenneco Inc., Eberspacher Holding GmbH & Co. KG, Denso Corporation, Allison Transmission, Aisin Corporation, Knorr-Bremse AG, ZF Friedrichshafen AG and Dana Incorporated.

 Distribution Segment
 Distribution segment sales and EBITDA as a percentage of consolidated results were:

 2024
 2023
 2022

 Percent of consolidated net sales (1)

 %
 %
 %

 Percent of consolidated EBITDA (1)

 %
 %
 %

 (1) Measured before intersegment eliminations

 The Distribution segment is our primary sales, service and support channel. The segment serves our customers and certified dealers through a worldwide network of wholly-owned, joint venture and independent distribution locations. Wholly-owned locations operate and serve markets in the seven geographic regions noted below. Joint venture locations serve markets in South America, Southeast Asia and India while independent distribution locations serve markets in these and other geographies.
 Distribution's mission encompasses the sale and support of a wide range of products and services, including power generation systems, high-horsepower engines, heavy-duty and medium-duty engines designed for on- and off-highway use, application engineering services, custom-designed assemblies, retail and wholesale aftermarket parts and in-shop and field-based repair services. We also provide selected sales and aftermarket support for the Accelera business. Our familiarity with a wide range of market applications allows us to tailor sales, service and support to meet customer-specific needs.
 The Distribution segment is organized and managed as seven geographic regions, including North America, Asia Pacific, Europe, China, India, Africa and Middle East and Latin America. Across these regions, our locations compete with distributors or dealers that offer similar products. In many cases, these competing distributors or dealers are owned by, or affiliated with the companies that are listed as competitors of the Engine, Components or Power Systems segments. These competitors vary by geographical location and application market.

 Power Systems Segment
 Power Systems segment sales and EBITDA as a percentage of consolidated results were:

 2024
 2023
 2022

 Percent of consolidated net sales (1)

 %
 %
 %

 Percent of consolidated EBITDA (1)

 %
 %
 %

 (1) Measured before intersegment eliminations

 The Power Systems segment is organized around the following product lines:
 • Power generation - We are a global OEM offering standby and prime power generators ranging from 2 kilowatts to 3.5 megawatts, as well as controls, paralleling systems and transfer switches, for customers with consumer, data center, commercial, industrial, health care, prime rental fleet and defense applications. We also provide turnkey solutions for distributed generation and energy management applications using natural gas, diesel and newer alternative sustainable fuels such as hydrotreated vegetable oil and renewable natural gas.
 • Industrial - We design, manufacture, sell and support diesel and natural gas high-speed, high-horsepower engines up to 4,400 horsepower for a wide variety of equipment in mining, oil and gas, marine, rail and defense applications throughout the world.
 • Generator technologies - We design, manufacture, sell and support A/C generator/alternator products for internal consumption and for external generator set assemblers. Our products are sold under the Stamford and AVK brands and range in output from 7.5 kilovolt-amperes (kVA) to 11,200 kVA.
 Our customer base for Power Systems offerings is highly diversified, with customer groups varying based on their power needs. China, India, Europe, Asia Pacific, Latin America, the Middle East and Africa are our largest geographic markets outside of North America.

 In the markets served by the Power Systems segment, we compete with a variety of independent engine manufacturers and generator set assemblers as well as OEMs who manufacture engines for their own products around the world. Our primary competitors are Caterpillar, Inc., MTU (Rolls Royce Power Systems Group) and Kohler/SDMO (Kohler Group), but we also compete with INNIO, Generac, Mitsubishi Heavy Industries and numerous regional generator set assemblers. Our alternator business competes globally with Leroy Somer, Marathon Electric and Meccalte, among others.

 Accelera Segment
 The Accelera segment designs, manufactures, sells and supports electrified power systems with innovative components and subsystems, including battery, fuel cell and electric powertrain technologies as well as hydrogen production technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of electrified power systems and related components and subsystems and our electrolyzers for hydrogen production.
 We anticipate our customer base for Accelera offerings will be highly diversified, representing multiple end markets with a broad range of application requirements. This includes new markets, like the growing green hydrogen market, which we serve with our leading hydrogen production technologies. We will continue to pursue relationships in markets as they adopt electric and hydrogen solutions.
 In the markets served by the Accelera segment, we compete with battery and emerging fuel cell companies, powertrain component manufacturers, vertically integrated OEMs and entities providing hydrogen production solutions. Our primary competitors include Daimler, PACCAR, Traton, BYD Company Limited, Dana Incorporated, BorgWarner Inc., Nel ASA, Siemens Energy, Thyssenkrupp and Plug Power Inc.

 JOINT VENTURES, ALLIANCES AND NON-WHOLLY-OWNED SUBSIDIARIES
 We entered into a number of joint venture agreements and alliances with business partners around the world. Our joint ventures are either distribution or manufacturing entities. We also own controlling interests in non-wholly-owned manufacturing and distribution subsidiaries.
 In the event of a change of control of either party to certain of these joint ventures and other strategic alliances, certain consequences may result including automatic termination and liquidation of the venture, exercise of "put" or "call" rights of ownership by the non-acquired partner, termination or transfer of technology license rights to the non-acquired partner and increases in component transfer prices to the acquired partner. We will continue to evaluate joint venture and partnership opportunities in order to penetrate new markets, develop new products and generate manufacturing and operational efficiencies.
 Financial information about our investments in joint ventures and alliances is incorporated by reference from NOTE 3, "INVESTMENTS IN EQUITY INVESTEES," to our Consolidated Financial Statements.

 Our equity income from these investees was as follows:

 2024
 2023
 2022

 Manufacturing entities

 Dongfeng Cummins Engine Company, Ltd.
 $
 %
 $
 %
 $
 %

 Chongqing Cummins Engine Company, Ltd.
 %
 %
 %

 Beijing Foton Cummins Engine Co., Ltd.
 %
 %
 %

 Tata Cummins, Ltd.
 %
 %
 %

 All other manufacturers
 (1)

 %
 %
 (2)

 %

 Distribution entities

 Komatsu Cummins Chile, Ltda.
 %
 %
 %

 All other distributors
 %
 %
 %

 Cummins share of net income (3)

 $
 %
 $
 %
 $
 %

 (1) Included a $17 million impairment of our joint ventures in the fourth quarter of 2024 related to our Accelera strategic reorganization actions. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.

 (2) Included a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the indefinite suspension of our Russian operations. See NOTE 24, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.

 (3) This total represents our share of net income of our equity investees and is exclusive of royalties and interest income from our equity investees. To see how this amount reconciles to equity, royalty and interest income from investees in our Consolidated Statements of Net Income, see NOTE 3, "INVESTMENTS IN EQUITY INVESTEES," to our Consolidated Financial Statements for additional information.

 Manufacturing Entities
 Our manufacturing joint ventures were generally formed with customers and are primarily intended to allow us to increase our market penetration in geographic regions, reduce capital spending, streamline our supply chain management and develop technologies. Our largest manufacturing joint ventures are based in China and are included in the list below. Our engine manufacturing joint ventures are supplied by our Components segment in the same manner as it supplies our wholly-owned Engine segment and Power Systems segment manufacturing facilities. Our Components segment joint ventures and wholly-owned entities provide axles, drivelines, brakes and suspension systems for commercial diesel and natural gas applications, aftertreatment systems, turbochargers, fuel systems, valvetrain technologies, automated transmissions and electronics that are used with our engines as well as some competitors' products. The results and investments in our joint ventures in which we have 50 percent or less ownership interest (except for ECJV, which is consolidated due to our majority voting interest) discussed below are included in equity, royalty and interest income from investees and investments and advances related to equity method investees in our Consolidated Statements of Net Income and Consolidated Balance Sheets, respectively.
 • Dongfeng Cummins Engine Company, Ltd. - Dongfeng Cummins Engine Company, Ltd. (DCEC) is a joint venture in China with Dongfeng Automotive Co. Ltd., a subsidiary of Dongfeng Motor Corporation and one of the largest medium-duty and heavy-duty truck manufacturers in China. DCEC produces 3.9 liter to 14.5 liter diesel engines with a power range from 80 to 760 horsepower, natural gas engines and automated transmissions. On-highway engines are used in multiple applications in light-duty and medium-duty trucks, special purpose vehicles, buses and heavy-duty trucks with a main market in China. Off-highway engines are used in a variety of construction, power generation, marine and agriculture markets in China.
 • Chongqing Cummins Engine Company, Ltd. - Chongqing Cummins Engine Company, Ltd. is a joint venture in China with Chongqing Machinery and Electric Co. Ltd. This joint venture manufactures several models of our heavy-duty and high-horsepower diesel engines primarily serving the industrial and stationary power markets in China.
 • Beijing Foton Cummins Engine Co., Ltd. - Beijing Foton Cummins Engine Co., Ltd. is a joint venture in China with Beiqi Foton Motor Co., Ltd., a commercial vehicle manufacturer, which has two distinct lines of business - a light-duty business and a heavy-duty business. The light-duty business produces our families of ISF 2.5 liter to 4.5 liter high performance light-duty diesel engines in Beijing. These engines are used in light-duty and medium-duty commercial trucks, pick-up trucks, buses, multipurpose and sport utility vehicles with main markets in China and Brazil. Certain types of small construction equipment and industrial applications are also served by these engine families. The heavy-duty business produces 7.0 liter to 14.5 liter high performance heavy-duty diesel and natural gas engines in Beijing. Certain types of construction equipment and industrial applications are also served by these engine families.

 • Tata Cummins, Ltd. - Tata Cummins, Ltd. is a joint venture in India with Tata Motors Ltd., the largest automotive company in India and a member of the Tata group of companies. This joint venture manufactures Cummins' 3.8 to 8.9 liter diesel and natural gas engines in India with a power range from 75 to 400 horsepower for use in trucks and buses manufactured by Tata Motors, as well as for various on-highway, industrial and power generation applications for Cummins.
 In September 2023, our Accelera business signed an agreement to form a joint venture, Amplify Cell Technologies LLC, with Daimler Truck, 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 received all government approvals and began operations in May 2024, but is not expected to begin production until 2027. 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 each own 30 percent of the joint venture and have two board positions, while EVE Energy owns 10 percent and has 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 is not consolidated. We account for the joint venture using the equity method. As of December 31, 2024, we had contributed $211 million, and our maximum remaining required contribution to the joint venture was $619 million, which could be reduced by future government incentives received by the joint venture. In addition, we are required to purchase 33 percent of the joint venture's output in the future or be subject to certain penalties.
 Distribution Entity
 Komatsu Cummins Chile, Ltda. - Komatsu Cummins Chile, Ltda. is a joint venture with Komatsu America Corporation. The joint venture is a distributor that offers the full range of our products and services to customers and end-users in Chile and Peru. See further discussion of our distribution network under the Distribution segment section above.
 Non-Wholly-Owned Subsidiaries
 • Eaton Cummins Automated Transmission Technologies - We have a majority voting interest in ECJV by virtue of a tie-breaking vote on the joint venture's board of directors. ECJV develops and supplies automated transmissions for the heavy-duty commercial vehicle markets in North America and China.
 • Cummins India Ltd. - We have a controlling interest in Cummins India Ltd. (CIL), which is a publicly listed company on various stock exchanges in India. CIL produces medium-duty, heavy-duty and high-horsepower diesel engines and generators for the Indian and export markets and natural gas spark-ignited engines for power generation, automotive and industrial applications. CIL also has distribution and power generation operations.

 SUPPLY
 The performance of the end-to-end supply chain, extending through to our suppliers, is foundational to our ability to meet customers' expectations and support long-term growth. We are committed to having a robust strategy for how we select and manage our suppliers to enable a market focused supply chain. This requires us to continuously evaluate and upgrade our supply base, as necessary, as we strive to ensure we are meeting the needs of our customers.
 We use a combination of proactive and reactive methodologies to enhance our understanding of supply base risks, which guide the development of risk monitoring and sourcing strategies. We use a process that groups products or services into categories based on similar characteristics, which helps us align our purchasing goals with overall business objectives (Category Strategy Framework). Our Category Strategy Framework process supports the review of our long-term needs and guides decisions on what we make internally and what we purchase externally. For externally purchased items, the strategies also identify the suppliers we should consider for long-term supply agreements to provide the best technology, the lowest total cost and highest supply chain performance. We design and/or manufacture our strategic components used in or with our engines, power generation units, drivetrain and braking systems and Accelera products. Key suppliers are managed through long-term supply agreements that seek to secure capacity, delivery and quality and to assure cost requirements are met over an extended period.
 Other important elements of our sourcing strategy include the following:
 • expanding risk management scope to include sub-tier value chain suppliers for critical components;
 • broadening dual and multi-sourcing where applicable;
 • selecting and managing suppliers to comply with our Supplier Code of Conduct; and
 • assuring our suppliers comply with our prohibited and restricted materials policy.

 Disruption risk in certain categories of our supply chains exist and could negatively impact our ability to meet customer demand. We continue to monitor the supply chain disruptions utilizing early detection methods complemented by structured supplier risk and resiliency assessments. We increased frequency of formal and informal supplier engagement to address potentially impactful supply base constraints and enhanced collaboration to develop specific countermeasures to mitigate risks.

 PATENTS AND TRADEMARKS
 We own or control a significant number of patents and trademarks relating to the products we manufacture. These patents and trademarks were granted and registered over a period of years. Although these patents and trademarks are generally considered beneficial to our operations, we do not believe any patent, group of patents or trademark (other than our leading brand house trademarks) is significant to our business.

 SEASONALITY
 While individual product lines may experience modest seasonal variation in production, there is no material effect on the demand for the majority of our products on a quarterly basis.

 LARGEST CUSTOMERS
 We have thousands of customers around the world and have developed long-standing business relationships with many of them. PACCAR is our largest customer, accounting for 16 percent of our consolidated net sales in 2024, 16 percent in 2023 and 16 percent in 2022. We have long-term supply agreements with PACCAR for our heavy-duty and medium-duty engines and aftertreatment systems. While a significant number of our sales to PACCAR are under long-term supply agreements, these agreements provide for particular engine requirements for specific vehicle models and not a specific volume of engines or aftertreatment systems. PACCAR is our only customer accounting for more than 10 percent of our net sales in 2024. The loss of this customer or a significant decline in the production level of PACCAR vehicles that use our engines would have an adverse effect on our results of operations and financial condition. We have supplied engines to PACCAR for 80 years. A summary of principal customers for each operating segment is included in our segment discussion.
 In addition to our agreement with PACCAR, we have long-term heavy-duty and medium-duty engine and aftertreatment system supply agreements with Traton and Daimler. We also have an agreement with Stellantis to supply engines and aftertreatment products for its pick-up truck applications. Collectively, our net sales to these four customers, including PACCAR, were 36 percent of our consolidated net sales in 2024, 37 percent in 2023 and 36 percent in 2022. Excluding PACCAR, net sales to any single customer were less than 9 percent of our consolidated net sales in 2024, less than 9 percent in 2023 and less than 8 percent in 2022. These agreements contain standard purchase and sale agreement terms covering engine, aftertreatment and engine parts pricing, quality and delivery commitments, as well as engineering product support obligations. The basic nature of our agreements with OEM customers is that they are long-term price and operations agreements that help provide for the availability of our products to each customer through the duration of the respective agreements. Agreements with most OEMs contain bilateral termination provisions giving either party the right to terminate in the event of a material breach, change of control or insolvency or bankruptcy of the other party.

 BACKLOG
 Disruption risk in certain categories of our supply chains exist and could negatively impact our ability to meet customer demand. We have supply agreements with some truck and off-highway equipment OEMs and firm orders from data center and electrolyzer customers, however a large portion of our business is transacted through open purchase orders. Many of these open orders are historically subject to month-to-month releases and are subject to cancellation on reasonable notice without cancellation charges and therefore are not considered firm. We continue to work closely with our suppliers and customers to meet the demand.

 RESEARCH AND DEVELOPMENT
 In 2024, we continued to invest in future critical technologies and products. We will continue to make investments to develop new products and improve our 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 electrified power systems with innovative components and systems including battery and electric power technologies and hydrogen production technologies.
 Our research and development programs are focused on product improvements, product extensions, innovations and cost reductions for our customers. Research and development expenditures include salaries, contractor fees, building costs, utilities, testing, technical IT expenses, administrative expenses and allocation of corporate costs and are expensed, net of contract reimbursements, when incurred. From time to time, we enter into agreements with customers and government agencies to fund a portion of the research and development costs of a particular project. When not associated with a sales contract, we generally account for these reimbursements as an offset to the related research and development expenditure. Research and development expenses, net of contract reimbursements,

 were $1.4 billion in 2024, $1.4 billion in 2023 and $1.2 billion in 2022. Contract reimbursements were $72 million, $81 million and $110 million in 2024, 2023 and 2022, respectively.

 ENVIRONMENTAL SUSTAINABILITY
 We are committed to making people's lives better by powering a more prosperous world. That prosperity includes strong communities, robust business and environmental sustainability.
 Our Board of Directors (the Board) and the senior management team oversee our top risks, while the Enterprise Risk Management program gives the Board and senior management a framework to help them understand, identify, assess, manage and monitor risks so we can meet our strategic objectives. The Board is ultimately responsible for assessing and managing climate-related risks and opportunities. Managing risk effectively is on the agenda at every regular board meeting, and the Board reviews the entire Enterprise Risk Management program and the results of our latest enterprise risk assessment each year. As climate-related risks affect all aspects of the business, the enterprise risks incorporate, where relevant, climate-related aspects, with a separate stand-alone enterprise risk on climate change.
 The Safety, Environment and Technology (SET) committee provides overall guidance and insight on major environmental sustainability initiatives such as our environmental sustainability strategy, as well as environmental management at our facilities and operations.
 In 2019, we introduced our current environmental sustainability strategy focused on three priority areas: addressing climate change and air emissions, using natural resources in the most sustainable way and improving communities. Additional commitments followed including Cummins Water Works, our program for strengthening communities through sustainable water and addressing the global water crisis, and Destination Zero, our long-term product decarbonization strategy.
 The environmental sustainability strategy includes nine specific goals to achieve by 2030, including science-based greenhouse gas (GHG) reduction targets for newly sold products and facilities, as well as aspirational targets for 2050. We started reporting progress on these nine goals, most of which have a baseline year of 2018, in 2022. Key actions in 2024 included completing the planned capital spending to meet the 2030 facility reduction goals for GHG emissions, water and waste; improving GHG measurement and modeling for product emissions; and identifying technology portfolio opportunities toward progress of product GHG reduction. In 2024, we also initiated a planned midpoint review of our 2030 sustainability goals. This review reflected standard governance practices to ensure our metrics, scope and strategies remain aligned with evolving conditions and our long-term objectives. Our commitment to progress remains steadfast, and we anticipate sharing any updates or adjustments to these goals in 2025.
 The nine goals for 2030 are as follows:
 • Reduce absolute GHG emissions from facilities and operations by 50 percent.
 • Reduce scope three absolute lifetime GHG emissions from newly sold products by 25 percent.
 • Partner with customers to reduce scope three GHG emissions from products in the field by 55 million metric tons.
 • Reduce volatile organic compounds emissions from paint and coating operations by 50 percent.
 • Create a circular lifecycle plan for every part to use less, use better, use again.
 • Generate 25 percent less waste in facilities and operations as percent of revenue.
 • Reuse or responsibly recycle 100 percent of packaging plastics and eliminate single-use plastics in dining facilities, employee amenities and events.
 • Reduce absolute water consumption in facilities and operations by 30 percent.
 • Produce net water benefits that exceed our annual water use in all our regions.
 Our most recent Sustainability Progress Report and previous reports are available on our website at www.cummins.com/company/esg/sustainability-progress-reports. Our annual submission to the Carbon Disclosure Project (CDP) for climate and water is also available on our website. The CDP climate submission provides information on our scenario planning for climate and other risks, as well as detailed emissions data as requested by CDP. We also published a report in accordance with the Task Force on Climate-Related Financial Disclosures framework. These reports are not incorporated into this Form 10-K by reference.
 We continue to articulate our positions on key public policy issues and on a wide range of environmental issues. We are actively engaged around the world to promote science-based climate policies by working with regulatory, industry and other stakeholders, including joining advocacy groups and testifying before legislators and regulators. We will continue to work in partnership with others to advocate for tough, clear and enforceable regulations around the globe to address air and GHG emissions.

 ENVIRONMENTAL COMPLIANCE
 In December 2023, we announced that we reached an agreement in principle with the EPA, CARB, DOJ 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. Subsequent to the second quarter of 2024, we have recorded 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. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements.
 Product Certification and Compliance
 Our products are subject to extensive statutory and regulatory requirements worldwide that directly or indirectly impose standards governing emissions and noise. Over the past several years, we have increased our global environmental compliance presence and expertise to understand and meet emerging product environmental regulations around the world. Our ability to comply with these and future emission standards is an essential element in maintaining our leadership position in regulated markets.
 We strive to be a leader in developing and implementing technologies that provide customers with the highest performing products while minimizing the impact on the environment, and we have a long history of working with governments and regulators to achieve these goals. We remain committed to ensuring our products meet all current and future emission standards and delivering value to our customers.
 Announced in late 2019 and launched in early 2020, the Product Compliance and Regulatory Affairs team leads both engine emissions certification and compliance and regulatory affairs initiatives and provides updates to the SET Committee of the Board at least annually. This organization is led by the Vice President - Product Compliance and Regulatory Affairs and reports directly to the Chief Administrative Officer and the Chief Executive Officer (CEO) for product emissions matters. The focus of this organization is to strengthen our ability to design great products that help our customers win while complying with increasingly challenging global emission regulations. The organization also works to enhance our collaboration with the agencies setting the direction and regulations of emissions as we strive to meet every expectation today while planning for future changes.
 Other Environmental Statutes and Regulations
 Expenditures for environmental control activities and environmental remediation projects at our facilities in the U.S. were not a substantial portion of our annual expenses and are not expected to be material in 2025. We believe we are in compliance in all material respects with laws and regulations applicable to our plants and operations.
 In the U.S., pursuant to notices received from federal and state agencies and/or defendant parties in site environmental contribution actions, we were identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended or similar state laws, at fewer than 20 manufacturing and waste disposal sites.
 Based upon our experiences at similar sites we believe that our aggregate future remediation costs will not be material. We have established accruals that we believe are adequate for our expected future liability with respect to these sites. In addition, we have several other sites where we are working with governmental authorities on remediation projects. The costs for these remediation projects are not expected to be material.

 HUMAN CAPITAL RESOURCES
 At December 31, 2024, we employed approximately 69,600 persons worldwide. Approximately 22,000 of our employees worldwide were represented by various unions under collective bargaining agreements that expire between 2025 and 2029.
 Throughout our more than 100-year history, we have always recognized that people drive the strength of our business and our ability to effectively serve our customers and sustain our competitive position. We are focused on harmonizing our approach to talent to provide seamless opportunities and better experiences to our employees around the world. Our workforce strategy aims to cultivate an environment where all employees, regardless of employee type and location, know what is expected of them, are rewarded for their performance based on fair and equitable reviews, and have access to differentiated experiences, tools and leadership coaching to help them develop. This strategy is anchored on developing authentic and capable leaders, building effective organizations, driving employee engagement, furthering our company values of caring, integrity, excellence, teamwork and diversity and inclusion, delivering quality experiences and providing benefits that advance the well-being of our people and their families.
 Leadership and Talent Development
 Developing our human capital resources is a key focus for us. The Board remains resolute in overseeing this focus and providing guidance to our leadership team, through a committed Talent Management Compensation Committee.
 We strive to create a leadership culture that begins with self-aware and capable leaders creating an environment in which all employees can thrive and reach their full potential. We encourage leaders to connect our people and their work to our mission, vision, values, brand promise and growth strategy, thus, motivating employees and hopefully helping them feel a higher sense of purpose in their contributions.
 We have designed leadership and talent development programs for employees ranging from the manufacturing floor and technicians through to middle management and executives. We are promoting a learning culture by providing employees and their managers with tools and resources to have meaningful development conversations, envision and plan their careers, thrive in their work and navigate in a large global organization. Through our talent strategy, our goal is to provide all employees with equitable access to the development and career opportunities that a global company, like Cummins, enables.
 Competitive Pay and Benefits
 To attract and retain the best employees, we focus on providing progressive, competitive pay and benefits. Our programs target the market for competitiveness and sustainability while ensuring that we honor our core values. We provide benefit programs with the goal of improving the physical, mental, emotional, social and financial wellness of our employees throughout their lifetime. Some examples include base and variable pay, healthcare programs, paid time off, flexible work, retirement saving plans and employee stock purchase plans.
 When designing our base pay ranges, we conduct market analyses to ensure our ranges are competitive and our employees are advancing their earning potential. We also perform annual compensation studies to assess market movement, pay equity and living wages. We review wages globally as we continuously work to ensure we are fair, equitable, competitive and can attract and retain the best talent.
 We also provide an array of benefits as part of our total rewards program that are aligned with our values and focused on supporting employees and their families based on their unique needs, some of which include the following: healthcare plans that are tiered by salary, to ensure affordability to all of our employees; paid parental leave for primary and secondary caregivers; travel benefits and advanced medical services to support complex health care needs; global employee assistance programs; and a global mental health program, all designed to support employees on the journey to well-being.
 Employee Safety and Wellness
 Cummins is committed to being world-class in health and safety. We are committed to removing conditions that cause personal injury or occupational illness, and we make decisions and promote behaviors that protect employees from risk of injury. We publicly disclose metrics on our rate of recordable injuries, our rate of lost workdays due to injury, rate of ergonomic injuries and rate of potentially serious injuries and fatalities.
 Since 2020, we have taken many steps in the employee safety and wellness area including the following:
 • Executed robust safety protocols for essential on-site personnel.
 • Implemented remote and hybrid work environments, where possible, to give employees flexibility to work off-site. As part of this effort, we provide remote ergonomic evaluations and support to help employees create off-site workspaces that are safe.

 • Provided high-quality clinical services at onsite and near-site medical clinics at several locations across the globe to support employee health and well-being.
 • Launched a global mental health campaign to destigmatize and normalize conversations about mental health, promote mental well-being, encourage employees and their families to seek help when needed and promote company-provided resources. This campaign has been extended to include physical, emotional, financial and social pillars of well-being.
 Diversity and Inclusion
 At Cummins, our commitment to inclusion dates back more than a half-century and continues to be core to our fabric and continued success. We leverage the strength of our broadly diverse, global workforce to drive innovation and business results and deliver superior solutions for our customers and communities. We do this through our commitment to fostering an accountable culture that champions our vision of a workforce mirroring the communities we serve. This commitment starts at the top with our Board and permeates throughout our organization as everyone plays a role in nurturing inclusive environments where all employees can reach their full potential and thrive.
 Our strong focus on cultivating an inclusive culture underscores our belief that a diverse and inclusive workforce is a core value and competitive advantage for Cummins. This focus dates back to the early 1970s as reflected in a public statement made by our former Chairman, J. Irwin Miller:
 "Character, ability and intelligence are not concentrated in one sex over the other, nor in persons with certain accents or in certain races or in persons holding degrees from universities over others. When we indulge ourselves in such irrational prejudices, we damage ourselves most of all and ultimately assure ourselves of failure in competition with those more open and less biased."
 Our long-standing commitment to diversity and inclusion is consistent with our commitment to follow the law everywhere, including, without limitation, complying with U.S. and global laws and regulations related to civil rights and anti-discrimination. We believe that we are in compliance with such laws and regulations in all material respects.
 For more information on the topics above and our management of our human capital resources, please go to sustainability.cummins.com. Information from our sustainability report and sustainability webpage is not incorporated by reference into this filing.

 AVAILABLE INFORMATION
 We file annual, quarterly and current reports, proxy statements and other information electronically with the Securities and Exchange Commission (SEC). The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and information statements and other information that Cummins files electronically with the SEC. The SEC's internet site is www.sec.gov.
 Our internet site is www.cummins.com. You can access our Investors and Media webpage through our internet site, by hovering on the heading "Company" and selecting "Investor Relations" link under the "About Us" section. We make available, free of charge, on or through our Investors and Media webpage, our proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934 or the Securities Act of 1933, each, as amended, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
 We also have a Corporate Governance webpage. You can access our Governance Documents webpage through our internet site, www.cummins.com, by hovering on the heading "Company" and selecting "Investor Relations" link under the "About Us" section. Next, click on the heading "Board & ESG" and select "Governance Documents" from the drop-down menu. Code of Conduct, Committee Charters and other governance documents are included at this site. Our Code of Conduct applies to all employees, regardless of their position or the country in which they work. It also applies to the employees of any entity owned or controlled by us. We will post any amendments to the Code of Conduct and any waivers that are required to be disclosed by the rules of either the SEC or the NYSE, on our internet site. The information on our internet site is not incorporated by reference into this report.

 INFORMATION ABOUT OUR EXECUTIVE OFFICERS
 Following are the names and ages of our executive officers, their positions with us at January 31, 2025, and summaries of their backgrounds and business experience:
 Name and Age

 Present Cummins Inc. position and
year appointed to position

 Principal position during the past five years
other than Cummins Inc. position currently held

 Jennifer Rumsey (51)
 Chair and Chief Executive Officer (2023)
 President and Chief Executive Officer (2022-2023)
President and Chief Operating Officer (2021-2022)
Vice President and President—Components (2019-2020)

 Sharon R. Barner (67)

 Vice President—Chief Administrative Officer (2021)
 Vice President—Chief Administrative Officer and Corporate Secretary (2021-2023)
Vice President—General Counsel and Corporate Secretary (2020-2021)
Vice President—General Counsel (2012-2020)

 Marvin Boakye (51)
 Vice President—Chief Human Resources Officer (2022)
 Chief People and Diversity Officer—Papa John's International (2019-2022)

 Jenny M. Bush (50)
 Vice President and President—Power Systems (2022)
 Vice President—Cummins Sales & Service North America (2017-2022)

 Amy R. Davis (55)
 Vice President and President—Accelera and Components (2023)
 Vice President and President—Accelera (2020-2023)
Vice President—Cummins Filtration (2018-2020)

 Bonnie Fetch (54)
 Vice President and President—Distribution Business (2024)
 Vice President—Global Supply Chain and Manufacturing (2022-2023)
Vice President—DBU Supply Chain Services (2020-2022)
Executive Director, Supply Chain—DBU (2018-2020)

 Nicole Y. Lamb-Hale (58)

 Vice President—Chief Legal Officer and Corporate Secretary (2023)
 Vice President—Chief Legal Officer (2022-2023)
Vice President—General Counsel (2021-2022)
Managing Director and Washington, DC City Leader—Kroll (2020-2021)
Managing Director—Kroll (2016-2020)

 Brett Merritt (48)
 Vice President and President—Engine Business (2024)
 Vice President—On-Highway Engine Business and Vice President of Strategic Customer Relations (2023)
Vice President—On-Highway Engine Business (2017-2023)

 Srikanth Padmanabhan (60)
 Executive Vice President and President—Operations (2024)
 Vice President and President—Engine Business (2016-2023)

 Mark A. Smith (57)
 Vice President—Chief Financial Officer (2019)

 Nathan R. Stoner (47)

 Vice President—China ABO (2020)

 General Manager—Partnerships and EBU China Joint Venture Business (2018-2020)

 Jeffrey T. Wiltrout (44)
 Vice President—Corporate Strategy (2022)
 Executive Director—Corporate Development (2021-2022)
Strategy Director—Power Systems Business Unit (2018-2021)

 Jonathan Wood (54)
 Vice President—Chief Technical Offer (2023)
 Vice President—New Power Engineering (2021-2023)
Vice President—Components Engineering (2018-2021)

 Our Chair and CEO is elected annually by the Board and holds office until the meeting of the Board at which her election is next considered. Other officers are appointed by the Chair and CEO, are ratified by the Board and hold office for such period as the Chair and CEO or the Board may prescribe.

 ITEM 1A. Risk Factors
 Set forth below and elsewhere in this Annual Report on Form 10-K are some of the principal risks and uncertainties that could cause our actual business results to differ materially from any forward-looking statements contained in this Report and could individually, or in combination, have a material adverse effect on our results of operations, financial position and cash flows. These risk factors should be considered in addition to our cautionary comments concerning forward-looking statements in this Report, including statements related to markets for our products and trends in our business that involve a number of risks and uncertainties. Our separate section above, "CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION," should be considered in addition to the following statements.
 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. Subsequent to the second quarter of 2024, we recorded 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 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.
 Our products are subject to extensive statutory and regulatory requirements that can significantly increase our costs and, along with increased scrutiny from regulatory agencies and unpredictability in the adoption, implementation and enforcement of increasingly stringent and fragmented emission standards by multiple jurisdictions around the world, could have a material adverse impact on our results of operations, financial condition and cash flows.
 Our engines are subject to extensive statutory and regulatory requirements governing emissions and noise, including standards imposed by the EPA, the EU, state regulatory agencies (such as the CARB) and other regulatory agencies around the world. Regulatory agencies are making certification and compliance with emissions and noise standards more stringent and subjecting diesel engine products to an increasing level of scrutiny. In addition, failure to comply with the terms and conditions of the Settlement Agreements will subject us to stipulated penalties. The discovery of noncompliance issues could have a material adverse impact on our results of operations, financial condition and cash flows.
 Developing engines and components to meet more stringent and continuously changing regulatory requirements, with different implementation timelines and emission requirements, makes developing engines efficiently for multiple markets complicated and could result in substantial additional costs that may be difficult to recover in certain markets. While we have met previous deadlines, our ability to comply with existing and future regulatory standards will be essential for us to maintain our competitive position in the engine applications and industries we serve. The successful development and introduction of new and enhanced products in order to comply with new regulatory requirements are subject to other risks, such as delays in product development, cost over-runs and unanticipated technical and manufacturing difficulties.
 In addition to these risks, the nature and timing of government implementation and enforcement of increasingly stringent emission standards in our worldwide markets are unpredictable and subject to change. Any delays in implementation or enforcement could

 result in a loss of our competitive advantage and could have a material adverse impact on our results of operations, financial condition and cash flows.
 Evolving environmental and climate change legislation and regulatory initiatives may adversely impact our operations, could impact the competitive landscape within our markets and could negatively affect demand for our products.
 Our operations are subject to increasingly stringent environmental laws and regulations in all of the countries in which we operate, including laws and regulations governing air emission, carbon content, discharges to water and the generation, handling, storage, transportation, treatment and disposal of waste materials. For example, in October 2023, the EPA published a final rule imposing reporting and recordkeeping requirements on manufacturers and importers of per- and polyfluoroalkyl substances (PFAS). While we believe that we are in compliance in all material respects with these environmental laws and regulations, there can be no assurance that we will not be adversely impacted by costs, liabilities or claims with respect to existing or subsequently acquired operations, under either present laws and regulations or those that may be adopted or imposed in the future. We are also subject to laws requiring the cleanup of contaminated property. If a release of hazardous substances occurs at or from any of our current or former properties or at a landfill or another location where we have disposed of hazardous materials, we may be held liable for the contamination and the amount of such liability could be material. We may become subject to additional evolving regulations related to the cleanup of contaminated property, such as the EPA's proposal to designate two widely used PFAS as hazardous substances.
 Concern over climate change has resulted in, and could continue to result in, new legal or regulatory requirements including those designed to reduce or mitigate carbon content or the effects of GHG emissions. We may become subject to further additional legislation, regulations or accords regarding climate change, and compliance with new rules could be difficult and costly, including increased capital expenditures. Our failure to successfully comply with any such legislation, regulation or accord could also impact our ability to compete in our markets and decrease demand for our products.
 We operate our business on a global basis and changes in international, national and regional trade laws, regulations and policies affecting and/or restricting international trade could adversely impact the demand for our products and our competitive position.
 We manufacture, sell and service products globally and rely upon a global supply chain to deliver the raw materials, components, systems and parts that we need to manufacture and service our products. Changes in laws, regulations and government policies on foreign trade and investment can affect the demand for our products and services, cause non-U.S. customers to shift preferences toward domestically manufactured or branded products and impact the competitive position of our products or prevent us from being able to sell products in certain countries. Our business benefits from free trade agreements, such as the United States-Mexico-Canada Agreement and the U.S. trade relationships including those with China, Brazil, E.U. and the U.K. More restrictive trade policies, such as efforts to withdraw from or substantially modify such agreements or arrangements, including, without limitation, higher tariffs or new barriers to entry could adversely impact our production costs, customer demand and our relationships with customers and suppliers. Any of these consequences could have a material adverse effect on our results of operations, financial condition and cash flows.
 Embargoes, sanctions and export controls imposed by the U.S. and other governments restricting or prohibiting transactions with certain persons or entities, including financial institutions, to certain countries or regions, or involving certain products, could limit the sales of our products. Embargoes, sanctions and export control laws are changing rapidly for certain geographies, including with respect to China. In particular, changing U.S. export controls and sanctions on China, as well as other restrictions affecting transactions involving China and Chinese parties, could affect our ability to collect receivables, access cash generated in China, provide aftermarket and warranty support for our products, sell products and otherwise impact our reputation and business, any of which could have a material adverse effect on our results of operations, financial condition and cash flows.
 Unanticipated changes in our effective tax rate, the adoption of new tax legislation or exposure to additional income tax liabilities could adversely affect our profitability.
 We are subject to income taxes in the U.S. and numerous international jurisdictions. Our income tax provision and cash tax liability in the future could be adversely affected by the adoption of new tax legislation, changes in earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and the discovery of new information in the course of our tax return preparation process. The carrying value of deferred tax assets, which are predominantly in the U.S., is dependent on our ability to generate future taxable income in the U.S. We are also subject to ongoing tax audits. These audits can involve complex issues, which may require an extended period of time to resolve and can be highly judgmental. Tax authorities may disagree with certain tax reporting positions taken by us and, as a result, assess additional taxes against us. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision. The amounts ultimately paid upon resolution of these or subsequent tax audits could be materially different from the amounts previously included in our income tax provision and, therefore, could have a material impact on our tax provision.

 Our global operations are subject to laws and regulations that impose significant compliance costs and create reputational and legal risk.
 Due to the international scope of our operations, we are subject to additional regulatory frameworks, including a complex system of commercial and trade regulations, around the world. In some cases, foreign regulatory frameworks are more stringent or complex than similar regimes in the United States. Recent years have seen an increase in the development and enforcement of laws regarding trade compliance and anti-corruption, such as the U.S. Foreign Corrupt Practices Act and similar laws from other countries and expected global sustainability regulations, as well as new regulatory requirements regarding data privacy, such as the European Union General Data Protection Regulation. These new and emerging regulations are likely to require significant resources and data management systems and could increase our cost of doing business, restrict our ability to operate our business or execute our strategies, and could result in fines and penalties or reputational harm if we do not fully comply.
 Our numerous foreign subsidiaries, affiliates and joint venture partners are governed by laws, rules and business practices that differ from those of the U.S. The activities of these entities may not comply with U.S. laws or business practices or our Code of Business Conduct. Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business and result in an adverse effect on our reputation, business and results of operations, financial condition and cash flows. We cannot predict the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing laws might be administered or interpreted.
 Future bans or limitations on the use of diesel-powered vehicles or other applications could have a material adverse impact on our business over the long term.
 In an effort to limit GHG emissions and combat climate change, multiple countries and cities have announced that they plan to implement a ban on the use in their countries or cities of diesel-powered products in the near or distant future. These countries include China, India and Germany. In addition, California government officials have called for the state to phase out sales of certain diesel-powered vehicles by 2035. To the extent that these types of bans are actually implemented in the future on a broad basis, or in one or more of our key markets, our diesel business over the long-term could experience material adverse impacts.
 BUSINESS CONDITIONS / DISRUPTIONS
 We are vulnerable to raw material, transportation and labor price fluctuations and supply shortages, which impacted and could continue to impact our results of operations, financial condition and cash flows.
 We continue to experience pockets of supply chain disruptions and related challenges throughout the supply chain. We single source a number of parts and raw materials critical to our business operations. Any delay in our suppliers' deliveries may adversely affect our operations at multiple manufacturing locations, forcing us to seek alternative supply sources to avoid serious disruptions. Delays may be caused by factors affecting our suppliers (including, but not limited to, raw material availability, capacity constraints, port congestion, labor disputes or unrest, shortages of labor, economic downturns, availability of credit, impaired financial condition, sanctions/tariffs, energy inflation/availability, suppliers' allocations to other purchasers, weather emergencies, natural disasters, acts of government or acts of war or terrorism). The effects of climate change, including extreme weather events, long-term changes in temperature levels and water availability may exacerbate these risks. Any extended delay in receiving critical supplies could impair our ability to deliver products to our customers and have a material adverse effect on our results of operations, financial condition and cash flows.
 In addition, the current economic environment has resulted, and may continue to result, in price volatility and increased levels of inflation of many of our raw material, transportation and other costs. In particular, increased levels of inflation, fluctuating interest rates and concerns regarding a potential economic recession may result in increased operating costs and/or decreased levels of profitability. Further, the labor market for skilled manufacturing remains tight, and our labor costs have increased as a result. Material, transportation, labor and other cost inflation has impacted and could continue to impact our results of operations, financial condition and cash flows.
 We face the challenge of accurately aligning our capacity with our demand.
 Our markets are cyclical in nature and we face periods when demand fluctuates significantly higher or lower than our normal operating levels, including variability driven by supply chain inconsistency. Accurately forecasting our expected volumes and appropriately adjusting our capacity are important factors in determining our results of operations and cash flows. We manage our capacity by adjusting our manufacturing workforce, capital expenditures and purchases from suppliers. In periods of weak demand, we may face under-utilized capacity and un-recovered overhead costs, while in periods of strong demand we may experience unplanned costs and could fail to meet customer demand. We cannot guarantee that we will be able to adequately adjust our manufacturing capacity in response to significant changes in customer demand, which could harm our business. If we do not accurately align our manufacturing capabilities with demand it could have a material adverse effect on our results of operations, financial condition and cash flows.

 We derive significant earnings from investees that we do not directly control, with more than 50 percent of these earnings from our China-based investees.
 For 2024, we recognized $395 million of equity, royalty and interest income from investees, compared to $483 million in 2023. In 2024, more than forty percent of our equity, royalty and interest income from investees is from three of our 50 percent owned joint ventures in China - Beijing Foton Cummins Engine Co., Ltd., Dongfeng Cummins Engine Company, Ltd. and Chongqing Cummins Engine Company, Ltd. Although a significant percentage of our net income is derived from these unconsolidated entities, we do not unilaterally control their management or their operations, which puts a substantial portion of our net income at risk from the actions or inactions of these entities. A significant reduction in the level of contribution by these entities to our net income would likely have a material adverse effect on our results of operations and cash flows.
 Our truck manufacturers and OEM customers discontinuing outsourcing their engine supply needs, experiencing financial distress or experiencing a change-in-control of one of our large truck OEM customers, could have a material adverse impact on our results of operations, financial condition and cash flows.
 We recognize significant sales of engines and components to a few large on-highway truck OEM customers which have been an integral part of our positive business results for several years. Many are truck manufacturers or OEMs that manufacture engines for some of their own vehicles. Despite their own engine manufacturing abilities, these customers have historically chosen to outsource certain types of engine production to us due to the quality of our engine products, our emission compliance capabilities, our systems integration, their customers' preferences, their desire for cost reductions, their desire for eliminating production risks and their desire to maintain company focus. However, there can be no assurance that these customers will continue to outsource, or outsource as much of, their engine production in the future. In addition, increased levels of OEM vertical integration could result from a number of factors, such as shifts in our customers' business strategies, acquisition by a customer of another engine manufacturer, the inability of third-party suppliers to meet product specifications and the emergence of low-cost production opportunities in foreign countries. Any significant reduction in the level of engine production outsourcing from our truck manufacturer or OEM customers, financial distress of one of our large truck OEM customers due to a change-in-control, could likely lead to significant reductions in our sales volumes, commercial disputes, receivable collection issues, and other negative consequences that could have a material adverse impact on our results of operations, financial condition and cash flows.
 PRODUCTS AND TECHNOLOGY
 Our products are subject to recall for performance or safety-related issues.
 Our products are subject to recall for performance or safety-related issues. Product recalls subject us to reputational risk, loss of current and future customers, reduced revenue and product recall costs. Product recall costs are incurred when we decide, either voluntarily or involuntarily, to recall a product through a formal campaign to solicit the return of specific products due to known or suspected performance or safety issues. Any significant product recalls could have material adverse effects on our results of operations, financial condition and cash flows. See NOTE 13, "PRODUCT WARRANTY LIABILITY" to our Consolidated Financial Statements for additional information.
 Our products are exposed to variability in material and commodity costs.
 Our businesses establish prices with our customers in accordance with contractual time frames; however, the timing of material and commodity market price increases may prevent us from passing these additional costs on to our customers through timely pricing actions. While we customarily enter into financial transactions and contractual pricing adjustment provisions with our customers that attempt to address some of these risks, there can be no assurance that commodity price fluctuations will not adversely affect our results of operations and cash flows. While the use of commodity price hedging instruments and contractual pricing adjustments may provide us with some protection from adverse fluctuations in commodity prices, by utilizing these instruments, we potentially forego the benefits that might result from favorable fluctuations in price. As a result, higher material and commodity costs, could result in declining margins.
 The development of new technologies may materially reduce the demand for our current products and services.
 We are investing in new products and technologies, including electrolyzers for hydrogen production and electrified power systems and related components and subsystems. Given the early stages of development of some of these new products and technologies, there can be no guarantee of the future market acceptance and investment returns with respect to our planned products, which will face competition from an array of other technologies and manufacturers. The ongoing energy transition away from fossil fuels and the increased adoption of electrified powertrains in some market segments could result in lower demand for current diesel or natural gas engines and components and, over time, reduce the demand for related parts and service revenues from diesel or natural gas powertrains. Furthermore, it is possible that we may not be successful in developing segment-leading electrified or alternate fuel powertrains and some of our existing customers could choose to develop their own, or source from other manufacturers, and any of these factors could have a material adverse impact on our results of operations, financial condition and cash flows.

 Lower-than-anticipated market acceptance of our new or existing products or services could have a material adverse impact on our results of operations, financial condition and cash flows.
 Although we conduct market research before launching new or refreshed engines and introducing new services, many factors both within and outside our control affect the success of new or existing products and services in the marketplace. Offering engines and services that customers desire and value can mitigate the risks of increasing competition and declining demand, but products and services that are perceived to be less than desirable (whether in terms of price, quality, overall value, fuel efficiency or other attributes) can exacerbate these risks. With increased consumer interconnectedness through the internet, social media and other media, mere allegations relating to poor quality, safety, fuel efficiency, corporate responsibility or other key attributes can negatively impact our reputation or market acceptance of our products or services, even if such allegations prove to be inaccurate or unfounded.
 Our business is exposed to potential product liability claims.
 We face an inherent business risk of exposure to product liability claims in the event that our products' failure to perform to specification results, or is alleged to result, in property damage, bodily injury and/or death. At any given time, we are subject to various and multiple product liability claims, any one of which, if decided adversely to us, may have a material adverse effect on our reported results of operation in the period in which our liability with respect to any such claim is recognized. While we maintain insurance coverage with respect to certain product liability claims, we may not be able to obtain such insurance on acceptable terms in the future, if at all, and any such insurance may not provide adequate coverage against product liability claims. In addition, product liability claims can be expensive to defend and can divert the attention of management and other personnel for significant periods of time, regardless of the ultimate outcome. Furthermore, even if we are successful in defending against a claim relating to our products, claims of this nature could cause our customers to lose confidence in our products and us.
 GENERAL
 We may be adversely impacted by the effects of climate change and may incur increased costs and experience other impacts due to new or more stringent climate change regulations, accords, mitigation efforts, GHG regulations or other legislation designed to address climate change.
 The scientific consensus indicates that emissions of GHG continue to alter the composition of Earth's atmosphere in ways that are affecting, and are expected to continue to affect, the global climate. The potential impacts of climate change on our customers, product offerings, operations, facilities and suppliers are accelerating and uncertain, as they will be particular to local and customer-specific circumstances. These potential impacts may include, among other items, physical long-term changes in freshwater availability and the frequency and severity of weather events as well as customer product changes either through preference or regulation.
 Concerns regarding climate change may lead to additional international, national, regional and local legislative and regulatory responses, accords and mitigation efforts. Various stakeholders, including legislators and regulators, shareholders and non-governmental organizations, are continuing to look for ways to reduce GHG emissions, and consumers are increasingly demanding products and services resulting in lower GHG emissions. We could face risks to our brand reputation, investor confidence and market share due to an inability to innovate and develop new products that decrease GHG emissions. Increased input costs, such as fuel, utility, transportation and compliance-related costs could increase our operating costs and negatively impact customer operations and demand for our products. As the impact of any additional future climate related legislative or regulatory requirements on our global businesses and products is dependent on the timing, scope and design of the mandates or standards, we are currently unable to predict its potential impact which could have a material adverse effect on our results of operations, financial condition and cash flows.
 Climate change may exacerbate the frequency and intensity of natural disasters and adverse weather conditions, which may cause disruptions to our operations, including disrupting manufacturing, distribution and our supply chain.
 Our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions, divestitures or exiting the production of certain product lines or product categories may expose us to additional costs and risks.
 Part of our strategic plan is to improve our revenue growth, gross margins and earnings by exploring the repositioning of our portfolio of product line offerings through the pursuit of potential strategic acquisitions, divestitures and/or exiting the production of certain product lines or product categories to provide future strategic, financial and operational benefits and improve shareholder value. There can be no assurance that we will be able to identify suitable candidates or consummate these transactions on favorable terms. The successful identification and completion of any strategic transaction depends on a number of factors that are not entirely within our control, including the availability of suitable candidates and our ability to negotiate terms acceptable to all parties involved, conclude satisfactory agreements and obtain all necessary regulatory approvals. Accordingly, we may not be able to successfully negotiate and complete specific transactions. The exploration, negotiation and consummation of strategic transactions may involve significant expenditures by us, which may adversely affect our results of operations at the time such expenses are incurred, and may divert management's attention from our existing business. Strategic transactions also may have adverse effects on our existing business relationships with suppliers and customers.

If required, the financing for strategic acquisitions could result in an increase in our indebtedness, dilute the interests of our shareholders or both. Any acquisition may not be accretive to us for a significant period of time following the completion of such acquisition. Also, our ability to effectively integrate any potential acquisition into our existing business and culture may not be successful, which could jeopardize future financial and operational performance for the combined businesses. In addition, if an acquisition results in any additional goodwill or increase in other intangible assets on our balance sheet and subsequently becomes impaired, we would be required to record a non-cash impairment charge, which could result in a material adverse effect on our financial condition.
 Similarly, any strategic divestiture of a product line or business or exit of a product line or product category may reduce our revenue and earnings, reduce the diversity of our business, result in material costs and expenses and cause disruption to our employees, customers, vendors and communities in which we operate.
 Our business and operations are subject to interest rate risks and changes in interest rates can reduce demand for our products and increase borrowing costs and result in non-cash charges
 Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our products and our customers' ability to repay obligations to us. Rising interest rates may increase our cost of capital which could have material adverse effects on our financial condition and cash flows. Rising interest rates could also impact certain goodwill assets requiring non-cash impairment charges which could have a material adverse impact on our earnings.
 We operate in challenging markets for talent and may fail to attract, develop and retain key personnel.
 We depend on the skills, institutional knowledge, working relationships, and continued services and contributions of key personnel, including our leadership team and others at all levels of the company, as a critical part of our human capital resources. In addition, our ability to achieve our operating and strategic goals depends on our ability to identify, hire, train and retain qualified individuals. We compete with other companies both within and outside of our industry for talented personnel in a highly competitive labor market, and we may lose key personnel or fail to attract other talented personnel. Any such loss or failure could have material adverse effects on our results of operations, financial condition and cash flows.
 Our IT environment and our products are exposed to potential security breaches or other disruptions which may adversely impact our competitive position, reputation, results of operations, financial condition and cash flows.
 We rely on the capacity, reliability and security of our IT environment and data security infrastructure in connection with various aspects of our business activities. We also rely on our ability to expand and continually update these technologies and related infrastructure in response to the changing needs of our business. As we implement new technologies, they may not perform as expected. We face the challenge of supporting our older technologies and implementing necessary upgrades. In addition, some of these technologies are managed by third-party service providers and are not under our direct control. If we experience a problem with an important technology, including during upgrades and/or new implementations of technologies, the resulting disruptions could have an adverse effect on our business and reputation. As customers adopt and rely on cloud-based digital technologies and services we offer, any disruption of the confidentiality, integrity or availability of those services could have an adverse effect on our business and reputation.
 The data handled by our technologies is vulnerable to security threats. Our operations routinely involve receiving, storing, processing and transmitting sensitive information pertaining to our business, customers, dealers, suppliers, employees and other sensitive matters. As such, our IT environment faces information technology security threats, such as security breaches, computer malware, ransomware attacks and other "cyber attacks," which are increasing in both frequency and sophistication, along with power outages or hardware failures. Increasing use of artificial intelligence may increase these risks. These threats could result in unauthorized public disclosures of information, create financial liability, subject us to legal or regulatory sanctions, disrupt our ability to conduct our business, result in the loss of intellectual property or damage our reputation with customers, dealers, suppliers and other stakeholders. As the result of changing market conditions, a large percentage of our salaried employees continue to work remotely full or part-time. This remote working environment may pose a heightened risk for security breaches or other disruptions of our IT environment.
 In addition, our products, including our engines, contain interconnected and increasingly complex technologies that control various processes and these technologies are potentially subject to "cyber attacks" and disruption. The impact of a significant IT event on either our IT environment or our products could have a material adverse effect on our competitive position, reputation, results of operations, financial condition and cash flows.
 We may use artificial intelligence in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.

 We may incorporate artificial intelligence solutions into our products, services and features, and we may leverage artificial intelligence, including generative artificial intelligence and machine learning, in our product development, operations and software programming. Our competitors or other third parties may incorporate artificial intelligence into their products or operational processes more quickly or more successfully than us, which could have a material adverse effect on our competitive position, reputation and results of operations.
 In addition, there are significant risks involved in developing and deploying artificial intelligence and there can be no assurance that the usage of artificial intelligence will enhance our products or services or be beneficial to our business, including our efficiency or profitability. The rapid evolution of artificial intelligence, including the regulation of artificial intelligence by government or other regulatory agencies, will require significant resources to develop, test and maintain our platforms, offerings, services, and features to implement artificial intelligence ethically and minimize any unintended harmful impacts.
 We are exposed to political, economic and other risks that arise from operating a multinational business. Greater political, economic and social uncertainty and the evolving globalization of businesses could significantly change the dynamics of our competition, customer base and product offerings and impact our growth globally.
 Our business is subject to the political, economic and other risks that are inherent in operating in numerous countries. These risks include:
 • economic and political instability, including international conflicts, war, acts of terrorism or the threat thereof, political or labor unrest, civil unrest, riots, insurrections or trade wars;
 • potential changes to, uncertainty around or repeal of certain environmental laws and regulations, potentially slowing adoption of technologies we are investing in and developing;
 • the difficulty of enforcing agreements and collecting receivables through foreign legal systems;
 • trade protection measures and import or export licensing requirements;
 • the imposition of taxes on foreign income and tax rates in certain foreign countries that exceed those in the U.S.;
 • the imposition of tariffs, exchange controls or other restrictions;
 • difficulty in staffing and managing widespread operations and the application of foreign labor regulations;
 • public health crises, including the spread of a contagious disease, such as future pandemics or epidemics, quarantines or shutdowns related to public health crises, and other catastrophic events;
 • required compliance with a variety of foreign laws and regulations; and
 • changes in general economic and political conditions, including changes in relationship with the U.S., in countries where we operate, particularly in China and emerging markets.
 As we continue to operate and grow our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other related risks. There can be no assurance that the consequences of these and other factors relating to our multinational operations will not have a material adverse effect upon us.
 In addition, there continues to be significant uncertainty about the future relationships between the U.S. and China, including with respect to trade policies, treaties, government regulations and tariffs. Any increased trade barriers or restrictions on global trade, especially trade with China could adversely impact our competitive position, results of operations, financial condition and cash flows.
 We face significant competition in the regions we serve.
 The markets in which we operate are highly competitive. We compete worldwide with a number of other manufacturers and distributors that produce and sell similar products. We primarily compete with diesel engines and related diesel products; however, new technologies continue to be developed for gasoline, natural gas, hydrogen, electrification and other technologies, and we will continue to face new competition from these expanding technologies. Our products primarily compete on the basis of performance, price, total cost of ownership, fuel economy, emissions compliance, speed of delivery, quality and customer support. We also face competitors in some emerging regions who have established local practices and long standing relationships with participants in these markets. Additionally, we face increasing competition to develop innovative products that result in lower emissions. There can be no assurance that our products will be able to compete successfully with the products of other companies and in other markets.

 Increasing global competition among our customers may affect our existing customer relationships and restrict our ability to benefit from some of our customers' growth.
 As our customers in emerging markets continue to grow in size and scope, they are increasingly seeking to export their products to other countries. This has meant greater demand for our advanced engine technologies to help these customers meet the more stringent emissions requirements of developed markets, as well as greater demand for access to our distribution systems for purposes of equipment servicing. As these emerging market customers enter into, and begin to compete in more developed markets, they may increasingly begin to compete with our existing customers in these markets. Our further aid to emerging market customers could adversely affect our relationships with developed market customers. In addition, to the extent the competition does not correspond to overall growth in demand, we may see little or no benefit from this type of expansion by our emerging market customers.
 Failure to meet sustainability expectations or standards, or to achieve our sustainability goals, could adversely affect our business, results of operations and financial condition.
 In recent years, there has been an increased focus from stakeholders on sustainability matters, including GHG emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity, equity and inclusion, responsible sourcing and supply chain, human rights and social responsibility. Given our commitment to certain sustainability principles, we actively manage these issues and have established and publicly announced certain goals, commitments and targets which we may refine, or even expand further, in the future. These goals, commitments and targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Evolving stakeholder expectations and our efforts to manage these issues, report on them and accomplish our goals present numerous operational, regulatory, reputational, financial, legal and other risks, any of which could have a material adverse impact, including on our reputation.
 Such risks and uncertainties include:
 • reputational harm, including damage to our relationships with customers, suppliers, investors, governments or other stakeholders;
 • adverse impacts on our ability to sell and manufacture products;
 • the success of our collaborations with third parties;
 • increased risk of litigation, investigations or regulatory enforcement actions;
 • unfavorable sustainability ratings or investor sentiment;
 • diversion of resources and increased costs to control, assess and report on sustainability metrics;
 • our ability to achieve our goals, commitments and targets within the timeframes announced;
 • access to and increased cost of capital and
 • adverse impacts on our stock price.
 Any failure, or perceived failure, to meet evolving stakeholder expectations and industry standards or achieve our sustainability goals, commitments and targets could have a material adverse effect on our business, results of operations and financial condition.
 We may be adversely impacted by work stoppages and other labor matters.
 At December 31, 2024, we employed approximately 69,600 persons worldwide. Approximately 22,000 of our employees worldwide were represented by various unions under collective bargaining agreements that expire between 2025 and 2029. While we have no reason to believe that we will be materially impacted by work stoppages or other labor matters, there can be no assurance that future issues with our labor unions will be resolved favorably or that we will not encounter future strikes, work stoppages, or other types of conflicts with labor unions or our employees. Any of these consequences may have an adverse effect on us or may limit our flexibility in dealing with our workforce. In addition, many of our customers and suppliers have unionized work forces. Work stoppages or slowdowns experienced by us, our customers or suppliers could result in slowdowns or closures that would have a material adverse effect on our results of operations, financial condition and cash flow.
 We are subject to foreign currency exchange rate and other related risks.
 We conduct operations in many areas of the world involving transactions denominated in a variety of currencies. We are subject to foreign currency exchange rate risk to the extent that our costs are denominated in currencies other than those in which we earn revenues. In addition, since our financial statements are denominated in U.S. dollars, changes in foreign currency exchange rates between the U.S. dollar and other currencies have had, and will continue to have, an impact on our results of operations, financial condition and cash flows.

 We also face risks arising from the imposition of foreign exchange controls and currency devaluations. Foreign exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation. See Management's Discussion and Analysis for additional information.
 Significant declines in future financial and stock market conditions could diminish our pension plan asset performance and adversely impact our results of operations, financial condition and cash flow.
 We sponsor both funded and unfunded domestic and foreign defined benefit pension and other retirement plans. Our pension cost and the required contributions to our pension plans are directly affected by the value of plan assets, the projected and actual rates of return on plan assets and the actuarial assumptions we use to measure our defined benefit pension plan obligations, including the discount rate at which future projected and accumulated pension obligations are discounted to a present value. We could experience increased pension cost due to a combination of factors, including the decreased investment performance of pension plan assets, decreases in the discount rate and changes in our assumptions relating to the expected return on plan assets.
 Significant declines in current and future financial and stock market conditions could cause material losses in our pension plan assets, which could result in increased pension cost in future years and adversely impact our results of operations, financial condition and cash flow. Depending upon the severity and length of market declines and government regulatory changes, we may be legally obligated to make pension payments in the U.S. and perhaps other countries and these contributions could be material.
 We are exposed to risks arising from the price and availability of energy.
 The level of demand for our products and services is influenced in multiple ways by the price and availability of energy. High energy costs generally drive greater demand for better fuel economy in almost all countries in which we operate. Some of our engine products have been developed with a primary purpose of offering fuel economy improvements, and if energy costs decrease or increase less than expected, demand for these products may likewise decrease. The relative unavailability of electricity in some emerging market countries also influences demand for our electricity generating products, such as our diesel generators. If these countries add energy capacity by expanding their power grids at a rate equal to or faster than the growth in demand for energy, the demand for our generating products could also decrease or increase less than would otherwise be the case.

 ITEM 1B. Unresolved Staff Comments
 None.

 ITEM 1C. Cybersecurity
 Material Cybersecurity Risks, Threats and Incidents
 To date, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. Additional information on cybersecurity risks we face is discussed in Part I, Item 1A "Risk Factors" under the heading "General," which should be read in conjunction with the foregoing information.
 Cybersecurity Governance
 We are committed to protecting our IT assets and the data stored within these assets. This commitment includes the protection of cyber assets relevant to our operations, stakeholder data (including employee, customer and supplier data), intellectual property and our products.
 The Enterprise Cybersecurity function, which is responsible for the administration of our enterprise cybersecurity program, is led by the Chief Information Security Officer, who holds a degree in Management Information Systems (MIS) and a Certified Information Security Manager (CISM) designation, and has more than 20 years of IT, cybersecurity, audit and risk management experience in the industrial manufacturing industry. The Chief Information Security Officer reports to our Chief Information Officer. These leaders provide regular updates to the Audit Committee of the Board on cybersecurity risks. Through these updates, the Audit Committee receives a cybersecurity dashboard illustrating cybersecurity priorities and the status of key initiatives.
 The Product Cybersecurity function, which is responsible for the administration of our product cybersecurity program, is led by the Principal Engineer – Product Cybersecurity, who has more than 35 years of embedded electronic systems design experience. The Principal Engineer – Product Cybersecurity works directly with the Chief Technical Officer. These leaders provide regular updates to the SET Committee of the Board on product related cybersecurity risks. Through these updates, the SET Committee receives a report discussing product level vulnerability management, product level incident management and the status of relevant product cybersecurity activities.

 Our processes for oversight of cybersecurity risks are integrated into our Enterprise Risk Management (ERM) program, which is led by the Executive Director, Global Risk. To govern the ERM program, we established an Executive Risk Council that meets regularly to review and monitor our most significant enterprise risks, and our prevention, detection and mitigation plans, including with respect to cybersecurity. The Executive Risk Council is comprised of senior leaders with cross-functional experience and responsibilities.
 Our Board and its committees are engaged in the oversight of our most significant enterprise risks, including cybersecurity risks. We assign a member of our executive management team to report material information to our Board regarding these risks. The Audit Committee, working with the Chief Information Officer, provides oversight of the enterprise cybersecurity program. The SET Committee, working with the Chief Technical Officer, provides oversight of the product cybersecurity program.
 Our Board, Audit Committee and SET Committee receive reports and information from our senior leaders who have functional responsibility for the mitigation of enterprise cybersecurity and product cybersecurity risks. These leaders meet with the committees on a regular basis and provide dashboards or reports, which summarize cybersecurity risks and action plans. The committees elevate matters to the Board as appropriate.
 Cybersecurity Risk Management and Strategy
 We have an Enterprise Cybersecurity Management Review Group (Enterprise Cybersecurity MRG), which functions as a steering committee to provide oversight and strategic direction for the enterprise cybersecurity program. The Enterprise Cybersecurity MRG is comprised of senior leaders with cross-functional experience and responsibilities. This MRG meets regularly with our Chief Information Security Officer to review the enterprise cybersecurity program and related risks. The MRG receives updates on the status of key cybersecurity initiatives and is responsible for our response to material cybersecurity incidents. For material cybersecurity incidents, our process is to escalate through the MRG to the Audit Committee and Board.
 We have a Product Cybersecurity Management Review Group (Product Cybersecurity MRG), which functions as a steering committee to provide oversight and strategic direction for the product cybersecurity program. The Product Cybersecurity MRG is comprised of senior leaders with cross-functional experience and responsibilities. The Product Cybersecurity MRG meets regularly with the Principal Engineer – Product Cybersecurity to review the product cybersecurity program, including risks and the status of key initiatives.
 Both the Enterprise and Product Cybersecurity functions administer policies related to cybersecurity in consultation with other stakeholders at the company. Our risk-based cybersecurity program is designed to protect, detect, and respond to cybersecurity threats and incidents. This program, developed alongside the National Institute of Standards and Technology Cybersecurity Framework, aims to protect the confidentiality, integrity, and availability of our IT assets and the data stored thereon. We also have a third-party risk management process, which is designed to assess and manage cybersecurity risks posed by third parties. This process is administered by the Enterprise Cybersecurity function, and through this program, the company evaluates the type of data that is shared with certain vendors with the goal of conducting risk-informed assessments. These assessments provide insights which the Enterprise Cybersecurity function uses to better manage third-party risks.
 A cybersecurity operations team is in place to regularly monitor the environment for cybersecurity threats and incidents. We have incident response plans to assess and manage cybersecurity incidents. These plans include escalation procedures based on the nature and severity of the incident. The most critical incidents, which could be material to us, are escalated to executive management and the Enterprise Cybersecurity MRG. In addition, cyber insurance is in place, which may mitigate the impact of cybersecurity incidents.
 We engage outside experts where appropriate to aid in maturing, implementing and testing the cybersecurity program and to review our cybersecurity operations. This includes incident response testing through tabletop exercises facilitated by external consultants. We have implemented training and awareness programs to educate our employees on cybersecurity risks, which includes regular educational phishing campaigns, and our Internal Audit function performs regular assessments of the design and operational effectiveness of the program's key processes and controls. We will continue to develop and mature our cybersecurity operations to respond to the dynamic cybersecurity landscape.

 ITEM 2. Properties
 Manufacturing Facilities
 Our principal manufacturing facilities by segment are as follows:

 Segment

 U.S. Facilities

 Facilities Outside the U.S.

 Indiana: Columbus

 Brazil: Sao Paulo

 New York: Lakewood

 India: Phaltan

 North Carolina: Whitakers

 Mexico: San Luis Potosi

 U.K.: Darlington

 Indiana: Columbus

 Brazil: Sao Paulo

 North Carolina: Fletcher, Laurinburg

 China: Wuxi

 South Carolina: Charleston, York

 India: Phaltan

 Wisconsin: Mineral Point

 Italy: Cameri

 Mexico: Ciudad Juarez, Monterrey, San Luis Potosi

 Netherlands: Roermond

 Sweden: Lindesberg

 U.K.: Darlington, Huddersfield

 Indiana: Elkhart, Seymour

 Brazil: Sao Paulo

 Minnesota: Fridley

 China: Wuhan, Wuxi

 New Mexico: Clovis

 India: Ahmednagar, Phaltan, Pune, Ranjangaon

 Wisconsin: Kenosha

 Mexico: San Luis Potosi

 Romania: Craiova

 U.K.: Daventry

 Indiana: Columbus

 Belgium: Oevel

 Minnesota: Fridley

 Canada: Mississauga

 North Carolina: Asheville, Forest City

 China: Shanghai, Tianjin

 Germany: Herten

 Spain: Guadalajara

 In addition, engines and engine components are manufactured by joint ventures or independent licensees at manufacturing plants in the U.S., China, India, Japan, Sweden, U.K. and Mexico.

 Distribution Facilities
 The principal distribution facilities that serve our segments are as follows:

 U.S. Facilities

 Facilities Outside the U.S.

 Arizona: Avondale

 Australia: Mackay, Perth

 Colorado: Henderson

 Canada: Fort McMurray AB

 Kentucky: Florence (1)

 China: Beijing

 New Jersey: Kearny

 India: Pune

 Texas: Dallas

 South Africa: Johannesburg

 Utah: West Valley City

 U.K.: Wellingborough

 (1) Florence is a Components distribution facility.

 Supply Chain Facilities
 The principal supply chain facilities that serve our segments are as follows:

 U.S. Facilities

 Facilities Outside the U.S.

 Georgia: Atlanta

 Belgium: Rumst

 Indiana: Columbus, Indianapolis

 Brazil: Guarulhos

 Kentucky: Walton

 China: Beijing, Shanghai, Wuhan

 North Carolina: Enfield

 India: Phaltan, Pithampur, Pune

 Oregon: Portland

 Mexico: Juarez, San Luis Potosi

 Pennsylvania: Harrisburg

 Singapore: Pandan Avenue

 South Carolina: Charleston

 U.K.: Darlington, Daventry

 Tennessee: Memphis

 Texas: Dallas

 Other Facilities
 We operate numerous management, research and development, marketing and administrative facilities globally.

 ITEM 3. Legal Proceedings
 The matters described under "Legal Proceedings" in NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements are incorporated herein by reference.

 ITEM 4. Mine Safety Disclosures
 Not Applicable.

 ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 Our common stock is listed on the NYSE under the symbol "CMI." For other matters related to our common stock and shareholders' equity, see NOTE 15, "CUMMINS INC. SHAREHOLDERS' EQUITY," to our Consolidated Financial Statements.
 At December 31, 2024, there were 2,253 holders of record of Cummins Inc.'s $2.50 par value common stock.

 The following information is provided pursuant to Item 703 of Regulation S-K:

 Issuer Purchases of Equity Securities

 Period
 Total
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)

 October 1 - October 31
 —
 $
 —
 —
 $
 2,218

 November 1 - November 30
 —
 —
 —
 2,218

 December 1 - December 31
 —
 —
 —
 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 December 31, 2024, we did not make any repurchases of common stock. The dollar value remaining available for future purchases under the 2019 program at December 31, 2024, was $218 million.
 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.

 Performance Graph (Unaudited)
 The following Performance Graph and related information shall not be deemed "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any of our future filings under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
 The following graph compares the cumulative total shareholder return on our common stock for the last five years with the cumulative total return on the S&P 500 Index and an index of peer companies selected by us. In 2024, we re-evaluated our peer group that the Board benchmarks against and chose to remove companies that we no longer believe participate in similar end-markets or are strongly aligned with our businesses. We removed W.W. Grainger since they are primarily U.S. focused and Fortive Corporation due to a spin-off transaction that shrank the size of their business. Our peer group includes BorgWarner Inc., Caterpillar, Inc., Daimler Truck Holding AG, Dana Inc., Deere & Company, Eaton Corporation, Emerson Electric Co., Honeywell International, Illinois Tool Works Inc., PACCAR, Parker-Hannifin Corporation, Textron Inc. and Volvo AB. Daimler Truck Holding AG is excluded from the peer index in the following graph due to the corporate split and public filing in December 2021. Each of the measures of cumulative total return assumes reinvestment of dividends. The comparisons in this table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our stock.

 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
 AMONG CUMMINS INC., S&P 500 INDEX AND CUSTOM PEER GROUP

 ASSUMES $100 INVESTED ON DECEMBER 31, 2019
 ASSUMES DIVIDENDS REINVESTED
 FISCAL YEAR ENDING DECEMBER 31, 2024

 ITEM 6. [Reserved]

 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
 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 Consolidated Financial Statements and the accompanying notes to those financial statements. Our MD&A is presented in the following sections:
 • EXECUTIVE SUMMARY AND FINANCIAL HIGHLIGHTS
 • RESULTS OF OPERATIONS
 • OPERATING SEGMENT RESULTS
 •2025 OUTLOOK
 • LIQUIDITY AND CAPITAL RESOURCES
 • APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
 • RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 The following is the discussion and analysis of changes in the financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023. The discussion and analysis of fiscal year 2022 and changes in the financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022, that are not included in this Form 10-K, may be found in Part II, ITEM 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC) on February 12, 2024.

 EXECUTIVE SUMMARY AND FINANCIAL HIGHLIGHTS
 Overview
 We are a global power solutions leader comprised of five business segments - Engine, Components, 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, electrified power systems with innovative components and subsystems, including battery, fuel cell and electric power technologies and hydrogen production technologies. 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 650 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 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 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 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, maintaining relationships with various OEMs throughout the world and providing selected sales and aftermarket support for our Accelera business. The Power Systems segment is an integrated power provider, which designs, manufactures and sells standby and prime power generators, engines (16 liters and larger) for standby and prime power generator sets and industrial applications (including mining, oil and gas, marine, rail and defense), alternators and other power components. The Accelera segment designs, manufactures, sells and supports electrified power systems with innovative components and subsystems, including battery, fuel cell and electric powertrain technologies as well as hydrogen production technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of electrified power systems and related components and subsystems and our electrolyzers for hydrogen production. 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 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.
 Accelera Strategic Reorganization Actions
 In the fourth quarter of 2024, our Accelera segment underwent a strategic review to better streamline operations as well as pace and re-focus investments on the most promising paths as the adoption of certain zero emission solutions slows. This review resulted in decisions to consolidate certain manufacturing efforts, focus internal development efforts towards areas of differentiation while continuing to leverage partners and reduce our investments in certain technologies, joint ventures and markets. In addition, declining customer demand in certain key product lines caused us to re-evaluate the recoverability of certain inventory items. As a result of these actions, we recorded several charges in the fourth quarter related to inventory write-downs, intangible and fixed asset impairments and joint venture impairments. Total charges for these strategic reorganization actions were $312 million. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.
 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 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.
 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 (DOJ) 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). 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. In the second quarter of 2024, we made $1.9 billion of payments required by the Settlement Agreements. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.
 2024 Results
 A summary of our results is as follows:

 In millions, except per share amounts
 2024
 (1)

 2023
 (2)

 2022

 Net sales
 $
 $
 $

 Net income attributable to Cummins Inc.
 3,946
 2,151

 Earnings per common share attributable to Cummins Inc.

 Basic
 $
 28.55
 $
 5.19
 $
 15.20

 Diluted
 28.37
 5.15
 15.12

 (1) Net income and earnings per common share included the $1.3 billion non-taxable gain associated with the divestiture of Atmus for the year ended December 31, 2024. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.

 (2) Net income and earnings per common share included a $2.0 billion charge related to the Settlement Agreements for the year ended December 31, 2023. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.

 Net income attributable to Cummins Inc. for 2024 was $3.9 billion, or $28.37 per diluted share, on sales of $34.1 billion, compared to 2023 net income attributable to Cummins Inc. of $0.7 billion, or $5.15 per diluted share, on sales of $34.1 billion. The increases in net income attributable to Cummins Inc. and earnings per diluted share were driven by the absence of the $2.0 billion charge related to the Settlement Agreements in 2023 and the $1.3 billion gain recognized on the divestiture of Atmus in 2024. Diluted earnings per common share for 2024 benefited $0.87 per share from fewer weighted-average shares outstanding due to treasury shares reacquired in the Atmus divestiture.
 The table below presents our consolidated net sales by geographic area based on the location of the customer:

 2024
 2023
 2022

 United States and Canada
 $
 20,820
 $
 20,650
 $
 16,869
 $
 %
 $
 3,781
 %

 International
 13,282
 13,415
 11,205
 (133)
 (1)
 %
 2,210
 %

 Total net sales
 $
 $
 $
 $
 —
 %
 $
 5,991
 %

 Worldwide revenues were flat in 2024 compared to 2023, as increased global power generation demand (mostly data center markets) and higher demand in North American medium-duty truck and bus markets were offset by the divestiture of Atmus, lower emission solutions demand (mainly in China), lower demand in North American heavy-duty truck and pick-up truck markets and weaker demand in global construction markets. Net sales in the U.S. and Canada improved by 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 and lower demand in North American pick-up truck and heavy-duty truck markets. International sales (excludes the U.S. and Canada) declined by 1 percent, primarily due to lower sales in China and Europe which 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, China, Asia Pacific and India). Unfavorable foreign currency fluctuations impacted international sales by 1 percent (mainly the Brazilian real and Chinese renminbi).
 The following table contains sales and EBITDA (defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests) by operating segment for the years ended December 31, 2024 and 2023. See NOTE 25, "OPERATING SEGMENTS," to our Consolidated Financial Statements for additional information and a reconciliation of our segment information to the corresponding amounts in our Consolidated Statements of Net Income.

 Operating Segments

 2024
 2023
 Percent change

of Total

of Total

 Sales
 EBITDA
 Sales
 EBITDA
 Sales
 EBITDA

 $
 11,712
 %
 $
 1,653
 $
 11,684
 %
 $
 1,630
 —
 %
 %

 11,679
 %
 1,591
 13,409
 %
 1,840
 (13)
 %
 (14)
 %

 Distribution
 %
 1,378
 %
 1,209
 %
 %

 6,408
 %
 1,180
 5,673
 %
 %
 %

 %
 (764)
 (1)

 %
 (443)
 %
 (72)
 %

 Total segments
 41,597
 %
 5,038
 41,369
 %
 5,072
 %
 (1)
 %

 Intersegment eliminations
 (7,495)
 1,288
 (2)

 (7,304)
 (2,055)
 (3)

 %
 NM

 Total
 $
 $
 6,326
 (2)

 $
 $
 3,017
 (3)

 —
 %
 NM

 (1) Accelera EBITDA included $312 million of strategic reorganization action charges in the fourth quarter of 2024. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.

 (2) Intersegment eliminations and total EBITDA included a $1.3 billion gain recognized on the divestiture of Atmus, and total EBITDA included $35 million of costs associated with the divestiture of Atmus. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.

 (3) Intersegment eliminations and total EBITDA included a $2.0 billion charge related to the Settlement Agreements, and total EBITDA included $100 million of costs associated with the divestiture of Atmus. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.

 2024 Highlights
 We generated $1.5 billion of operating cash flows in 2024, compared to $4.0 billion 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 December 31, 2024, was 38.4 percent, compared to 40.3 percent at December 31, 2023. The decrease was primarily due to the increased equity balance from stronger earnings since December 31, 2023, partially offset by higher debt balances at December 31, 2024. At December 31, 2024, we had $2.3 billion in cash and marketable securities on hand and access to our $4.0 billion credit facilities (net of $1.3 billion commercial paper outstanding), if necessary, to meet working capital, investment, acquisition and funding needs.
 In November 2024, we settled a portion of our interest rate swaps related to our 2025 and 2030 bonds with a combined notional amount of $135 million. In the second and third quarters of 2024, we settled the remaining $500 million of interest rate swaps associated with the term loan, due in 2025, and repaid the outstanding balance of the term loan. See NOTE 12, "DEBT," and NOTE 20, "DERIVATIVES," to our 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 5-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 5-year credit agreement that would have matured on August 18, 2026. We also 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. See NOTE 12, "DEBT," to our Consolidated Financial Statements for additional information.
 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, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES," to our 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 14, "COMMITMENTS AND CONTINGENCIES," to our 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 12, "DEBT," to our Consolidated Financial Statements for additional information.
 In 2024, the investment gain on our U.S. pension trusts was 5.5 percent, while our U.K. pension trusts' loss was 9.6 percent. Our global pension plans, including our unfunded and non-qualified plans, were 115 percent funded at December 31, 2024. Our U.S. defined benefit plans (qualified and non-qualified), which represented approximately 70 percent of the worldwide pension obligation, were 117 percent funded, and our U.K. defined benefit plans were 109 percent funded at December 31, 2024. We expect to contribute approximately $52 million in cash to our global pension plans in 2025. In addition, we expect our 2025 net periodic pension cost to approximate $76 million. See "APPLICATION OF CRITICAL ACCOUNTING ESTIMATES" and NOTE 10, "PENSIONS AND OTHER POSTRETIREMENT BENEFITS," to our Consolidated Financial Statements for additional information concerning our pension and other postretirement benefit plans.
 As of the date of this filing, our credit ratings and outlooks from the credit rating agencies remain unchanged.

 RESULTS OF OPERATIONS

 In millions (except per share amounts)
 2024
 2023
 2022

 NET SALES
 $
 $
 $
 $
 —
 %
 $
 5,991
 %

 Cost of sales
 25,663
 25,816
 21,355
 %
 (4,461)
 (21)
 %

 GROSS MARGIN
 8,439
 8,249
 6,719
 %
 1,530
 %

 OPERATING EXPENSES AND INCOME

 Selling, general and administrative expenses
 3,275
 3,333
 2,687
 %
 (646)
 (24)
 %

 1,463
 1,500
 1,278
 %
 (222)
 (17)
 %

 (88)
 (18)
 %
 %

 2,138
 1,792
 %
 (1,964)
 NM

 OPERATING INCOME
 3,750
 1,761
 2,929
 1,989
 NM
 (1,168)
 (40)
 %

 Interest expense
 %
 (176)
 (88)
 %

 Other income, net
 1,523
 1,283
 NM
 NM

 INCOME BEFORE INCOME TAXES
 4,903
 1,626
 2,819
 3,277
 NM
 (1,193)
 (42)
 %

 Income tax expense
 (49)
 (6)
 %
 (150)
 (24)
 %

 CONSOLIDATED NET INCOME
 4,068
 2,183
 3,228
 NM
 (1,343)
 (62)
 %

 Less: Net income attributable to noncontrolling interests
 (17)
 (16)
 %
 (73)
 NM

 NET INCOME ATTRIBUTABLE TO CUMMINS INC.

 $
 3,946
 $
 $
 2,151
 $
 3,211
 NM
 $
 (1,416)
 (66)
 %

 Diluted earnings per common share attributable to Cummins Inc.
 $
 28.37
 $
 5.15
 $
 15.12
 $
 23.22
 NM
 $
 (9.97)
 (66)
 %

 Favorable/(Unfavorable) Percentage Points

 Percent of sales
 2024
 2023
 2022

 Gross margin
 24.7
 %
 24.2
 %
 23.9
 %
 0.5
 0.3

 Selling, general and administrative expenses
 9.6
 %
 9.8
 %
 9.6
 %
 0.2
 (0.2)

 4.3
 %
 4.4
 %
 4.6
 %
 0.1
 0.2

 Net Sales
 Net sales increased $37 million, primarily driven by the following:
 • Distribution segment sales increased 11 percent primarily due to higher demand in power generation markets, especially in North America and Europe.
 • Power Systems segment sales increased 13 percent primarily due to higher demand in power generation markets, especially in North America and China.
 • Engine segment sales were flat as stronger demand in North American medium-duty truck markets was offset by lower demand in North American pick-up truck and heavy-duty truck markets and weaker demand in global construction markets.
 These increases were partially offset by decreased Components segment sales of 13 percent mainly due to the divestiture of Atmus on March 18, 2024.
 Sales to international markets (excluding the U.S. and Canada), based on location of customers, were 39 percent of total net sales in 2024, compared with 39 percent of total net sales 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. Cost of sales in 2024 included $112 million of inventory write-downs and severance in our Accelera segment. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.
 Gross Margin
 Gross margin increased $190 million and increased 0.5 points as a percentage of sales. The increases were mainly due to favorable pricing and higher volumes, partially offset by the divestiture of Atmus, higher compensation expenses and increased product coverage. The provision for base warranties issued as a percentage of sales was 1.9 percent in 2024 and 1.8 percent in 2023.
 Selling, General and Administrative Expenses
 Selling, general and administrative expenses decreased $58 million and decreased 0.2 points as a percentage of sales. The decreases were primarily due to lower compensation expenses. Compensation and related expenses include salaries, fringe benefits and variable compensation.
 Research, Development and Engineering Expenses
 Research, development and engineering expenses decreased $37 million and decreased 0.1 points as a percentage of sales. The decreases were mainly due to lower spending on prototypes and decreased compensation expenses. Compensation and related expenses include 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 electrified power systems with innovative components and systems including battery and electric power technologies and hydrogen production technologies.
 Equity, Royalty and Interest Income From Investees
 Equity, royalty and interest income from investees decreased $88 million, primarily due to lower royalty and interest income from investees, start-up costs at Amplify Cell Technologies LLC, the absence of earnings from joint ventures associated with the divestiture of Atmus and $17 million of write-downs related to the Accelera segment, partially offset by higher earnings at Chongqing Cummins Engine Co., Ltd. See NOTE 3, "INVESTMENTS IN EQUITY INVESTEES," and NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.
 Other Operating Expense, Net
 Other operating expense, net was as follows:

 2024
 2023

 Accelera strategic reorganization actions (1)

 $
 (171)
 $
 —

 Amortization of intangible assets
 (129)
 (133)

 Loss on write-off of assets
 (17)
 (9)

 Flood damage expenses
 (10)
 —

 Royalty income, net

 Settlement Agreements (2)

 —
 (2,036)

 (27)

 Total other operating expense, net
 $
 (346)
 $
 (2,138)

 (1) See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.

 (2) See NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.

 Interest Expense
 Interest expense decreased $5 million, primarily due to lower average debt balances.
 Other Income, Net
 Other income, net was as follows:

 2024
 2023

 Gain related to divestiture of Atmus (1)

 $
 1,333
 $
 —

 Non-service pension and OPEB income

 Gain on sale of marketable securities, net

 Gain on corporate-owned life insurance

 Foreign currency loss, net
 (41)
 (30)

 Total other income, net
 $
 1,523
 $

 (1) See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.

 Income Tax Expense
 Our effective tax rate for 2024 was 17.0 percent compared to 48.3 percent for 2023.
 The year ended December 31, 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 $59 million, primarily due to $52 million of favorable return to provision adjustments, $22 million of favorable share-based compensation tax benefits, $21 million of favorable adjustments related to audit settlements and $20 million of favorable adjustments from tax return amendments, partially offset by $50 million of unfavorable adjustments related to Accelera strategic reorganization actions and a net $6 million of other unfavorable adjustments. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," and NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS" to our Consolidated Financial Statements for additional information.
 The year ended December 31, 2023, contained unfavorable net discrete items of $397 million, primarily due to $398 million in the fourth quarter related to the $2.0 billion charge from the Settlement Agreements, $22 million of unfavorable adjustments for uncertain tax positions and $3 million of net unfavorable other discrete tax items, partially offset by $21 million of favorable return to provision adjustments and $5 million of favorable share-based compensation tax benefits.
 The change in the effective tax rate for the year ended December 31, 2024, versus year ended December 31, 2023, was primarily due to the absence of the Settlement Agreements charge and the non-taxable gain on the Atmus split-off.
 Our effective tax rate for 2025 is expected to approximate 24.5 percent, excluding any discrete tax items that may arise.
 Net Income Attributable to 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 increased $17 million principally 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.
 For all prior year segment results comparisons to 2022 see the Results of Operations section of our 2023 Form 10-K.

 Comprehensive Income - Foreign Currency Translation Adjustment
 The foreign currency translation adjustment was a net loss of $276 million and net gain of $92 million for the years ended December 31, 2024 and 2023, respectively. The details were as follows:

 2024
 2023

 Translation adjustment
 Primary currency driver vs. U.S. dollar
 Translation adjustment
 Primary currency driver vs. U.S. dollar

 Wholly-owned subsidiaries
 $
 (245)
 Brazilian real, Chinese renminbi, Euro and Indian rupee
 $
 British pound and Brazilian real, partially offset by Chinese renminbi

 Equity method investments
 (15)
 Chinese renminbi and Brazilian real, partially offset by Indian rupee
 (23)
 Chinese renminbi, partially offset by Brazilian real

 Consolidated subsidiaries with a noncontrolling interest
 (16)
 Indian rupee
 (3)
 Chinese renminbi

 Total
 $
 (276)
 $

 For all prior year foreign currency translation adjustment results comparisons to 2022 see the Results of Operations section of our 2023 Form 10-K.

 OPERATING SEGMENT RESULTS
 Our reportable operating segments consist of the Engine, Components, 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 25, "OPERATING SEGMENTS," to our Consolidated Financial Statements for additional information and a reconciliation of our segment information to the corresponding amounts in our Consolidated Statements of Net Income.

 Following is a discussion of results for each of our operating segments. For all prior year segment results comparisons to 2022 see the Results of Operations section of our 2023 Form 10-K.
 Engine Segment Results
 Financial data for the Engine segment was as follows:

 2024
 2023
 2022

 $
 8,987
 $
 8,874
 $
 8,199
 $
 %
 $
 %

 2,725
 2,810
 2,746
 (85)
 (3)
 %
 %

 11,712
 11,684
 10,945
 —
 %
 %

 (2)
 —
 %
 (108)
 (21)
 %

 (1)

 (39)
 (16)
 %
 %

 (2)
 (11)
 %
 %

 Russian suspension costs

 —
 —
 (2)

 —
 —
 %
 %

 1,653
 1,630
 1,535
 %
 %

 Segment EBITDA as a percentage of total sales
 14.1
 %
 14.0
 %
 14.0
 %
 0.1
 —

 (1) Included a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the indefinite suspension of our Russian operations. See NOTE 24, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.

 (2) Included $31 million of Russian suspension costs reflected in the equity, royalty and interest income from investees line above. See NOTE 24, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.

 Sales for our Engine segment by market were as follows:

 2024
 2023
 2022

 Heavy-duty truck
 $
 4,244
 $
 4,399
 $
 3,847
 $
 (155)
 (4)
 %
 $
 %

 Medium-duty truck and bus
 4,166
 3,670
 3,460
 %
 %

 Light-duty automotive
 1,595
 1,762
 1,738
 (167)
 (9)
 %
 %

 Total on-highway
 10,005
 9,831
 9,045
 %
 %

 Off-highway
 1,707
 1,853
 1,900
 (146)
 (8)
 %
 (47)
 (2)
 %

 $
 11,712
 $
 11,684
 $
 10,945
 $
 —
 %
 $
 %

 On-highway sales as percentage of total sales
 %
 %
 %

 Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:

 2024
 2023
 2022

 Heavy-duty
 132,900
 141,900
 120,700
 (9,000)
 (6)
 %
 21,200
 %

 Medium-duty
 310,300
 294,100
 283,600
 16,200
 %
 10,500
 %

 Light-duty
 189,400
 211,500
 227,600
 (22,100)
 (10)
 %
 (16,100)
 (7)
 %

 Total unit shipments
 632,600
 647,500
 631,900
 (14,900)
 (2)
 %
 15,600
 %

 Sales
 Engine segment sales increased $28 million. The primary driver by market was an increase in medium-duty truck and bus sales of $496 million mainly due to higher demand, especially in North America with medium-duty truck engine shipments up 16 percent, and favorable pricing.
 The increase was partially offset by the following:
 • Light-duty automotive sales decreased $167 million primarily due to lower demand in North American pick-up truck markets with shipments down 15 percent, partially offset by favorable pricing.
 • Heavy-duty truck sales decreased $155 million principally due to weaker demand in North America with shipments down 8 percent.
 • Off-highway sales decreased $146 million primarily due to lower demand in global construction markets, especially in China and Western Europe.
 Engine segment EBITDA increased $23 million, primarily due to favorable pricing, partially offset by lower volumes, increased product coverage, higher compensation expenses, higher supply chain related costs and lower joint venture technology fees.

 Components Segment Results
 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 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.
 Financial data for the Components segment was as follows:

 2024
 2023
 2022

 $
 9,894
 $
 11,531
 $
 7,847
 $
 (1,637)
 (14)
 %
 $
 3,684
 %

 1,785
 1,878
 1,889
 (93)
 (5)
 %
 (11)
 (1)
 %

 11,679
 13,409
 9,736
 (1,730)
 (13)
 %
 3,673
 %

 %
 (78)
 (25)
 %

 (33)
 (34)
 %
 %

 (6)
 (19)
 %
 NM

 Russian suspension costs (1)

 —
 —
 —
 —
 %
 %

 1,591
 (2)

 1,840
 (2)

 1,346
 (3)

 (249)
 (14)
 %
 %

 Segment EBITDA as a percentage of total sales
 13.6
 %
 13.7
 %
 13.8
 %

 (0.1)
 (0.1)

 (1) See NOTE 24, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.

 (2) Included $21 million and $78 million of costs associated with the divestiture of Atmus for the years ended December 31, 2024 and 2023, respectively.

 (3) Included $83 million of costs related to the acquisition and integration of Meritor and $28 million of costs associated with the divestiture of Atmus.

 Beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment leader 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:

 2024
 2023
 2022

 Drivetrain and braking systems
 $
 4,733
 $
 4,822
 $
 1,879
 $
 (89)
 (2)
 %
 $
 2,943
 NM

 Emission solutions
 3,601
 3,835
 3,494
 (234)
 (6)
 %
 %

 Components and software
 2,404
 2,409
 2,213
 (5)
 —
 %
 %

 Automated transmissions
 (126)
 (18)
 %
 %

 Atmus
 (1)

 1,629
 1,557
 (1,276)
 (78)
 %
 %

 $
 11,679
 $
 13,409
 $
 9,736
 $
 (1,730)
 (13)
 %
 $
 3,673
 %

 (1) Included sales through the March 18, 2024, divestiture.

 Sales
 Components segment sales decreased $1.7 billion across all businesses. The following were the primary drivers by business:
 • Sales decreased $1.3 billion due to the Atmus divestiture on March 18, 2024.
 • Emission solutions sales decreased $234 million principally due to lower demand in China.
 Components segment EBITDA decreased $249 million, primarily due to the divestiture of Atmus.

 Distribution Segment Results
 Financial data for the Distribution segment was as follows:

 2024
 2023
 2022

 $
 11,352
 $
 10,199
 $
 8,901
 $
 1,153
 %
 $
 1,298
 %

 (18)
 (36)
 %
 %

 8,929
 1,135
 %
 1,320
 %

 %
 (5)
 (10)
 %

 (7)
 (7)
 %
 %

 %
 NM

 Russian suspension costs (1)

 —
 —
 —
 —
 %
 %

 1,378
 1,209
 %
 %

 Segment EBITDA as a percentage of total sales
 12.1
 %
 11.8
 %
 9.9
 %
 0.3
 1.9

 (1) See NOTE 24, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.

 Sales for our Distribution segment by region, were as follows:

 2024
 2023
 2022

 North America
 $
 7,625
 $
 7,081
 $
 5,948
 $
 %
 $
 1,133
 %

 Asia Pacific
 1,245
 1,096
 1,016
 %
 %

 Europe
 1,184
 %
 (76)
 (8)
 %

 China
 %
 %

 India
 %
 %

 Africa and Middle East
 (26)
 (9)
 %
 %

 Latin America
 %
 %

 $
 $
 $
 8,929
 $
 1,135
 %
 $
 1,320
 %

 Sales for our Distribution segment by product line were as follows:

 2024
 2023
 2022

 Parts
 $
 3,980
 $
 4,071
 $
 3,818
 $
 (91)
 (2)
 %
 $
 %

 Power generation
 3,972
 2,509
 1,774
 1,463
 %
 %

 Service
 1,753
 1,672
 1,561
 %
 %

 Engines
 1,679
 1,997
 1,776
 (318)
 (16)
 %
 %

 $
 $
 $
 8,929
 $
 1,135
 %
 $
 1,320
 %

 Sales
 Distribution segment sales increased $1.1 billion and increased across most regions. The following were the primary drivers by regions:
 • North American sales increased $544 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 $331 million mainly due to favorable demand in power generation markets.
 • Asia Pacific sales increased $149 million primarily due to strong demand in power generation markets, especially data center markets and service volume.
 Distribution segment EBITDA increased $169 million, primarily due to favorable pricing, partially offset by higher compensation expenses.

 Power Systems Segment Results
 Financial data for the Power Systems segment was as follows:

 2024
 2023
 2022

 $
 3,500
 $
 3,125
 $
 2,951
 $
 %
 $
 %

 2,908
 2,548
 2,082
 %
 %

 6,408
 5,673
 5,033
 %
 %

 —
 %
 %

 %
 %

 (2)
 (22)
 %
 %

 Russian suspension costs (1)

 —
 —
 —
 —
 %
 %

 1,180
 %
 %

 Segment EBITDA as a percentage of total sales
 18.4
 %
 14.7
 %
 11.8
 %
 3.7
 2.9

 (1) See NOTE 24, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.

 Sales for our Power Systems segment by product line were as follows:

 2024
 2023
 2022

 Power generation
 $
 3,985
 $
 3,340
 $
 2,790
 $
 %
 $
 %

 Industrial
 1,932
 1,854
 1,772
 %
 %

 Generator technologies
 %
 %

 $
 6,408
 $
 5,673
 $
 5,033
 $
 %
 $
 %

 Sales
 Power Systems segment sales increased $735 million, primarily due to improved global power generation sales of $645 million, especially in data center markets.
 Power Systems segment EBITDA increased $344 million, primarily due to favorable pricing and higher volumes, partially offset by higher compensation expenses and increased product coverage.

 Accelera Segment Results
 In the fourth quarter of 2024, our Accelera segment underwent a strategic review to better streamline operations as well as pace and re-focus investments on the most promising paths as the adoption of certain zero emission solutions slows. Total charges for these strategic reorganization actions were $312 million. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.
 Financial data for the Accelera segment was as follows:

 2024
 2023
 2022

 $
 $
 $
 $
 %
 $
 %

 NM
 (4)
 (18)
 %

 %
 %

 (1)

 (23)
 (11)
 %
 (32)
 (19)
 %

 Equity, royalty and interest loss from investees
 (50)
 (1)

 (15)
 (2)
 (35)
 NM
 (13)
 NM

 —
 (1)
 (50)
 %
 NM

 (764)
 (1)

 (443)
 (334)
 (321)
 (72)
 %
 (109)
 (33)
 %

 (1) Included $2 million of charges in research, development and engineering expenses, $17 million of charges in equity, royalty and interest loss from investees and $312 million of charges in EBITDA, all related to strategic reorganization actions in the fourth quarter of 2024. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," to our Consolidated Financial Statements for additional information.

 Accelera segment sales increased $60 million mainly due to improved sales of electrolyzers, partially offset by lower electrified powertrain sales.

 2025 OUTLOOK
 Our outlook reflects the following positive trends and challenges to our business that could impact our revenue and earnings potential in 2025.
 Positive Trends
 • We expect demand within our Power Systems business to remain strong, including the power generation and mining markets.
 • We expect North American pick-up truck demand to improve.
 • We believe market demand for trucks in India will continue to be strong.
 • 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 2025.
 Challenges
 • We expect demand for medium-duty and heavy-duty trucks in North America to remain relatively weak in the first half of 2025.
 • Increases in costs, tariffs, as well as other inflationary pressures, could negatively impact earnings.
 • The potential for trade disruption, including embargoes, sanctions and export controls could negatively impact earnings.

 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 millions
2024
2023

 Working capital (1)

 $
 3,518
 $
 2,295

 Current ratio
 1.31
 1.18

 Accounts and notes receivable, net
 $
 5,181
 $
 5,583

 Days' sales in receivables

 $
 5,742
 $
 5,677

 Inventory turnover
 4.4
 4.5

 $
 3,951
 $
 4,260

 Days' payable outstanding

 Total debt
 $
 7,059
 $
 6,696

 Total debt as a percent of total capital
 38.4
 %
 40.3
 %

 (1) Working capital includes cash and cash equivalents.

 Cash Flows
 Cash and cash equivalents were impacted as follows:

 Change

 2024
 2023
 2022

 Net cash provided by operating activities
 $
 1,487
 $
 3,966
 $
 1,962
 $
 (2,479)
 $
 2,004

 Net cash used in investing activities
 (1,782)
 (1,643)
 (4,172)
 (139)
 2,529

 Net cash (used in) provided by financing activities
 (173)
 (2,177)
 1,669
 2,004
 (3,846)

 Effect of exchange rate changes on cash and cash equivalents
 (40)
 (68)
 (118)

 Net (decrease) increase in cash and cash equivalents
 $
 (508)
 $
 $
 (491)
 $
 (586)
 $

 Net cash provided by operating activities decreased $2.5 billion, primarily due to higher working capital requirements of $4.6 billion, partially offset by higher net income of $3.2 billion. The higher working capital requirements resulted in a cash outflow of $2.2 billion compared to a cash inflow of $2.4 billion in the comparable period in 2023, mainly due to $1.9 billion of payments required by the Settlement Agreements which were accrued in 2023. Net income included a $1.3 billion non-cash gain on the divestiture of Atmus. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," and NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," to our Consolidated Financial Statements for additional information.
 Net cash used in investing activities increased $139 million, primarily due to higher investments in equity investees of $228 million and cash associated with the Atmus divestiture of $174 million, partially offset by lower acquisition activity of $234 million.
 Net cash used in financing activities decreased $2.0 billion, primarily due to higher proceeds from borrowings of $1.9 billion (principally related to our 2024 note issuance) and lower net payments of commercial paper of $542 million, partially offset by higher payments on borrowings and finance lease obligations of $432 million.
 The effect of exchange rate changes on cash and cash equivalents increased $28 million, primarily due to favorable fluctuations in the British pound, partially offset by the Brazilian real.
 For prior year liquidity comparisons see the Liquidity and Capital Resources section of our 2023 Form 10-K.
 Sources of Liquidity
 We generate significant ongoing operating cash flow. Cash provided by operations is our principal source of liquidity with $1.5 billion provided in 2024. In February, we issued $2.25 billion in long-term debt to pay down higher cost debt, finance the Settlement Agreements payments and improve our overall liquidity. Our sources of liquidity include the following:

 December 31, 2024

 Total
 U.S.
 International
 Primary location of international balances

 Cash and cash equivalents
 $
 1,671
 $
 $
 1,067
 Singapore, Australia, Mexico, China, United Kingdom, Belgium

 Marketable securities (1)

 India

 Total
 $
 2,264
 $
 $
 1,582

 Available credit capacity

 Revolving credit facilities (2)

 $
 2,741

 International and other uncommitted domestic credit facilities
 $

 (1) The majority of marketable securities could be liquidated into cash within a few days.

 (2) The 5-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 December 31, 2024, we had $1.3 billion of commercial paper outstanding, which effectively reduced our available capacity under our revolving credit facilities to $2.7 billion.

 Cash, Cash Equivalents and Marketable Securities
 A significant portion of our cash flows are 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 5-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 5-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 12, "DEBT," to our Consolidated Financial Statements for additional information.
 Our committed credit facilities provide access up to $4.0 billion from our $2.0 billion 364-day credit facility that expires on June 2, 2025, and our $2.0 billion 5-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. The credit agreements include various financial covenants, including, among others, maintaining a net debt to capital ratio of no more than 0.65 to 1.0. At December 31, 2024, our net leverage ratio was 0.27 to 1.0. There were no outstanding borrowings under these facilities at December 31, 2024.
 Our committed credit facilities also 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 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 December 31, 2024, we had $1.3 billion of commercial paper outstanding, which effectively reduced our available capacity under our revolving credit facilities to $2.7 billion. See NOTE 12, "DEBT," to our Consolidated Financial Statements for additional information.
 As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the Securities and Exchange Commission (SEC) on February 8, 2022, which expired on February 9, 2025. Under this shelf registration we were able to offer debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units. We plan to file a new shelf registration statement shortly after the filing of this annual report on Form 10-K to replace the expired automatic shelf registration statement.
 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 December 31, 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 Consolidated Balance Sheets. Amounts due to the financial intermediaries reflected in accounts payable at December 31, 2024, were $142 million. See NOTE 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES," to our Consolidated Financial Statements for additional information.
 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 year ended December 31, 2024. See NOTE 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES," to our Consolidated Financial Statements for additional information.
 Uses of Cash
 In December 2023, we announced that we reached an agreement in principle with the EPA, CARB, DOJ 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). We made $1.9 billion of payments required by the Settlement Agreements in the second quarter of 2024. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," to our Consolidated Financial Statements for additional information.
 Dividends
 Total dividends paid to common shareholders in 2024, 2023 and 2022 were $969 million, $921 million and $855 million, respectively. Declaration and payment of dividends in the future depends upon our income and liquidity position, among other factors, and is subject to declaration by the Board, who meets quarterly to consider our dividend payment. We expect to fund dividend payments with cash from operations.
 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. Cash dividends per share paid to common shareholders and the Board authorized increases for the last three years were as follows:

 Quarterly Dividends

 2024
 2023
 2022

 First quarter
 $
 1.68
 $
 1.57
 $
 1.45

 Second quarter
 1.68
 1.57
 1.45

 Third quarter
 1.82
 1.68
 1.57

 Fourth quarter
 1.82
 1.68
 1.57

 Total
 $
 7.00
 $
 6.50
 $
 6.04

 Capital Expenditures
 Capital expenditures were $1.2 billion, $1.2 billion and $916 million in 2024, 2023 and 2022, respectively. We continue to invest in new product lines and targeted capacity expansions. We plan to spend an estimated $1.4 billion to $1.5 billion in 2025 on capital expenditures with over 65 percent of these expenditures expected to be invested in North America.
 Current Maturities of Short and Long-Term Debt
 We had $1.3 billion of commercial paper outstanding at December 31, 2024, that matures in less than one year. The maturity schedule of our existing long-term debt includes $500 million of cash outflows in 2025 when our 0.75 percent senior notes are due. Required annual long-term debt principal payments range from $66 million to $660 million over the next five years. We intend to retain our strong investment credit ratings. See NOTE 12, "DEBT," to our Consolidated Financial Statements for additional information.
 Pensions
 Our global pension plans, including our unfunded and non-qualified plans, were 115 percent funded at December 31, 2024. Our U.S. defined benefit plans (qualified and non-qualified), which represented approximately 70 percent of the worldwide pension obligation, were 117 percent funded, and our U.K. defined benefit plans were 109 percent funded at December 31, 2024. 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 2024, the investment gain on our U.S. pension trusts was 5.5 percent, while our U.K. pension trusts' loss was 9.6 percent.

 We sponsor funded and unfunded domestic and foreign defined benefit pension plans. Contributions to the U.S. and U.K. plans were as follows:

 2024
 2023
 2022

 Defined benefit pension contributions
 $
 $
 $

 Defined contribution 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 anticipate making total contributions of approximately $52 million to our global defined benefit pension plans in 2025. Expected contributions to our defined benefit pension plans in 2025 will meet or exceed the current funding requirements.
 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. For the year ended December 31, 2024, we did not make any repurchases of common stock. The dollar value remaining available for future purchases under the 2019 program at December 31, 2024, was $218 million.
 We intend to repurchase outstanding shares from time to time to enhance shareholder value.
 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 Truck, 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 received all government approvals and began operations in May 2024, but is not expected to begin production until 2027. As of December 31, 2024, we had contributed $211 million and our maximum remaining required contribution to the joint venture was $619 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 3, "INVESTMENTS IN EQUITY INVESTEES," to our Consolidated Financial Statements for additional information.
 Future Uses of Cash
 A summary of our contractual obligations and other commercial commitments at December 31, 2024, are as follows:

 Contractual Cash Obligations
 Payments Due by Period

 Current
 Long-Term

 Long-term debt and finance lease obligations (1)

 $
 $
 8,492

 Operating leases (1)

 —

 Purchase commitments for inventory
 1,107
 —

 Other purchase commitments

 Transitional tax liability
 —

 Other postretirement benefits

 International and other domestic letters of credit

 Performance and excise bonds

 Guarantees and other commitments

 Total
 $
 3,706
 $
 9,672

 (1) Included principal payments and expected interest payments based on the terms of the obligations.

 The contractual obligations reported above exclude our unrecognized tax benefits of $304 million as of December 31, 2024, which includes $187 million of current tax liabilities and $117 million of long-term deferred tax liabilities. We are not able to reasonably estimate the period in which cash outflows relating to uncertain tax contingencies could occur. See NOTE 4, "INCOME TAXES," to our 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-Term
 Short-Term

 Credit Rating Agency (1)

 Senior Debt Rating
 Debt Rating
 Outlook

 Standard & Poor's Rating Services

 A
 A1
 Stable

 Moody's Investors Service, Inc.

 A2
 P1
 Stable

 (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, joint venture contributions and acquisitions through 2025 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.

 APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
 A summary of our significant accounting policies is included in NOTE 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES," of our Consolidated Financial Statements which discusses accounting policies that we selected from acceptable alternatives.
 Our Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the U.S. which often requires 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 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. We believe our critical accounting estimates include estimating liabilities for warranty programs, fair value of intangible assets, assessing goodwill impairments, accounting for income taxes and pension benefits.

 Warranty Programs
 We estimate and record a liability for base warranty programs at the time our products are sold. Our estimates are based on historical experience and reflect management's best estimates of costs to be incurred over the warranty period. Adjustments may be required to the liability when actual or projected costs differ. Variations in component failure rates, repair costs and the point of failure within the product life cycle are key drivers that impact our periodic re-assessment of the warranty liability. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. New product launches require a greater use of judgment in developing estimates until historical experience becomes available. We generally estimate warranty accruals for new products using a methodology that includes the preceding product's warranty history and a multiplicative factor derived from prior product launch experience and new product assessments until sufficient new product data is available for warranty estimation. We then use a blend of actual new product experience and preceding product historical experience for several subsequent quarters and new product specific experience thereafter. Product specific experience is typically available five or six quarters after product launch, with a clear experience trend evident eight quarters after launch. As a result of the uncertainty surrounding the nature and frequency of product recall programs, the liability for such programs is recorded when management commits to a recall action or when a recall becomes probable and estimable. NOTE 13, "PRODUCT WARRANTY LIABILITY," to our Consolidated Financial Statements contains a summary of the activity in our warranty liability account for 2024, 2023 and 2022 including adjustments to pre-existing warranties.

 Fair Value of Intangible Assets
 We make strategic acquisitions that may have a material impact on our consolidated results of operations or financial position. We allocate the purchase price of acquired businesses to the assets acquired and liabilities assumed in the transaction at their estimated fair values. The determination of the fair value of intangible assets, which represent a significant portion of the purchase price in many of our acquisitions can be complex and requires the use of significant judgment with regard to (i) the fair value and (ii) the period and the method by which the intangible asset will be amortized. We use information available to us to make fair value determinations and engage independent valuation specialists, when necessary, to assist in the fair value determination of significant acquired intangibles. We estimate the fair value of acquisition-related intangible assets principally based on projections of cash flows that will arise from identifiable intangible assets of acquired businesses, which includes estimates of discount rates, revenue growth rates, EBITDA, royalty rates, customer attrition rates, customer renewal rates and technology obsolesce rates. The projected cash flows are discounted to determine the present value of the assets at the dates of acquisition. Although we believe the projections, assumptions and estimates made were reasonable and appropriate, these estimates require significant judgment by management, are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Any adjustments subsequent to the measurement period are recorded to our Consolidated Statements of Net Income. See NOTE 23, "ACQUISITIONS," to our Consolidated Financial Statements for additional information about our recent business combinations.

 Goodwill Impairment
 We are required to make certain subjective and complex judgments in assessing whether a goodwill impairment event has occurred, including assumptions and estimates used to determine the fair value of our reporting units. We test for goodwill impairment at the reporting unit level and our reporting units are the operating segments or the components of operating segments that constitute businesses for which discrete financial information is available and is regularly reviewed by management.
 We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform an annual quantitative goodwill impairment test. We have elected this option on certain reporting units. The following events and circumstances are considered when evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount:
 • Macroeconomic conditions, such as a deterioration in general economic conditions, fluctuations in foreign exchange rates and/or other developments in equity and credit markets;
 • Industry and market considerations, such as a deterioration in the environment in which an entity operates, material loss in market share and significant declines in product pricing;
 • Cost factors, such as an increase in raw materials, labor or other costs;
 • Overall financial performance, such as negative or declining cash flows or a decline in actual or forecasted revenue;
 • Other relevant entity-specific events, such as material changes in management or key personnel and
 • Events affecting a reporting unit, such as a change in the composition or carrying amount of its net assets including acquisitions and dispositions.
 The examples noted above are not all-inclusive, and we consider other relevant events and circumstances that affect the fair value of a reporting unit in determining whether to perform the quantitative goodwill impairment test.
 Our goodwill recoverability assessment is based on our annual strategic planning process. This process includes an extensive review of expectations for the long-term growth of our businesses and forecasted future cash flows. In order to determine the valuation of our reporting units, we use either the income approach using a discounted cash flow model or the market approach. Our income approach method uses a discounted cash flow model in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate of return. Our estimates are based upon our historical experience, our current knowledge from our commercial relationships and available external information about future trends.
 The discounted cash flow model requires us to make projections of revenue, gross margin, operating expenses, working capital investment and fixed asset additions for the reporting units over a multi-year period. Additionally, management must estimate a weighted-average cost of capital, which reflects a market rate, for each reporting unit for use as a discount rate. The discounted cash flows are compared to the carrying value of the reporting unit and, if less than the carrying value, the difference is recorded as a goodwill impairment loss. In addition, we also perform sensitivity analyses to determine how much our forecasts can fluctuate before the fair value of a reporting unit would be lower than its carrying amount. Future changes in the judgments, assumptions and estimates that are used in our goodwill impairment testing, including discount rates or future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future. An increase in discount rates, a reduction in projected

 cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.
 Effective October 31, 2024, we changed our annual goodwill impairment testing date for all reporting units from the last day of our fiscal third quarter to October 31 to better align with the timing of our annual long-term planning process. Accordingly, management determined that the change in accounting principle is preferable. This change was applied prospectively from October 31, 2024. We determined that it is impracticable to objectively ascertain projected cash flows and related valuation estimates that would have been used as of each October 31 of prior reporting periods without the use of hindsight. This change was not material to our Consolidated Financial Statements as it did not delay, accelerate or avoid any potential goodwill impairment charges. To ensure that no lapse greater than twelve months occurred, we performed an impairment test, for all reporting units, as of the end of our 2024 fiscal third quarter and noted no impairment. We completed our annual impairment testing as of October 31, 2024, and noted no impairment.

 Accounting for Income Taxes
 We determine our income tax expense using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Future tax benefits of net operating loss and credit carryforwards are also recognized as deferred tax assets. We evaluate the recoverability of our deferred tax assets each quarter by assessing the likelihood of future profitability and available tax planning strategies that could be implemented to realize our net deferred tax assets. At December 31, 2024, we recorded a net deferred tax asset of $730 million. The net deferred tax assets included $907 million for the value of net operating loss and credit carryforwards. A valuation allowance of $872 million was recorded to reduce the tax assets to the net value management believed was more likely than not to be realized. In the event our operating performance deteriorates, future assessments could conclude that a larger valuation allowance will be needed to further reduce the deferred tax assets.
 In addition, we operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. We accrue for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions. We believe we made adequate provisions for income taxes for all years that are subject to audit based upon the latest information available. A more complete description of our income taxes and the future benefits of our net operating loss and credit carryforwards is disclosed in NOTE 4, "INCOME TAXES," to our Consolidated Financial Statements.

 Pension Benefits
 We sponsor a number of pension plans globally, with the majority of assets in the U.S. and the U.K. In the U.S. and the U.K., we have major defined benefit plans that are separately funded. We account for our pension programs in accordance with employers' accounting for defined benefit pension plans, which requires that amounts recognized in financial statements be determined using an actuarial basis. As a result, our pension benefit programs are based on a number of statistical and judgmental assumptions that attempt to anticipate future events and are used in calculating the expense and liability related to our plans each year at December 31. These assumptions include discount rates used to value liabilities, assumed rates of return on plan assets, future compensation increases, inflation, employee turnover rates, actuarial assumptions relating to retirement age, mortality rates and participant withdrawals. The actuarial assumptions we use may differ significantly from actual results due to changing economic conditions, participant life span and withdrawal rates. These differences may result in a material impact to the amount of net periodic pension cost to be recorded in our Consolidated Financial Statements in the future.
 The expected long-term return on plan assets is used in calculating the net periodic pension cost. We considered several factors in developing our expected rate of return on plan assets. The long-term rate of return considers historical returns and expected returns on current and projected asset allocations. Projected returns are based primarily on broad, publicly traded passive fixed income and equity indices and forward-looking estimates of the value added by active investment management. At December 31, 2024, based upon our target asset allocations, it is anticipated that our U.S. investment policy will generate an average annual return over the 30-year projection period equal to or in excess of 7 percent, including the additional positive returns expected from active investment management.
 The one-year return for our U.S. plans was a 5.5 percent gain for 2024. Our U.S. plan assets averaged annualized returns of 5.74 percent over the prior ten years and resulted in approximately $473 million of actuarial losses in accumulated other comprehensive loss (AOCL) in the same period. Based on the historical returns and forward-looking return expectations for capital markets, we believe our investment return assumption of 7.00 percent in 2025 for U.S. pension assets is reasonable and attainable.
 The methodology used to determine the rate of return on pension plan assets in the U.K. was based on establishing an equity-risk premium over current long-term bond yields adjusted based on target asset allocations. At December 31, 2024, based upon our target asset allocations, it is anticipated that our U.K. investment policy will generate an average annual return over the 20-year projection period equal to or in excess of 5 percent. The one-year return for our U.K. plans was a 9.6 percent loss for 2024. We generated average annualized losses of 1.31 percent over ten years, resulting in approximately $942 million of actuarial losses in AOCL. Our strategy

 with respect to our investments in pension plan assets is to be invested with a long-term outlook. Based on the historical returns and forward-looking return expectations, we believe that an investment return assumption of 5.00 percent in 2025 for U.K. pension assets is reasonable and attainable.
 Our target allocation for 2025 and pension plan asset allocations, at December 31, 2024 and 2023 are as follows:

 U.S. Plan
 U.K. Plan

 Target Allocation
 Percentage of Plan Assets at December 31,
 Target Allocation
 Percentage of Plan Assets at December 31,

 Investment description
 2025
 2024
 2023
 2025
 2024
 2023

 Liability matching
 71.0
 %
 69.5
 %
 71.0
 %
 80.0
 %
 79.4
 %
 80.8
 %

 Risk seeking
 29.0
 %
 30.5
 %
 29.0
 %
 20.0
 %
 20.6
 %
 19.2
 %

 Total
 100.0
 %
 100.0
 %
 100.0
 %
 100.0
 %
 100.0
 %
 100.0
 %

 The differences between the actual return on plan assets and expected long-term return on plan assets are recognized in the asset value
 used to calculate net periodic cost over five years. The table below sets forth our expected rate of return for 2025 and the expected
 return assumptions used to develop our pension cost for the period 2022-2024.

 Long-term Expected Return Assumptions

 2025
 2024
 2023
 2022

 U.S. plans
 7.00
 %
 7.25
 %
 7.00
 %
 6.50
 %

 U.K. plans
 5.00
 %
 5.00
 %
 5.00
 %
 4.01
 %

 Pension accounting offers various acceptable alternatives to account for the differences that eventually arise between the estimates used in the actuarial valuations and the actual results. It is acceptable to delay or immediately recognize these differences. Under the delayed recognition alternative, changes in pension obligations (including those resulting from plan amendments) and changes in the value of assets set aside to meet those obligations are not recognized in net periodic pension cost as they occur but are recognized initially in AOCL and subsequently amortized as components of net periodic pension cost systematically and gradually over future periods. In addition to this approach, we may also adopt immediate recognition of actuarial gains or losses. Immediate recognition introduces volatility in financial results. We have chosen to delay recognition and amortize actuarial differences over future periods. If we adopted the immediate recognition approach, we would record a loss of $1.1 billion ($0.9 billion after-tax) from cumulative actuarial net losses for our U.S. and U.K. pension plans.
 The difference between the expected return and the actual return on plan assets is deferred from recognition in our results of operations and under certain circumstances, such as when the difference exceeds 10 percent of the greater of the market value of plan assets or the projected benefit obligation, the difference is amortized over future years of service. This is also true of changes to actuarial assumptions. Under the delayed recognition alternative, the actuarial gains and losses are recognized and recorded in AOCL. As our losses related to the U.S. and U.K. pension plans exceed 10 percent of their respective plan assets, the excess is amortized over the average remaining service lives of participating employees. Net actuarial losses decreased our shareholders' equity by $34 million after-tax in 2024. The loss is primarily due to unfavorable asset returns, partially offset by a favorable change in discount rates.
 The table below sets forth the net periodic pension cost for the years ended December 31 and our expected cost for 2025.

 2025
 2024
 2023
 2022

 Net periodic pension cost
 $
 $
 $
 $

 We expect 2025 net periodic pension cost to increase compared to 2024, primarily due to unfavorable asset returns in the U.K. and a lower expected rate of return in the U.S., partially offset by higher discount rates in the U.S. and U.K. The increase in net periodic pension cost in 2024 compared to 2023 was primarily due to unfavorable asset returns in the U.K., lower discount rates in the U.S. and U.K. and increased headcount from recent acquisitions, partially offset by a higher expected rate of return on assets in the U.S. The decrease in net periodic pension cost in 2023 compared to 2022 was due primarily due to the full year benefit of the Meritor pension plans added during the acquisition and a higher estimated return on assets in the U.S. and U.K.

 The weighted-average discount rates used to develop our net periodic pension cost are set forth in the table below.

 Discount Rates

 2025
 2024
 2023
 2022

 U.S. plans
 5.69
 %
 5.15
 %
 5.55
 %
 3.31
 %

 U.K. plans
 5.62
 %
 4.72
 %
 4.99
 %
 2.26
 %

 The discount rate enables us to state expected future cash payments for benefits as a present value on the measurement date. The guidelines for setting this rate suggest the use of a high-quality corporate bond rate. We used bond information provided by Moody's Investor Services, Inc. and Standard & Poor's Rating Services. All bonds used to develop our hypothetical portfolio in the U.S. and U.K. were deemed high-quality, non-callable bonds (Aa or better) at December 31, 2024, by at least one of the bond rating agencies.
 Our model called for projected payments until near extinction for the U.S. and the U.K. For both countries, our model matches the present value of the plan's projected benefit payments to the market value of the theoretical settlement bond portfolio. A single equivalent discount rate is determined to align the present value of the required cash flow with the value of the bond portfolio. The resulting discount rate is reflective of both the current interest rate environment and the plan's distinct liability characteristics.
 The table below sets forth the estimated impact on our 2025 net periodic pension cost relative to a change in the discount rate and a change in the expected rate of return on plan assets.

 Impact on Pension Cost Increase/(Decrease)

 Discount rate used to value liabilities

 0.25 percent increase
 $
 (6)

 0.25 percent decrease

 Expected rate of return on assets

 1 percent increase
 (56)

 1 percent decrease

 The above sensitivities reflect the impact of changing one assumption at a time. A higher discount rate decreases the plan obligations and decreases our net periodic pension cost. A lower discount rate increases the plan obligations and increases our net periodic pension cost. It should be noted that economic factors and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily linear. NOTE 10, "PENSIONS AND OTHER POSTRETIREMENT BENEFITS," to our Consolidated Financial Statements provides a summary of our pension benefit plan activity, the funded status of our plans and the amounts recognized in our Consolidated Financial Statements.

 RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 See NOTE 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES," to our Consolidated Financial Statements for additional information.

 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
 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.
 We also enter into physical forward contracts with certain suppliers to purchase minimum volumes of commodities at contractually stated prices for various periods. These arrangements, as further described below, enable us to fix the prices of portions of our normal purchases of these commodities, which otherwise are subject to market volatility.

 The following describes our risk exposures and provides the results of a sensitivity analysis performed at December 31, 2024. The sensitivity analysis assumes instantaneous, parallel shifts in foreign currency exchange rates and commodity prices. See NOTE 20, "DERIVATIVES," to our Consolidated Financial Statements for additional information.
 Foreign Currency Exchange Rate Risk
 As a result of our international business presence, we are exposed to foreign currency exchange rate risks. We transact business in foreign currencies and, as a result, our income experiences some volatility related to movements in foreign currency exchange rates. To help manage our exposure to exchange rate volatility, we use foreign currency forward contracts on a regular basis to hedge forecasted intercompany and third-party sales and purchases denominated in non-functional currencies. Our foreign currency cash flow hedges generally mature within two years. These foreign currency forward contracts are designated and qualify as foreign currency cash flow hedges. For the years ended December 31, 2024, and 2023, there were no circumstances that resulted in the discontinuance of a foreign currency cash flow hedge.
 To minimize the income volatility resulting from the remeasurement of net monetary assets and payables denominated in a currency other than the functional currency, we enter into foreign currency forward contracts, which are considered economic hedges. The objective is to offset the gain or loss from remeasurement with the gain or loss from the fair market valuation of the forward contract. These derivative instruments are not designated as hedges.
 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. In order to minimize movements in certain investments, in 2022 we began entering into foreign exchange forwards designated as net investment hedges. Under the 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. These forwards are utilized to hedge portions of our net investments denominated in these currencies against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. The change in fair value related to the spot-to-forward rate difference is recorded as other income (expense) with all other changes in fair value deferred and reported as components of AOCL. The unrealized gain or loss is classified into income in the same period when the foreign subsidiary is sold or substantially liquidated.
 At December 31, 2024, the potential gain or loss in the fair value of our outstanding foreign currency contracts, assuming a hypothetical 10 percent fluctuation in the currencies of such contracts, would be approximately $25 million. The sensitivity analysis of the effects of changes in foreign currency exchange rates assumes the notional value to remain constant for the next 12 months. The analysis ignores the impact of foreign exchange movements on our competitive position and potential changes in sales levels. Any change in the value of the contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items.
 Interest Rate Risk
 We are exposed to market risk from fluctuations in interest rates. We manage our exposure to interest rate fluctuations through the use of interest rate swaps. The objective of the swaps is to more effectively balance our borrowing costs and interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for us making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. We also may hedge the anticipated issuance of fixed-rate debt, and these contracts are designated as cash flow hedges.
 At any time, a change in interest rates could have an adverse impact on the fair value of our portfolios. Assuming a hypothetical adverse movement in interest rates of one percentage point, the combined value of our interest rate derivatives portfolios would be reduced by $29 million, as calculated as of December 31, 2024. However, this does not take into consideration an offset in the underlying hedged items when using fair value hedges. While these are our best estimates of the impact of the specified interest rate scenario, actual results could differ from those projected. The sensitivity analysis presented assumes interest rate changes are instantaneous with parallel shifts in the yield curve.
 Commodity Price Risk
 We are exposed to fluctuations in commodity prices due to contractual agreements with component suppliers. In order to protect ourselves against future price volatility and, consequently, fluctuations in gross margins, we periodically enter into commodity swap and forward contracts with designated banks and other counterparties to fix the cost of certain raw material purchases with the objective of minimizing changes in inventory cost due to market price fluctuations. These commodity swaps are designated and qualify as cash flow hedges. At December 31, 2024, realized and unrealized gains and losses related to these hedges were not material to our financial statements. We also enter into physical forward contracts, which qualify for the normal purchases scope exception and are treated as purchase commitments.

 We also limit our exposure to commodity price risk by entering into purchasing arrangements to fix the price of certain volumes of platinum, palladium and iridium expected to be used in our products. We enter into physical forward contracts with suppliers of platinum, palladium and iridium to purchase some volumes of the commodities at contractually stated prices for various periods, generally less than two years. These arrangements enable us to fix the prices of a portion of our purchases of these commodities, which otherwise are subject to market volatility. Additional information on the physical forwards is included in NOTE 14, "COMMITMENTS AND CONTINGENCIES."

 ITEM 8. Financial Statements and Supplementary Data

 Index to Financial Statements
 • Management's Report to Shareholders
 • Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
 • Consolidated Statements of Net Income for the years ended December 31, 2024, 2023 and 2022
 • Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022
 • Consolidated Balance Sheets at December 31, 2024 and 2023
 • Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
 • Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Equity for the years ended December 31, 2024, 2023 and 2022
 • Notes to the Consolidated Financial Statements
 NOTE

 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 NOTE

 REVENUE FROM CONTRACTS WITH CUSTOMERS

 NOTE

 INVESTMENTS IN EQUITY INVESTEES

 NOTE

 INCOME TAXES

 NOTE

 MARKETABLE SECURITIES

 NOTE

 INVENTORIES

 NOTE

 PROPERTY, PLANT AND EQUIPMENT

 NOTE
 LEASES

 NOTE

 GOODWILL AND OTHER INTANGIBLE ASSETS

 NOTE
 PENSIONS AND OTHER POSTRETIREMENT BENEFITS

 NOTE
 SUPPLEMENTAL BALANCE SHEET DATA

 NOTE
 DEBT

 NOTE

 PRODUCT WARRANTY LIABILITY

 NOTE

 COMMITMENTS AND CONTINGENCIES

 NOTE

 CUMMINS INC. SHAREHOLDERS' EQUITY

 NOTE

 ACCUMULATED OTHER COMPREHENSIVE LOSS

 NOTE

 NONCONTROLLING INTERESTS

 NOTE

 STOCK INCENTIVE AND STOCK OPTION PLANS

 NOTE

 EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.

 NOTE
 DERIVATIVES

 NOTE
 ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE

 NOTE
 ACCELERA STRATEGIC REORGANIZATION ACTIONS

 NOTE
 ACQUISITIONS

 NOTE
 RUSSIAN OPERATIONS

 NOTE

 OPERATING SEGMENTS

 MANAGEMENT'S REPORT TO SHAREHOLDERS
 Management's Report on Financial Statements and Practices
 The accompanying Consolidated Financial Statements of Cummins Inc. were prepared by management, which is responsible for their integrity and objectivity. The statements were prepared in accordance with generally accepted accounting principles and include amounts that are based on management's best judgments and estimates. The other financial information included in the annual report is consistent with that in the financial statements.
 Management also recognizes its responsibility for conducting our affairs according to the highest standards of personal and corporate conduct. This responsibility is characterized and reflected in key policy statements issued from time to time regarding, among other things, conduct of its business activities within the laws of the host countries in which we operate, within the Foreign Corrupt Practices Act and potentially conflicting interests of its employees. We maintain a systematic program to assess compliance with these policies.
 To comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we designed and implemented a structured and comprehensive compliance process to evaluate our internal control over financial reporting across the enterprise.
 Management's Report on Internal Control Over Financial Reporting
 The management of Cummins Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of our Consolidated Financial Statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
 Management assessed the effectiveness of our internal control over financial reporting and concluded it was effective as of December 31, 2024. In making its assessment, management utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).
 The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
 Officer Certifications
 Please refer to Exhibits 31(a) and 31(b) attached to this report for certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.

 /s/ JENNIFER RUMSEY

 /s/ MARK A. SMITH

 Chair and Chief Executive Officer

 Vice President and Chief Financial Officer

 Report of Independent Registered Public Accounting Firm

 To the Board of Directors and Shareholders of Cummins Inc.
 Opinions on the Financial Statements and Internal Control over Financial Reporting
 We have audited the accompanying consolidated balance sheets of Cummins Inc. and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of net income, comprehensive income, changes in redeemable noncontrolling interests and equity and cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
 In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
 Basis for Opinions
 The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
 Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
 Definition and Limitations of Internal Control over Financial Reporting
 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 Critical Audit Matters
 The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
 Goodwill Impairment Test as of the End of the Fiscal Third Quarter – Drivetrain and Braking Systems Reporting Unit
 As described in Notes 1 and 9 to the consolidated financial statements, the Company's consolidated goodwill balance was $ 2,370 million as of December 31, 2024, of which 31 percent relates to the drivetrain and braking systems reporting unit. Effective October 31, 2024, management changed the annual goodwill impairment testing date for all reporting units from the last day of the fiscal third quarter to October 31. To ensure that no lapse greater than twelve months occurred, management performed an impairment test as of the end of the fiscal third quarter. Management performs the annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. In estimating the fair value of the reporting unit, management used an income approach using a discounted cash flow model. The discounted cash flow model requires projections of revenue, gross margin, operating expenses, working capital investment and fixed asset additions for the reporting unit over a multi-year period, and a discount rate based upon a weighted-average cost of capital.
 The principal considerations for our determination that performing procedures relating to the goodwill impairment test as of the end of the fiscal third quarter for the drivetrain and braking systems reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to projections of revenue and gross margin; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's goodwill impairment test, including controls over the valuation of the reporting unit. These procedures also included, among others (i) testing management's process for developing the fair value estimate of the reporting unit; (ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of significant assumptions used by management related to projections of revenue and gross margin. Evaluating management's assumptions related to projections of revenue and gross margin involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow model.

 /s/ PricewaterhouseCoopers LLP
 Indianapolis, Indiana

 We have served as the Company's auditor since 2002.

 CONSOLIDATED STATEMENTS OF NET INCOME

 In millions, except per share amounts
 2024
 2023
 2022

 NET SALES (Notes 1 and 2)

 $
 $
 $

 Cost of sales
 25,663
 25,816
 21,355

 GROSS MARGIN
 8,439
 8,249
 6,719

 OPERATING EXPENSES AND INCOME

 Selling, general and administrative expenses
 3,275
 3,333
 2,687

 1,463
 1,500
 1,278

 Equity, royalty and interest income from investees (Note 3)

 2,138

 OPERATING INCOME
 3,750
 1,761
 2,929

 Interest expense

 Other income, net (Note 21)
 1,523

 INCOME BEFORE INCOME TAXES
 4,903
 1,626
 2,819

 Income tax expense (Note 4)

 CONSOLIDATED NET INCOME
 4,068
 2,183

 Less: Net income attributable to noncontrolling interests

 NET INCOME ATTRIBUTABLE TO CUMMINS INC.
 $
 3,946
 $
 $
 2,151

 EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. (Note 19)

 Basic
 $
 28.55
 $
 5.19
 $
 15.20

 Diluted
 $
 28.37
 $
 5.15
 $
 15.12

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 2024
 2023
 2022

 CONSOLIDATED NET INCOME
 $
 4,068
 $
 $
 2,183

 Other comprehensive income (loss), net of tax (Note 16)

 Change in pension and other postretirement defined benefit plans
 ( 421)
 ( 81)

 Foreign currency translation adjustments
 ( 276)
 ( 384)

 Unrealized gain on derivatives

 Total other comprehensive loss, net of tax
 ( 255)
 ( 359)

 COMPREHENSIVE INCOME
 3,813
 1,824

 Less: Comprehensive income (loss) attributable to noncontrolling interests
 ( 8)

 COMPREHENSIVE INCOME ATTRIBUTABLE TO CUMMINS INC.
 $
 3,707
 $
 $
 1,832

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

 CONSOLIDATED BALANCE SHEETS

 In millions, except par value
 2024
 2023

 ASSETS

 Current assets

 Cash and cash equivalents
 $
 1,671
 $
 2,179

 Marketable securities (Note 5)

 Total cash, cash equivalents and marketable securities
 2,264
 2,741

 Accounts and notes receivable, net
 5,181
 5,583

 Inventories (Note 6)
 5,742
 5,677

 Prepaid expenses and other current assets
 1,565
 1,197

 Total current assets
 14,752
 15,198

 Long-term assets

 Property, plant and equipment, net (Note 7)
 6,356
 6,249

 Investments and advances related to equity method investees (Note 3)
 1,889
 1,800

 Goodwill (Note 9)
 2,370
 2,499

 Other intangible assets, net (Note 9)
 2,351
 2,519

 Pension assets (Note 10)
 1,189
 1,197

 Other assets (Note 11)
 2,633
 2,543

 Total assets
 $
 31,540
 $
 32,005

 LIABILITIES

 Current liabilities

 $
 3,951
 $
 4,260

 Loans payable (Note 12)

 Commercial paper (Note 12)
 1,259
 1,496

 Current maturities of long-term debt (Note 12)

 Accrued compensation, benefits and retirement costs
 1,084
 1,108

 Current portion of accrued product warranty (Note 13)

 Current portion of deferred revenue (Note 2)
 1,347
 1,220

 Other accrued expenses (Note 11)
 1,898
 3,754

 Total current liabilities
 11,234
 12,903

 Long-term liabilities

 Long-term debt (Note 12)
 4,784
 4,802

 Deferred revenue (Note 2)
 1,065

 Other liabilities (Note 11)
 3,149
 3,430

 Total liabilities
 $
 20,232
 $
 22,101

 Commitments and contingencies (Note 14)

 EQUITY

 Cummins Inc. shareholders' equity (Note 15)

 Common stock, $ 2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued

 $
 2,636
 $
 2,564

 Retained earnings
 20,828
 17,851

 Treasury stock, at cost, 85.1 and 80.7 shares

 ( 10,748)
 ( 9,359)

 Accumulated other comprehensive loss (Note 16)
 ( 2,445)
 ( 2,206)

 Total Cummins Inc. shareholders' equity
 10,271
 8,850

 Noncontrolling interests (Note 17)
 1,037
 1,054

 Total equity
 $
 11,308
 $
 9,904

 Total liabilities and equity
 $
 31,540
 $
 32,005

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

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2024
 2023
 2022

 CASH FLOWS FROM OPERATING ACTIVITIES

 Consolidated net income
 $
 4,068
 $
 $
 2,183

 Adjustments to reconcile consolidated net income to net cash provided by operating activities

 Gain related to divestiture of Atmus (Note 21)
 ( 1,333)
 —
 —

 Depreciation and amortization
 1,065
 1,024

 Deferred income taxes (Note 4)
 ( 209)
 ( 457)
 ( 274)

 Equity in income of investees, net of dividends
 ( 81)

 Pension and OPEB expense (Note 10)

 Pension contributions and OPEB payments (Note 10)
 ( 90)
 ( 134)
 ( 85)

 Russian suspension costs, net of recoveries (Note 24)
 —
 —

 Changes in current assets and liabilities, net of acquisitions and divestiture

 Accounts and notes receivable
 ( 330)
 ( 697)

 ( 402)
 —
 ( 567)

 Other current assets
 ( 305)
 ( 120)
 ( 109)

 Accounts payable
 ( 183)
 ( 66)

 Accrued expenses
 ( 1,573)
 2,934
 ( 170)

 Net cash provided by operating activities
 1,487
 3,966
 1,962

 CASH FLOWS FROM INVESTING ACTIVITIES

 ( 1,208)
 ( 1,213)
 ( 916)

 Investments in and net advances (to) from equity investees
 ( 214)
 ( 54)

 Acquisition of businesses, net of cash acquired (Note 23)
 ( 58)
 ( 292)
 ( 3,191)

 Investments in marketable securities—acquisitions
 ( 1,500)
 ( 1,409)
 ( 1,073)

 Investments in marketable securities—liquidations (Note 5)
 1,460
 1,334
 1,151

 Cash associated with Atmus divestiture
 ( 174)
 —
 —

 ( 88)
 ( 77)
 ( 89)

 Net cash used in investing activities
 ( 1,782)
 ( 1,643)
 ( 4,172)

 CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from borrowings
 2,720
 2,103

 Net (payments) borrowings of commercial paper
 ( 237)
 ( 779)
 2,261

 Payments on borrowings and finance lease obligations
 ( 1,568)
 ( 1,136)
 ( 1,550)

 Dividend payments on common stock (Note 15)
 ( 969)
 ( 921)
 ( 855)

 Repurchases of common stock (Note 15)
 —
 —
 ( 374)

 Payments for purchase of redeemable noncontrolling interests (Note 23)
 ( 50)
 ( 175)
 —

 ( 69)
 ( 27)

 Net cash (used in) provided by financing activities
 ( 173)
 ( 2,177)
 1,669

 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 ( 40)
 ( 68)

 Net (decrease) increase in cash and cash equivalents
 ( 508)
 ( 491)

 Cash and cash equivalents at beginning of year
 2,179
 2,101
 2,592

 CASH AND CASH EQUIVALENTS AT END OF PERIOD
 $
 1,671
 $
 2,179
 $
 2,101

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

 CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 Redeemable Noncontrolling Interests
 Common
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, 2021
 $
 $
 $
 1,543
 $
 16,741
 $
 ( 9,123)
 $
 ( 1,571)
 $
 8,146
 $
 $
 9,035

 ( 24)

 2,151

 2,151
 2,207

 Other comprehensive loss, net of tax (Note 16)

 ( 40)
 ( 359)

 Issuance of common stock

 —

 Repurchases of common stock (Note 15)

 ( 374)

 ( 374)
 —
 ( 374)

 Cash dividends on common stock (Note 15)

 ( 855)

 ( 855)
 —
 ( 855)

 Distributions to noncontrolling interests

 —
 ( 38)
 ( 38)

 Share-based awards

 —

 Acquisition of business (Note 23)
 —

 Fair value adjustment of redeemable noncontrolling interests
 ( 104)
 —

 Other shareholder transactions

 BALANCE AT DECEMBER 31, 2022
 $
 $
 $
 1,687
 $
 18,037
 $
 ( 9,415)
 $
 ( 1,890)
 $
 8,975
 $
 $
 9,967

 ( 20)

 Other comprehensive loss, net of tax (Note 16)

 ( 316)
 ( 316)
 ( 3)

 Issuance of common stock

 —

 Cash dividends on common stock (Note 15)

 ( 921)

 ( 921)
 —
 ( 921)

 Distributions to noncontrolling interests

 —
 ( 57)
 ( 57)

 Share-based awards

 ( 4)

 —

 Fair value adjustment of redeemable noncontrolling interests
 ( 33)
 ( 33)
 —
 ( 33)

 Acquisition of redeemable noncontrolling interests (Note 23)
 ( 271)
 —
 —
 —

 Sale of Atmus stock (Note 21)
 ( 3)

 Other shareholder transactions

 —

 BALANCE AT DECEMBER 31, 2023
 $
 —
 $
 $
 2,008
 $
 17,851
 $
 ( 9,359)
 $
 ( 2,206)
 $
 8,850
 $
 1,054
 $
 9,904

 3,946

 3,946
 4,068

 Other comprehensive loss, net of tax (Note 16)

 ( 300)
 ( 300)
 ( 16)
 ( 316)

 Issuance of common stock

 —

 Divestiture of Atmus (Note 21)

 ( 1,532)
 ( 1,471)
 ( 19)
 ( 1,490)

 Cash dividends on common stock (Note 15)

 ( 969)

 ( 969)
 —
 ( 969)

 Distributions to noncontrolling interests

 —
 ( 71)
 ( 71)

 Share-based awards

 ( 7)

 —

 Other shareholder transactions

 ( 33)

 BALANCE AT DECEMBER 31, 2024
 $
 —
 $
 $
 2,080
 $
 20,828
 $
 ( 10,748)
 $
 ( 2,445)
 $
 10,271
 $
 1,037
 $
 11,308

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

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Operations
 We were 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 - Engine, Components, 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, electrified power systems with innovative components and subsystems, including battery, fuel cell and electric power technologies and hydrogen production technologies. 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 650 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 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
 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 (DOJ) 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 14, "COMMITMENTS AND CONTINGENCIES," for additional information.
 Meritor Acquisition
 On August 3, 2022, we completed the acquisition of Meritor with a purchase price of $ 2.9 billion (including debt repaid concurrent with the acquisition). Our consolidated results and segment results include Meritor's activity since the date of acquisition. Meritor was split into the newly formed drivetrain and braking systems business and electric powertrain. The results for the drivetrain and braking systems are included in our Components segment while the electric powertrain portion is included in our Accelera segment. See NOTE 23, "ACQUISITIONS," for additional information.
 Principles of Consolidation
 Our Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). All intercompany balances and transactions are eliminated in consolidation.
 We include the accounts of all wholly-owned and majority-owned domestic and foreign subsidiaries where our ownership is more than 50 percent of outstanding equity interests except for majority-owned subsidiaries that are considered variable interest entities (VIEs) where we are not deemed to have a controlling financial interest. In addition, we also consolidate, regardless of our ownership percentage, VIEs or joint ventures for which we are deemed to have a controlling financial interest. We have variable interests in several businesses accounted for under the equity method of accounting.
 For consolidated entities where our ownership interest is less than 100 percent, the noncontrolling ownership interests are reported in our Consolidated Balance Sheets. The noncontrolling ownership interest in our income, net of tax, is classified as net income attributable to noncontrolling interests in our Consolidated Statements of Net Income.
 Reclassifications
 Certain amounts for 2023 and 2022 were reclassified to conform to the current year presentation.

 Investments in Equity Investees
 We use the equity method to account for our investments in joint ventures, affiliated companies and alliances in which we have the ability to exercise significant influence, generally represented by equity ownership or partnership equity of at least 20 percent but not more than 50 percent. Generally, under the equity method, original investments in these entities are recorded at cost and subsequently adjusted by our share of equity in income or losses after the date of acquisition. Investment amounts in excess of our share of an investee's net assets are amortized over the life of the related asset creating the excess, except goodwill which is not amortized. Equity in income or losses of each investee is recorded according to our level of ownership; if losses accumulate, we record our share of losses until our investment has been fully depleted. If our investment has been fully depleted, we recognize additional losses only when we are the primary funding source. We eliminate (to the extent of our ownership percentage) in our Consolidated Financial Statements the profit in inventory held by our equity method investees that has not yet been sold to a third-party. Dividends received from equity method investees reduce the amount of our investment when received and do not impact our earnings. Our investments are classified as Investments and advances related to equity method investees in our Consolidated Balance Sheets. Our share of the results from joint ventures, affiliated companies and alliances is reported in our Consolidated Statements of Net Income as equity, royalty and interest income from investees, and is reported net of all applicable income taxes.
 Our share of the results from our foreign equity investees are presented net of applicable foreign income taxes in our Consolidated Statements of Net Income. Our remaining U.S. equity investees are partnerships (non-taxable), thus there is no difference between gross or net of tax presentation as the investees are not taxed. See NOTE 3, "INVESTMENTS IN EQUITY INVESTEES," for additional information.
 Use of Estimates in the Preparation of the Financial Statements
 Preparation of financial statements requires management to make estimates and assumptions that affect reported amounts presented and disclosed in our Consolidated Financial Statements. Significant estimates and assumptions in these Consolidated Financial Statements require the exercise of judgment and are used for, but not limited to, estimates of future cash flows and other assumptions associated with the valuation of intangible assets and goodwill and long-lived asset impairment tests, useful lives for depreciation and amortization, warranty programs, determination of discount rate and other assumptions for pensions and other postretirement benefit obligations (OPEB) and related costs, income taxes, deferred tax valuation allowances and contingencies. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.
 Revenue From Contracts with Customers
 Revenue Recognition Sales of Products
 We sell to customers either through long-term arrangements or standalone purchase orders. Our long-term arrangements generally do not include committed volumes until underlying purchase orders are issued. Our performance obligations vary by contract, but may include 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, electrified power systems with innovative components and subsystems including battery, fuel cell, electric power technologies and parts, hydrogen production technologies, construction related projects, maintenance services, commissioning and installation services and extended warranty coverage.
 Typically, we recognize revenue on the products we sell at a point in time, generally in accordance with shipping terms, which reflects the transfer of control to the customer. Since control of construction projects transfer to the customer as the work is performed, revenue on these projects is recognized based on the percentage of inputs incurred to date compared to the total expected cost of inputs, which is reflective of the value transferred to the customer. Revenue is recognized under long-term maintenance and other service agreements over the term of the agreement as underlying services are performed based on the percentage of the cost of services provided to date compared to the total expected cost of services to be provided under the contract. Sales of extended coverage are recognized based on the pattern of expected costs over the extended coverage period or, if such a pattern is unknown, on a straight-line basis over the coverage period as the customer is considered to benefit from our stand ready obligation over the coverage period. In all cases, we believe cost incurred is the most representative depiction of the extent of service performed to date on a particular contract.
 Our arrangements may include the act of shipping products to our customers after the performance obligation related to that product has been satisfied. We have elected to account for shipping and handling as activities to fulfill the promise to transfer goods and have not allocated revenue to the shipping activity. All related shipping and handling costs are accrued at the time the related performance obligation is satisfied.
 Our sales arrangements may include the collection of sales and other similar taxes that are then remitted to the related taxing authority. We have elected to present the amounts collected for these taxes net of the related tax expense rather than presenting them as additional revenue.

 We grant credit limits and terms to customers based upon traditional practices and competitive conditions. Typical terms vary by market, but payments are generally due in 90 days or less from invoicing for most of our product and service sales, while payments on construction, electrolyzer and certain power generation contracts may be due on an installment basis.
 For contracts where the time between cash collection and performance is less than one year, we have elected to use the practical expedient that allows us to ignore the possible existence of a significant financing component within the contract. For contracts where this time period exceeds one year, generally the timing difference is the result of business concerns other than financing. We do have a limited amount of customer financing for which we charge or impute interest, but such amounts are immaterial to our Consolidated Statements of Net Income.
 Sales Incentives
 We provide various sales incentives to both our distribution network and OEM customers. These programs are designed to promote the sale of our products in the channel or encourage the usage of our products by OEM customers. When there is uncertainty surrounding these sales incentives, we may limit the amount of revenue we recognize under a contract until the uncertainty has been resolved. Sales incentives primarily fall into three categories:
 • Volume rebates;
 • Market share rebates; and
 • Aftermarket rebates.
 For volume rebates, we provide certain customers with rebate opportunities for attaining specified volumes during a particular quarter or year. We consider the expected amount of these rebates at the time of the original sale as we determine the overall transaction price. We update our assessment of the amount of rebates that will be earned quarterly based on our best estimate of the volume levels the customer will reach during the measurement period. For market share rebates, we provide certain customers with rebate opportunities based on the percentage of their production that utilizes our product. These rebates are typically measured either quarterly or annually and we assess them at least quarterly to determine our current estimates of amounts expected to be earned. These estimates are considered in the determination of transaction price at the time of the original sale based on the current market shares, with adjustments made as the level changes. For aftermarket rebates, we provide incentives to promote sales to certain dealers and end-markets. These rebates are typically paid on a quarterly, or more frequent basis. At the time of the sales, we consider the expected amount of these rebates when determining the overall transaction price. Estimates are adjusted at the end of each quarter based on the amounts yet to be paid. These estimates are based on historical experience with the particular program.
 Sales Returns
 The initial determination of the transaction price may also be impacted by expected product returns. Rights of return do not exist for the majority of our sales other than for quality issues. We do offer certain return rights in our aftermarket business, where some aftermarket customers are permitted to return small amounts of parts each year, and in our power generation business, which sells portable generators to retail customers. An estimate of future returns is accounted for at the time of sale as a reduction in the overall contract transaction price based on historical return rates.
 Multiple Performance Obligations
 Our sales arrangements may include multiple performance obligations. We identify each of the material performance obligations in these arrangements and allocate the total transaction price to each performance obligation based on its relative selling price. In most cases, the individual performance obligations are also sold separately and we use that price as the basis for allocating revenue to the included performance obligations. When an arrangement includes multiple performance obligations and invoicing to the customer does not match the allocated portion of the transaction price, unbilled revenue or deferred revenue is recorded reflecting that difference. Unbilled and deferred revenue are discussed in more detail below.
 Long-term Maintenance Agreements
 Our long-term maintenance agreements often include a variable component of the transaction price. We are generally compensated under such arrangements on a cost per hour of usage basis. We typically can estimate the expected usage over the life of the contract, but reassess the transaction price each quarter and adjust our recognized revenue accordingly. Certain maintenance agreements apply to generators used to provide standby power, which have limited expectations of usage. These agreements may include monthly minimum payments, providing some certainty to the total transaction price. For these particular contracts that relate to standby power, we limit revenue recognized to date to an amount representing the total minimums earned to date under the contract plus any cumulative billings earned in excess of the minimums. We reassess the estimates of progress and transaction price on a quarterly basis. For prime power arrangements, revenue is not subject to such a constraint and is generally equal to the current estimate on a percentage of completion basis times the total expected revenue under the contract.

 Deferred Revenue
 The timing of our billing does not always match the timing of our revenue recognition. We record deferred revenue when we are entitled to bill a customer in advance of when we are permitted to recognize revenue. Deferred revenue may arise in construction and other power generation systems and electrolyzer contracts, where billings may occur in advance of performance or in accordance with specific milestones. Deferred revenue may also occur in long-term maintenance contracts, where billings are often based on usage of the underlying equipment, which generally follows a predictable pattern that often will result in the accumulation of collections in advance of our performance of the related maintenance services. Finally, deferred revenue exists in our extended coverage contracts, where the cash is collected prior to the commencement of the coverage period. Deferred revenue is included in our Consolidated Balance Sheets as a component of current liabilities for the amount expected to be recognized in revenue in a period of less than one year and long-term liabilities for the amount expected to be recognized as revenue in a period beyond one year. Deferred revenue is recognized as revenue when control of the underlying product, project or service passes to the customer under the related contract.
 Unbilled Revenue
 We recognize unbilled revenue when the revenue has been earned, but not yet billed. Unbilled revenue is included in our Consolidated Balance Sheets as a component of current assets for those expected to be collected in a period of less than one year and long-term assets for those expected to be collected in a period beyond one year. Unbilled revenue relates to our right to consideration for our completed performance under a contract. Unbilled revenue generally arises from contractual provisions that delay a portion of the billings on genset deliveries until commissioning occurs. Unbilled revenue may also occur when billings trail the provision of service in construction and long-term maintenance contracts. Our unbilled revenue is assessed for collection risks at the time the amounts are initially recorded. This estimate of expected losses reflects those losses expected to occur over the contractual life of the unbilled amount through the time of collection. Impairment losses on our unbilled revenues were immaterial during the years ended December 31, 2024, 2023 and 2022.
 Contract Costs
 We are required to record an asset for the incremental costs of obtaining a contract with a customer and other costs to fulfill a contract not otherwise required to be immediately expensed when we expect to recover those costs. The only material incremental cost we incur is commission expense, which is generally incurred in the same period as the underlying revenue. Costs to fulfill a contract are generally limited to customer-specific engineering expenses that do not meet the definition of research and development expenses. As a practical expedient, we have elected to recognize these costs of obtaining a contract as an expense when the related contract period is less than one year. When the period exceeds one year, this asset is amortized over the life of the contract. We did not have any material capitalized balances at December 31, 2024 or 2023.
 Extended Warranty
 We sell extended warranty coverage on most of our engines and on certain components. We consider a warranty to be extended coverage in any of the following situations:
 • When a warranty is sold separately or is optional (extended coverage contracts, for example) or
 • When a warranty provides additional services.
 The consideration collected is initially deferred and is recognized as revenue in proportion to the costs expected to be incurred in performing services over the contract period. We compare the remaining deferred revenue balance quarterly to the estimated amount of future claims under extended warranty programs and provide an additional accrual when the deferred revenue balance is less than expected future costs.
 Foreign Currency Transactions and Translation
 We translate assets and liabilities of foreign entities to U.S. dollars, where the local currency is the functional currency, at month-end exchange rates. We translate income and expenses to U.S. dollars using weighted-average exchange rates. We record adjustments resulting from translation in a separate component of accumulated other comprehensive loss (AOCL) and include the adjustments in net income only upon sale, loss of controlling financial interest or liquidation of the underlying foreign investment.
 Foreign currency transaction gains and losses are included in current net income. For foreign entities where the U.S. dollar is the functional currency, including those operating in highly inflationary economies when applicable, we remeasure non-monetary balances and the related income statement amounts using historical exchange rates. We include the resulting gains and losses in income, including the effect of derivatives in our Consolidated Statements of Net Income, which combined with transaction gains and losses amounted to net losses of $ 41 million, $ 30 million and $ 8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

 Fair Value Measurements
 A three-level valuation hierarchy, based upon the observable and unobservable inputs, is used for fair value measurements. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions based on the best evidence available. These two types of inputs create the following fair value hierarchy:
 • Level 1 - Quoted prices for identical instruments in active markets;
 • Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose significant inputs are observable; and
 • Level 3 - Instruments whose significant inputs are unobservable.
 Derivative Instruments
 We make use of derivative instruments in foreign exchange, commodity price and interest rate hedging programs. Derivatives currently in use are foreign currency forward contracts, commodity swaps and interest rate swaps. These contracts are used strictly for hedging and not for speculative purposes.
 Due to our international business presence, we are exposed to foreign currency exchange risk. We transact in foreign currencies and have assets, liabilities and investments in subsidiaries denominated in foreign currencies. Consequently, our income experiences some volatility related to movements in foreign currency exchange rates. In order to benefit from global diversification and after considering naturally offsetting currency positions, we enter into foreign currency forward contracts to minimize our existing exposures (recognized assets and liabilities) and hedge forecasted transactions. Foreign currency forward contracts are designated and qualify as foreign currency cash flow hedges. The unrealized gain or loss on the forward contract is deferred and reported as a component of AOCL. When the hedged forecasted transaction (sale or purchase) occurs, the unrealized gain or loss is reclassified into income in the same line item associated with the hedged transaction in the same period or periods during which the hedged transaction affects income. At December 31, 2024 and 2023, realized and unrealized gains and losses related to these hedges were not material to our financial statements.
 To minimize the income volatility resulting from the remeasurement of net monetary assets and payables denominated in a currency other than the functional currency, we enter into foreign currency forward contracts, which are considered economic hedges. The objective is to offset the gain or loss from remeasurement with the gain or loss from the fair market valuation of the forward contract. These derivative instruments are not designated as hedges. Gains or losses are recorded directly to the Consolidated Statements of Net Income.
 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. In order to minimize movements in certain investments, in 2022 we began entering into foreign exchange forwards designated as net investment hedges. These forwards are utilized to hedge portions of our net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. The change in fair value related to the spot-to-forward rate difference is recorded as other income (expense) with all other changes in fair value deferred and reported as components of AOCL. The unrealized gain or loss is classified into income in the same period when the foreign subsidiary is sold or substantially liquidated.
 We are exposed to fluctuations in commodity prices due to contractual agreements with component suppliers. In order to protect ourselves against future price volatility and, consequently, fluctuations in gross margins, we periodically enter into commodity swap and forward contracts with designated banks and other counterparties to fix the cost of certain raw material purchases with the objective of minimizing changes in inventory cost due to market price fluctuations. These commodity swaps are designated and qualify as cash flow hedges. At December 31, 2024, realized and unrealized gains and losses related to these hedges were not material to our financial statements. We also enter into physical forward contracts, which qualify for the normal purchases scope exception and are treated as purchase commitments. Additional information on the physical forwards is included in NOTE 14, "COMMITMENTS AND CONTINGENCIES."
 We are exposed to market risk from fluctuations in interest rates. We manage our exposure to interest rate fluctuations through the use of interest rate swaps. The objective is to more effectively balance our borrowing costs and interest rate risk for current and future exposure. The gain or loss on the swaps as well as the offsetting gain or loss on the hedged item are recognized in current income as interest expense. For more detail on our interest rate swaps, see NOTE 20, "DERIVATIVES."
 We record all derivatives at fair value in our financial statements. Cash flows related to derivatives that are designated as hedges are classified in the same manner as the item being hedged, while cash flows related to derivatives that are not designated as hedges are included in cash flows from investing activities in our Consolidated Statements of Cash Flows.

 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. When material, we adjust the value of our derivative contracts for counter-party or our credit risk. None of our derivative instruments are subject to collateral requirements.
 Income Tax Accounting
 We determine our income tax expense using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Future tax benefits of net operating loss and credit carryforwards are also recognized as deferred tax assets. We evaluate the recoverability of our deferred tax assets each quarter by assessing the likelihood of future profitability and available tax planning strategies that could be implemented to realize our net deferred tax assets. A valuation allowance is recorded to reduce the tax assets to the net value management believes is more likely than not to be realized. In the event our operating performance deteriorates, future assessments could conclude that a larger valuation allowance will be needed to further reduce the deferred tax assets. In addition, we operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. We accrue for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions. We believe we made adequate provisions for income taxes for all years that are subject to audit based upon the latest information available. A more complete description of our income taxes and the future benefits of our net operating loss and credit carryforwards is disclosed in NOTE 4, "INCOME TAXES."
 Cash and Cash Equivalents
 Cash equivalents are defined as short-term, highly liquid investments with an original maturity of 90 days or less at the time of purchase. The carrying amounts reflected in our Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to the short-term maturity of these investments.
 Cash payments for income taxes and interest were as follows:

 2024
 2023
 2022

 Cash payments for income taxes, net of refunds
 $
 1,175
 $
 1,181
 $

 Cash payments for interest, net of capitalized interest

 Marketable Securities
 Debt securities are classified as "held-to-maturity," "available-for-sale" or "trading." We determine the appropriate classification of debt securities at the time of purchase and re-evaluate such classifications at each balance sheet date. At December 31, 2024 and 2023, all of our debt securities were classified as available-for-sale. Debt and equity securities are carried at fair value with the unrealized gain or loss, net of tax, reported in other comprehensive income and other income, respectively. For debt securities, unrealized losses considered to be "other-than-temporary" are recognized currently in other income. The cost of securities sold is based on the specific identification method. The fair value of most investment securities is determined by currently available market prices. Where quoted market prices are not available, we use the market price of similar types of securities that are traded in the market to estimate fair value. See NOTE 5, "MARKETABLE SECURITIES," for a detailed description of our investments in marketable securities.
 Accounts Receivable and Allowance for Doubtful Accounts
 Trade accounts receivable represent amounts billed to customers and not yet collected or amounts that were earned, but may not be billed until the passage of time, and are recorded when the right to consideration becomes unconditional. Trade accounts receivable are recorded at the invoiced amount, which approximates net realizable value, and generally do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of expected credit losses in our existing accounts receivable. We determine the allowance based on our historical collection experience and by performing an analysis of our accounts receivable in light of the current economic environment. This estimate of expected losses reflects those losses expected to occur over the contractual life of the receivable. We review our allowance for doubtful accounts on a regular basis. In addition, when necessary, we provide an allowance for the full amount of specific accounts deemed to be uncollectible. Account balances are charged off against the allowance in the period in which we determine that it is probable the receivable will not be recovered. The allowance for doubtful accounts balances were $ 66 million and $ 75 million at December 31, 2024, and 2023, respectively, and bad debt write-offs were not material.

 Our inventories are stated at the lower of cost or net realizable value. For the years ended December 31, 2024 and 2023, approximately 12 percent and 12 percent, respectively, of our consolidated inventories (primarily heavy-duty and high-horsepower engines and parts) were valued using the last-in, first-out (LIFO) cost method. The cost of other inventories is generally valued using the first-in, first-out (FIFO) cost method. Our inventories at interim and year-end reporting dates include estimates for adjustments related to annual physical inventory results and for inventory cost changes under the LIFO cost method. Due to significant movements of partially-manufactured components and parts between manufacturing plants, we do not internally measure, nor do our accounting systems provide, a meaningful segregation between raw materials and work-in-process. See NOTE 6, "INVENTORIES," for additional information.
 Property, Plant and Equipment
 We record property, plant and equipment at cost, inclusive of assets under finance leases. We depreciate the cost of the majority of our property, plant and equipment using the straight-line method with depreciable lives ranging from 20 to 40 years for buildings and 3 to 15 years for machinery, equipment and fixtures. Finance lease asset amortization is recorded in depreciation expense. We expense normal maintenance and repair costs as incurred. Depreciation expense totaled $ 729 million, $ 691 million and $ 557 million for the years ended December 31, 2024, 2023 and 2022, respectively. See NOTE 7, "PROPERTY, PLANT AND EQUIPMENT" and NOTE 8, "LEASES," for additional information.
 Impairment of Long-Lived Assets
 We review our long-lived assets for possible impairment whenever events or circumstances indicate that the carrying value of an asset or asset group may not be recoverable. We assess the recoverability of the carrying value of the long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment of a long-lived asset or asset group exists when the expected future pre-tax cash flows (undiscounted and without interest charges) estimated to be generated by the asset or asset group is less than its carrying value. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is measured based on the difference between the estimated fair value and carrying value of the asset or asset group. Assumptions and estimates used to estimate cash flows in the evaluation of impairment and the fair values used to determine the impairment are subject to a degree of judgment and complexity. Any changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets and could result in a future impairment charge.
 Leases
 We determine if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases greater than 12 months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. As most of our leases do not provide the information required to determine the implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. This rate is determined considering factors such as the lease term, our credit standing and the economic environment of the location of the lease. We use the implicit rate when readily determinable.
 Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases that have a term of 12 months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or a liability.
 Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for finance leases is generally front-loaded as the finance lease ROU asset is depreciated on a straight-line basis, but interest expense on the liability is recognized utilizing the interest method that results in more expense during the early years of the lease. We have lease agreements with lease and non-lease components, primarily related to real estate, vehicle and information technology (IT) assets. For vehicle and real estate leases, we account for the lease and non-lease components as a single lease component. For IT leases, we allocate the payment between the lease and non-lease components based on the relative value of each component. See NOTE 8, "LEASES," for additional information.
 Goodwill
 We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform an annual quantitative goodwill impairment test. We have elected this option on certain reporting units. The quantitative impairment test is only required if an entity determines through this qualitative analysis that it is more likely than not that the fair value of the reporting unit is less than its

 carrying value. In addition, the carrying value of goodwill must be tested for impairment on an interim basis in certain circumstances where impairment may be indicated. We perform our annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value.
 When we are required or opt to perform the quantitative impairment test, the fair value of each reporting unit is estimated with either the income approach or the market approach. Our income approach method uses a discounted cash flow model in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate rate of return. Our reporting units are generally defined as one level below an operating segment. However, there are two situations where we have aggregated two or more reporting units which share similar economic characteristics and thus are aggregated into a single reporting unit for testing purposes. These two situations are described further below:
 • Within our Accelera segment, our fuel cell and electrolyzer businesses were aggregated into a single reporting unit and
 • Our Distribution segment is considered a single reporting unit as it is managed geographically and all regions share similar economic characteristics and provide similar products and services.
 The discounted cash flow model requires us to make projections of revenue, gross margin, operating expenses, working capital investment and fixed asset additions for the reporting units over a multi-year period. Additionally, management must estimate a weighted-average cost of capital, which reflects a market rate, for each reporting unit for use as a discount rate. The discounted cash flows are compared to the carrying value of the reporting unit and, if less than the carrying value, the difference is recorded as a goodwill impairment loss. In addition, we also perform sensitivity analyses to determine how much our forecasts can fluctuate before the fair value of a reporting unit would be lower than its carrying amount. Future changes in the judgments, assumptions and estimates that are used in our goodwill impairment testing, including discount rates or future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future. An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.
 Effective October 31, 2024, we changed our annual goodwill impairment testing date for all reporting units from the last day of our fiscal third quarter to October 31 to better align with the timing of our annual long-term planning process. Accordingly, management determined that the change in accounting principle is preferable. This change was applied prospectively from October 31, 2024. We determined that it is impracticable to objectively ascertain projected cash flows and related valuation estimates that would have been used as of each October 31 of prior reporting periods without the use of hindsight. This change was not material to our Consolidated Financial Statements as it did not delay, accelerate or avoid any potential goodwill impairment charges. To ensure that no lapse greater than twelve months occurred, we performed an impairment test, for all reporting units, as of the end of our 2024 fiscal third quarter and noted no impairment. We completed our annual impairment testing as of October 31, 2024, and noted no impairment.
 At December 31, 2024, our recorded goodwill was $ 2.4 billion, of which approximately 31 percent resided in the drivetrain and braking systems reporting unit. Changes in our projections or estimates, a deterioration of our operating results and the related cash flow effect or a significant increase in the discount rate could decrease the estimated fair value of our reporting units and result in a future impairment of goodwill. See NOTE 9, "GOODWILL AND OTHER INTANGIBLE ASSETS," for additional information.
 Other Intangible Assets
 We capitalize other intangible assets, such as trademarks, patents and customer relationships, that were acquired either individually or with a group of other assets. These intangible assets are amortized on a straight-line basis over their estimated useful lives generally ranging from 3 to 25 years. Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. See NOTE 9, "GOODWILL AND OTHER INTANGIBLE ASSETS," for additional information.
 Software
 We capitalize software that is developed or obtained for internal use. Software costs are amortized on a straight-line basis over their estimated useful lives generally ranging from 2 to 12 years. Software assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. Upgrades and enhancements are capitalized if they result in significant modifications that enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion and business process reengineering costs are expensed in the period in which they are incurred. See NOTE 9, "GOODWILL AND OTHER INTANGIBLE ASSETS," for additional information.
 Warranty
 We estimate and record a liability for base warranty programs at the time our products are sold. Our estimates are based on historical experience and reflect management's best estimates of expected costs at the time products are sold and subsequent adjustment to those

 expected costs when actual costs differ. Factors considered in developing these estimates included component failure rates, repair costs and the point of failure within the product life cycle. As a result of the uncertainty surrounding the nature and frequency of product campaigns, the liability for such campaigns is recorded when we commit to a recall action or when a recall becomes probable and estimable, which generally occurs when it is announced. The liability for these campaigns is reflected in the provision for product campaigns. We review and assess the liability for these programs on a quarterly basis. We also assess our ability to recover certain costs from our suppliers and record a receivable when we believe a recovery is probable. In addition to costs incurred on warranty and product campaigns, from time to time we also incur costs related to customer satisfaction programs for items not covered by warranty. We accrue for these costs when agreement is reached with a specific customer. These costs are not included in the provision for warranties, but are included in cost of sales. In addition, we sell extended warranty coverage on most of our engines. See Extended Warranty policy discussion above and NOTE 13, "PRODUCT WARRANTY LIABILITY," for additional information.
 Contingent Liabilities
 We record an accrual for contingent liabilities when the amounts are probable and estimable. As the cash flow associated with most of our contingent liabilities cannot be reasonably predicted, we record our estimated obligations on an undiscounted basis. In addition, our accrual does not include amounts for estimated legal defense costs as those are expensed in the period in which they are incurred.
 Environmental Credits
 From time to time, we purchase certain forms of environmental credits from third parties to satisfy obligations with various regulatory agencies when we do not generate enough credits internally to satisfy those obligations. Purchased credits are initially recorded at cost and expensed when utilized to satisfy the related regulatory obligation. Amounts expected to be utilized in the next twelve months are reflected as current assets. As of December 31, 2024, we had $ 120 million of credits of which $ 56 million was recorded in other current assets and $ 64 million was recorded in other intangible assets, net in our Consolidated Balance Sheets.
 Research and Development
 Our research and development programs are focused on product improvements, product extensions, innovations and cost reductions for our customers. Research and development expenditures include salaries, contractor fees, building costs, utilities, testing, technical IT expenses, administrative expenses and allocation of corporate costs and are expensed, net of contract reimbursements, when incurred. From time to time, we enter into agreements with customers and government agencies to fund a portion of the research and development costs of a particular project. When not associated with a sales contract, we generally account for these reimbursements as an offset to the related research and development expenditure. Research and development expenses, net of contract reimbursements, were $ 1.4 billion, $ 1.4 billion and $ 1.2 billion for the years ended December 31, 2024, 2023 and 2022, respectively. Contract reimbursements were $ 72 million, $ 81 million and $ 110 million for the years ended December 31, 2024, 2023 and 2022, respectively.
 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. Joint venture transfer prices may differ from normal selling prices. Certain joint venture agreements transfer product at cost, some transfer product on a cost-plus basis, and others transfer product at market value.
 The following is a summary of sales to and purchases from nonconsolidated equity investees:

 2024
 2023
 2022

 Sales to nonconsolidated equity investees
 $
 1,392
 $
 1,548
 $
 1,197

 Purchases from nonconsolidated equity investees
 2,463
 2,628
 1,838

 The following is a summary of accounts receivable from and accounts payable to nonconsolidated equity investees:

 2024
 2023
 Balance Sheet Location

 Accounts receivable from nonconsolidated equity investees
 $
 $
 Accounts and notes receivable, net

 Accounts payable to nonconsolidated equity investees

 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 December 31, 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 Consolidated Balance Sheets. Amounts due to the financial intermediaries reflected in accounts payable at December 31, 2024, and 2023, were $ 142 million and $ 199 million, respectively.
 The following table summarizes the changes in amounts due to financial intermediaries reflected in accounts payable:

 2024
 2023

 Balance at the beginning of year
 $
 $

 Additional invoices presented for payment
 1,141

 Payments to financial intermediaries
 ( 850)
 ( 1,274)

 Foreign currency translation adjustments and other
 ( 1)

 Balance at end of period
 $
 $

 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 will classify proceeds received from the sales of accounts receivable as an operating cash flow in our Consolidated Statements of Cash Flows, and will we record the discount in other income, net in our Consolidated Statements of Net Income when the program is active. There was no activity under the program during the year ended December 31, 2024.
 Government Assistance
 From time to time, we receive assistance from government agencies primarily related to two areas (1) expense reimbursement and funding grants in the form of cash in conjunction with research and development projects and (2) incentives primarily related to investments in new or existing facilities. The grants and related projects range in term from 1 to 6 years. Generally, the grant awards for research are payable to us when we achieve specific milestones or deliverables. Certain grant awards are subject to audit, whereby non-compliance may result in a refund to the government agency. Grants related to investments supporting facilities are typically in the form of reimbursement for capital assets or expenses such as training the employees at those facilities.
 We recognize grant awards related to research and development as an offset of the related research and development expenditure when the awards become payable upon us meeting a specific milestone or deliverable. We recognize grant awards for reimbursement of capital as a reduction in value of the related fixed asset. We recognize grants for reimbursement of training or other expenses as an offset to the related expense. For the years ended December 31, 2024, and 2023, government grants did not have a material impact on our financial statements as a whole, and we did not have any individually material grant awards.

 RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Accounting Pronouncements Recently Adopted
 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 adopted the new standard in the fourth quarter of 2024. The new required disclosures are included in NOTE 25, "OPERATING SEGMENTS."
 Accounting Pronouncements Issued But Not Yet Effective
 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. The adoption of this standard is not expected to have a material impact on our Consolidated Financial Statements.
 In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)", which requires public business entities to disclose in the notes to the financial statements more detailed information about the types of expenses included in certain expense captions in the consolidated financial statements, including purchases of inventory, employee compensation, and depreciation and amortization. The amendments are effective for us beginning with our 2027 annual period and in interim periods beginning in 2028. Early adoption is permitted. The ASU may be adopted prospectively or retrospectively. We are currently evaluating the impact of ASU 2024-03 on our Consolidated Financial Statements and related disclosures.

 NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS
 Long-term Maintenance Agreements
 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, at December 31, 2024, was $ 5.4 billion. We expect to recognize the related revenue of $ 2.5 billion over the next 12 months and $ 2.9 billion over periods up to 10 years. See NOTE 13,"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:

 2024
 2023

 Unbilled revenue
 $
 $

 Deferred revenue
 2,412
 2,186

 We recognized revenue of $ 850 million and $ 733 million in 2024 and 2023, respectively, that was included in the deferred revenue balance at the beginning of each year.

 Disaggregation of Revenue
 Consolidated Revenue
 The table below presents our consolidated sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer.

 2024
 2023
 2022

 United States
 $
 19,422
 $
 19,302
 $
 15,833

 China
 2,948
 3,115
 2,390

 India
 1,779
 1,678
 1,392

 Other international
 9,953
 9,970
 8,459

 Total net sales
 $
 $
 $

 Segment Revenue
 Engine segment external sales by market were as follows:

 2024
 2023
 2022

 Heavy-duty truck
 $
 3,320
 $
 3,391
 $
 2,995

 Medium-duty truck and bus
 3,100
 2,622
 2,412

 Light-duty automotive
 1,585
 1,748
 1,704

 Total on-highway
 8,005
 7,761
 7,111

 Off-highway
 1,113
 1,088

 $
 8,987
 $
 8,874
 $
 8,199

 Components segment external sales by business were as follows:

 2024
 2023
 2022

 Drivetrain and braking systems
 $
 4,731
 $
 4,822
 $
 1,879

 Emission solutions
 3,180
 3,425
 3,086

 Components and software
 1,106
 1,225
 1,030

 Automated transmissions

 Atmus
 (1)

 1,345
 1,259

 $
 9,894
 $
 11,531
 $
 7,847

 (1) Included sales through the March 18, 2024, divestiture. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 Beginning in the second quarter of 2024, we realigned certain businesses within our Components segment to be consistent with how our segment leader 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.

 Distribution segment external sales by region were as follows:

 2024
 2023
 2022

 North America
 $
 7,617
 $
 7,054
 $
 5,948

 Asia Pacific
 1,243
 1,091
 1,011

 Europe
 1,179

 China

 India

 Africa and Middle East

 Latin America

 $
 11,352
 $
 10,199
 $
 8,901

 Distribution segment external sales by product line were as follows:

 2024
 2023
 2022

 Parts
 $
 3,966
 $
 4,052
 $
 3,809

 Power generation
 3,961
 2,496
 1,767

 Service
 1,747
 1,664
 1,555

 Engines
 1,678
 1,987
 1,770

 $
 11,352
 $
 10,199
 $
 8,901

 Power Systems segment external sales by product line were as follows:

 2024
 2023
 2022

 Power generation
 $
 1,896
 $
 1,698
 $
 1,658

 Industrial
 1,130

 Generator technologies

 $
 3,500
 $
 3,125
 $
 2,951

 NOTE 3. INVESTMENTS IN EQUITY INVESTEES
 Investments and advances related to equity method investees and our ownership percentages were as follows:

 Ownership

 Dollars in millions
 percentage
 2024
 2023

 Komatsu alliances
 20 - 50 %

 $
 $

 Amplify Cell Technologies, LLC
 30 %
 —

 Beijing Foton Cummins Engine Co., Ltd.
 50 %

 Sistemas Automotrices de Mexico S.A. de C.V.
 50 %

 Dongfeng Cummins Engine Company, Ltd.
 50 %

 Automotive Axles Limited
 36 %

 Chongqing Cummins Engine Company, Ltd.
 50 %

 Tata Cummins, Ltd.
 50 %

 Cummins-Scania XPI Manufacturing, LLC
 50 %

 Freios Master
 49 %

 Other
 Various

 Investments and advances related to equity method investees

 $
 1,889
 $
 1,800

 We have approximately $ 827 million in our investment account at December 31, 2024, that represents cumulative undistributed income in our equity investees. Dividends received from our unconsolidated equity investees were $ 308 million, $ 257 million and $ 318 million in 2024, 2023 and 2022, respectively.

 Equity, royalty and interest income from investees, net of applicable taxes, was as follows:

 2024
 2023
 2022

 Manufacturing entities

 Dongfeng Cummins Engine Company, Ltd.
 $
 $
 $

 Chongqing Cummins Engine Company, Ltd.

 Beijing Foton Cummins Engine Co., Ltd.

 Tata Cummins, Ltd.

 All other manufacturers
 (1)

 (2)

 Distribution entities

 Komatsu Cummins Chile, Ltda.

 All other distributors

 Cummins share of net income

 Royalty and interest income

 $
 $
 $

 (1) Included a $ 17 million impairment of our joint ventures in the fourth quarter of 2024 related to Accelera strategic reorganization actions. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," for additional information

 (2) Included a $ 28 million impairment of our joint venture with KAMAZ and $ 3 million of royalty charges as part of our costs associated with the indefinite suspension of our Russian operations. See NOTE 24, "RUSSIAN OPERATIONS," for additional information.

 Manufacturing Entities
 Our manufacturing joint ventures were generally formed with customers and are primarily intended to allow us to increase our market penetration in geographic regions, reduce capital spending, streamline our supply chain management and develop technologies. Our largest manufacturing joint ventures are based in China and are included in the list below. Our engine manufacturing joint ventures are supplied by our Components segment in the same manner as it supplies our wholly-owned Engine segment and Power Systems segment manufacturing facilities. Our Components segment joint ventures and wholly-owned entities provide axles, drivelines, brakes and suspension systems for commercial diesel and natural gas applications, aftertreatment systems, turbochargers, fuel systems, valvetrain technologies, automated transmissions and electronics that are used with our engines as well as some competitors' products. The results and investments in our joint ventures in which we have 50 percent or less ownership interest (except for Eaton Cummins Automated Transmission Technologies joint venture, which is consolidated due to our majority voting interest) are included in equity, royalty and interest income from investees and investments and advances related to equity method investees in our Consolidated Statements of Net Income and Consolidated Balance Sheets, respectively.
 • Dongfeng Cummins Engine Company, Ltd. - Dongfeng Cummins Engine Company, Ltd. (DCEC) is a joint venture in China with Dongfeng Automotive Co. Ltd., a subsidiary of Dongfeng Motor Corporation and one of the largest medium-duty and heavy-duty truck manufacturers in China. DCEC produces 3.9 liter to 14.5 liter diesel engines with a power range from 80 to 760 horsepower, natural gas engines and automated transmissions. On-highway engines are used in multiple applications in light-duty and medium-duty trucks, special purpose vehicles, buses and heavy-duty trucks with a main market in China. Off-highway engines are used in a variety of construction, power generation, marine and agriculture markets in China.
 • Chongqing Cummins Engine Company, Ltd. - Chongqing Cummins Engine Company, Ltd. is a joint venture in China with Chongqing Machinery and Electric Co. Ltd. This joint venture manufactures several models of our heavy-duty and high-horsepower diesel engines primarily serving the industrial and stationary power markets in China.
 • Beijing Foton Cummins Engine Co., Ltd. - Beijing Foton Cummins Engine Co., Ltd. is a joint venture in China with Beiqi Foton Motor Co., Ltd., a commercial vehicle manufacturer, which has two distinct lines of business - a light-duty business and a heavy-duty business. The light-duty business produces our families of ISF 2.5 liter to 4.5 liter high performance light-duty diesel engines in Beijing. These engines are used in light-duty and medium-duty commercial trucks, pick-up trucks, buses, multipurpose and sport utility vehicles with main markets in China and Brazil. Certain types of small construction equipment and industrial applications are also served by these engine families. The heavy-duty business produces 7.0 liter to 14.5 liter high performance heavy-duty diesel and natural gas engines in Beijing. Certain types of construction equipment and industrial applications are also served by these engine families.

 • Tata Cummins, Ltd. - Tata Cummins, Ltd. is a joint venture in India with Tata Motors Ltd., the largest automotive company in India and a member of the Tata group of companies. This joint venture manufactures Cummins' 3.8 to 8.9 liter diesel and natural gas engines in India with a power range from 75 to 400 horsepower for use in trucks and buses manufactured by Tata Motors, as well as for various on-highway, industrial and power generation applications for Cummins.
 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 received all government approvals and began operations in May 2024, but is not expected to begin production until 2027. 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 each own 30 percent of the joint venture and have two board positions, while EVE Energy owns 10 percent and has 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 is not consolidated. We account for the joint venture using the equity method. As of December 31, 2024, we had contributed $ 211 million, and our maximum remaining required contribution to the joint venture was $ 619 million, which could be reduced by future government incentives received by the joint venture. In addition, we are required to purchase 33 percent of the joint venture's output in the future or be subject to certain penalties.
 Distribution Entities
 We have an extensive worldwide distributor and dealer network through which we sell and distribute our products and services. Generally, our distributors are divided by geographic region with some of our distributors being wholly-owned by Cummins, some partially-owned and some independently owned. We consolidate all wholly-owned distributors and partially-owned distributors where we are the primary beneficiary and account for other partially-owned distributors using the equity method of accounting.
 Komatsu Cummins Chile, Ltda. - Komatsu Cummins Chile, Ltda. is a joint venture with Komatsu America Corporation. The joint venture is a distributor that offers the full range of our products and services to customers and end-users in Chile and Peru.
 In certain cases where we own a partial interest in a distributor, we may be obligated to purchase the other equity holders' interests if certain events occur (such as the death or resignation of the distributor principal or a change in control of Cummins Inc.). The purchase consideration of the equity interests may be determined based on the fair value of the distributor's assets. Repurchase obligations and practices vary by geographic region.
 All distributors that are partially-owned are considered to be related parties in our Consolidated Financial Statements.
 Equity Investee Financial Summary
 Summary financial information for our equity investees was as follows:

 Years ended and at December 31,

 2024
 2023
 2022

 Net sales
 $
 11,190
 $
 9,998
 $
 7,501

 Gross margin
 1,760
 1,597
 1,211

 Cummins share of net income
 $
 $
 $

 Royalty and interest income

 Total equity, royalty and interest from investees
 $
 $
 $

 Current assets
 $
 6,626
 $
 4,922

 Long-term assets
 2,597
 2,021

 Current liabilities
 ( 4,203)
 ( 3,812)

 Long-term liabilities
 ( 549)
 ( 432)

 Net assets
 $
 4,471
 $
 2,699

 Cummins share of net assets
 $
 1,866
 $
 1,786

 NOTE 4. INCOME TAXES
 The following table summarizes income before income taxes:

 2024
 2023
 2022

 U.S. income (loss)
 $
 2,857
 $
 ( 541)
 $
 1,336

 Foreign income
 2,046
 2,167
 1,483

 Income before income taxes
 $
 4,903
 $
 1,626
 $
 2,819

 Income tax expense (benefit) consisted of the following:

 2024
 2023
 2022

 Current

 U.S. federal and state
 $
 $
 $

 Foreign

 Total current income tax expense
 1,044
 1,243

 Deferred

 U.S. federal and state
 ( 241)
 ( 468)
 ( 229)

 Foreign
 ( 45)

 Total deferred income tax benefit
 ( 209)
 ( 457)
 ( 274)

 Income tax expense
 $
 $
 $

 A reconciliation of the statutory U.S. federal income tax rate to the effective tax rate was as follows:

 2024
 2023
 2022

 Statutory U.S. federal income tax rate
 21.0
 %
 21.0
 %
 21.0
 %

 State income tax, net of federal effect
 1.2
 ( 0.4)
 1.3

 Differences in rates and taxability of foreign subsidiaries and joint ventures (1)

 4.2
 11.9
 3.1

 Research tax credits
 ( 1.5)
 ( 4.7)
 ( 1.8)

 Foreign derived intangible income
 ( 1.3)
 ( 4.2)
 ( 2.0)

 Settlement Agreements, federal impact (2)

 —
 22.4
 —

 Settlement Agreements, state impact (2)

 —
 2.1
 —

 Non-taxable Atmus gain (3)

 ( 6.1)
 —
 —

 ( 0.5)
 0.2
 1.0

 Effective tax rate
 17.0
 %
 48.3
 %
 22.6
 %

 (1) Included the jurisdictional mix of pre-tax income and impact of actual and planned repatriation of earnings back to the U.S.

 (2) See NOTE 14, "COMMITMENTS AND CONTINGENCIES," for additional information.

 (3) See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 The year ended December 31, 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 $ 59 million, primarily due to $ 52 million of favorable return to provision adjustments, $ 22 million of favorable share-based compensation tax benefits, $ 21 million of favorable adjustments related to audit settlements and $ 20 million of favorable adjustments from tax return amendments, partially offset by $ 50 million of unfavorable adjustments related to Accelera strategic reorganization actions and net $ 6 million of other unfavorable adjustments. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," and NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," for additional information.

 The year ended December 31, 2023, contained unfavorable net discrete items of $ 397 million, primarily due to $ 398 million in the fourth quarter related to the $ 2.0 billion charge from the Settlement Agreements, $ 22 million of unfavorable adjustments for uncertain tax positions and $ 3 million of net unfavorable other discrete tax items, partially offset by $ 21 million of favorable return to provision adjustments and $ 5 million of favorable share-based compensation tax benefits. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," for additional information.
 The year ended December 31, 2022, contained discrete tax items that netted to zero, primarily due to $ 31 million of favorable changes in accrued withholding taxes, $ 29 million of favorable changes in tax reserves, $ 15 million of favorable valuation allowance adjustments and $ 9 million of favorable other net discrete items, offset by $ 69 million of unfavorable tax costs associated with internal restructuring ahead of the planned separation of Atmus and $ 15 million of unfavorable return to provision adjustments related to the 2021 filed tax returns.
 At December 31, 2024, $ 5.6 billion of non-U.S. earnings are considered indefinitely reinvested in operations outside the U.S. for which deferred taxes were not provided. Determination of the related deferred tax liability, if any, is not practicable because of the complexities associated with the hypothetical calculation.
 Carryforward tax benefits and the tax effect of temporary differences between financial and tax reporting that give rise to net deferred tax assets (liabilities) were as follows:

 2024
 2023

 Deferred tax assets

 U.S. and state carryforward benefits
 $
 $

 Foreign carryforward benefits

 Employee benefit plans

 Warranty expenses

 Lease liabilities

 Capitalized research and development expenditures

 Accrued expenses

 Other

 Gross deferred tax assets
 3,020
 2,758

 Valuation allowance
 ( 872)
 ( 789)

 Total deferred tax assets
 2,148
 1,969

 Deferred tax liabilities

 Property, plant and equipment
 ( 371)
 ( 367)

 Unremitted income of foreign subsidiaries and joint ventures
 ( 162)
 ( 179)

 Employee benefit plans
 ( 289)
 ( 278)

 Lease assets
 ( 109)
 ( 123)

 Intangible assets
 ( 315)
 ( 406)

 Other
 ( 172)
 ( 64)

 Total deferred tax liabilities
 ( 1,418)
 ( 1,417)

 Net deferred tax assets
 $
 $

 Our 2024 U.S. carryforward benefits include $ 254 million of state credit and net operating loss carryforward benefits that begin to expire in 2025. Our foreign carryforward benefits include $ 653 million of net operating loss carryforwards that begin to expire in 2025. A valuation allowance is recorded to reduce the gross deferred tax assets to an amount we believe is more likely than not to be realized. The valuation allowance at December 31, 2024 was $ 872 million and increased by a net $ 83 million. The valuation allowance at December 31, 2023 was $ 789 million and increased by a net $ 85 million. The valuation allowance at December 31, 2022 was $ 704 million and increased by a net $ 344 million, primarily due to the Meritor acquisition. The valuation allowance is primarily attributable to the uncertainty regarding the realization of a portion of the U.S. state and foreign net operating loss and tax credit carryforward benefits.

 Our Consolidated Balance Sheets contain the following tax related items:

 2024
 2023

 Prepaid expenses and other current assets

 Refundable income taxes
 $
 $

 Other assets

 Deferred income tax assets
 1,119
 1,082

 Long-term refundable income taxes

 Other accrued expenses

 Income tax payable

 Long-term income taxes

 Deferred income tax liabilities

 A reconciliation of unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 was as follows:

 2024
 2023
 2022

 Balance at beginning of year
 $
 $
 $

 Additions to tax positions due to acquisitions
 —

 Additions to current year tax positions

 Additions to prior years' tax positions

 Reductions to prior years' tax positions
 ( 18)
 ( 1)
 ( 1)

 Reductions for tax positions due to settlements with taxing authorities
 ( 38)
 —
 ( 28)

 Balance at end of year
 $
 $
 $

 Included in the December 31, 2024, 2023 and 2022, balances are $ 289 million, $ 314 million and $ 270 million, respectively, related to tax positions that, if recognized, would favorably impact the effective tax rate in future periods. We also accrued interest expense related to the unrecognized tax benefits of $ 31 million, $ 33 million and $ 18 million as of December 31, 2024, 2023 and 2022, respectively. We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense.
 Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although we believe that adequate provision has been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on our earnings. Conversely, if these issues are resolved favorably in the future, the related provision would be reduced, thus having a positive impact on earnings.
 As a result of our global operations, we file income tax returns in various jurisdictions including U.S. federal, state and foreign jurisdictions. We are routinely subject to examination by taxing authorities throughout the world, including Australia, Belgium, Brazil, Canada, China, France, India, Mexico, the U.K. and the U.S. With few exceptions, our U.S. federal, major state and foreign jurisdictions are no longer subject to income tax assessments for years before 2018.

 NOTE 5. MARKETABLE SECURITIES
 A summary of marketable securities, all of which are classified as current, was as follows:

 2024
 2023

 Cost
 Gross unrealized gains/(losses) (1)

 Estimated
fair value
 Cost
 Gross unrealized gains/(losses) (1)

 Estimated
fair value

 Equity securities

 Level 1

 Publicly-traded shares
 $
 $
 ( 6)
 $
 $
 —
 $
 —
 $
 —

 Level 2

 Debt mutual funds
 —

 Certificates of deposit
 —
 —

 Equity mutual funds

 Debt securities
 —
 —

 Marketable securities
 $
 $
 $
 $
 $
 $

 (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 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 Level 2 or 3 during 2024 or 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:
 • 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.
 • 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.
 • 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:

 2024
 2023
 2022

 Proceeds from sales of marketable securities
 $
 1,227
 $
 1,075
 $

 Proceeds from maturities of marketable securities

 Investments in marketable securities - liquidations
 $
 1,460
 $
 1,334
 $
 1,151

 NOTE 6. INVENTORIES
 Inventories are stated at the lower of cost or net realizable value. Inventories included the following:

 2024
 2023

 Finished products
 $
 2,875
 $
 2,770

 Work-in-process and raw materials
 3,086
 3,156

 Inventories at FIFO cost
 5,961
 5,926

 Excess of FIFO over LIFO
 ( 219)
 ( 249)

 $
 5,742
 $
 5,677

 In the fourth quarter of 2024, we wrote-off $ 107 million of inventory in our Accelera segment, mostly in work-in-process and raw materials. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," for additional information.

 NOTE 7. PROPERTY, PLANT AND EQUIPMENT
 Details of our property, plant and equipment balance were as follows:

 2024
 2023

 Land and buildings
 $
 3,012
 $
 3,039

 Machinery, equipment and fixtures
 7,266
 7,245

 Construction in process
 1,518
 1,390

 Property, plant and equipment, gross
 11,796
 11,674

 Less: Accumulated depreciation
 ( 5,440)
 ( 5,425)

 Property, plant and equipment, net
 $
 6,356
 $
 6,249

 In the fourth quarter of 2024, we impaired $ 61 million of long-lived assets in our Accelera segment. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," for additional information.

 NOTE 8. LEASES
 Our lease portfolio consists primarily of real estate and equipment leases. Our real estate leases primarily consist of land, office, distribution, warehousing and manufacturing facilities. These leases typically range in term from 2 to 50 years and may contain renewal options for periods up to 10 years at our discretion. Our equipment lease portfolio consists primarily of vehicles (including service vehicles), fork trucks and IT equipment. These leases typically range in term from two to three years and may contain renewal options. Our leases generally do not contain variable lease payments other than (1) certain foreign real estate leases which have payments indexed to inflation and (2) certain real estate executory costs (such as taxes, insurance and maintenance), which are paid based on actual expenses incurred by the lessor during the year. Our leases generally do not include residual value guarantees other than our service vehicle fleet, which has a residual guarantee based on a percentage of the original cost declining over the lease term.
 The components of our lease cost were as follows:

 2024
 2023
 2022

 Operating lease cost
 $
 $
 $

 Finance lease cost

 Amortization of right-of-use asset

 Interest expense

 Short-term lease cost

 Variable lease cost

 Total lease cost
 $
 $
 $

 Supplemental balance sheet information related to leases:

 2024
 2023
 Balance Sheet Location

 Assets

 Operating lease assets
 $
 $
 Other assets

 Finance lease assets (1)

 Property, plant and equipment, net

 Total lease assets
 $
 $

 Liabilities

 Current

 Operating lease liabilities
 $
 $
 Other accrued expenses

 Finance lease liabilities
 Current maturities of long-term debt

 Long-term

 Operating lease liabilities

 Finance lease liabilities
 Long-term debt

 Total lease liabilities
 $
 $

 (1) Finance lease assets were recorded net of accumulated amortization of $ 80 million and $ 77 million at December 31, 2024 and 2023.

 Supplemental cash flow and other information related to leases:

 2024
 2023
 2022

 Cash paid for amounts included in the measurement of lease liabilities

 Operating cash flows from operating leases
 $
 $
 $

 Operating cash flows from finance leases

 Financing cash flows from finance leases

 Right-of-use assets obtained in exchange for lease obligations

 Operating leases
 $
 $
 $

 Finance leases

 Additional information related to leases:

 2024
 2023

 Weighted-average remaining lease term (in years)

 Operating leases
 5.9
 5.2

 Finance leases
 7.8
 8.6

 Weighted-average discount rate

 Operating leases
 4.6
 %
 4.2
 %

 Finance leases
 6.0
 %
 5.0
 %

 Following is a summary of the future minimum lease payments related to finance and operating leases with terms of more than one year at December 31, 2024, together with the net present value of the minimum payments:

 Finance Leases
 Operating Leases

 2025
 $
 $

 2026

 2027

 2028

 2029

 After 2029

 Total minimum lease payments

 Interest
 ( 33)
 ( 83)

 Present value of net minimum lease payments
 $
 $

 NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS
 The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023:

 Distribution
 Total

 $
 1,752
 $
 $
 $
 $
 $
 2,343

 Acquisitions
 —
 —

 Foreign currency translation and other
 —
 —

 1,884
 2,499

 Acquisitions
 —
 —
 —

 Foreign currency translation and other
 ( 48)
 ( 2)
 —
 —
 —
 ( 50)

 Divestiture (1)

 ( 114)
 —
 —
 —
 —
 ( 114)

 $
 1,724
 $
 $
 $
 $
 $
 2,370

 (1) See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 Intangible assets that have finite useful lives are amortized over their estimated useful lives. The following table summarizes our other intangible assets:

 2024
 2023

 Amortizable intangible assets

 Software
 $
 $

 Less: Accumulated amortization
 ( 372)
 ( 323)

 Software, net

 Trademarks, patents, customer relationships and other
 2,685
 2,866

 Less: Accumulated amortization
 ( 819)
 ( 666)

 Trademarks, patents, customer relationships and other, net
 1,866
 2,200

 Unamortizable other intangible assets

 Other intangible assets, net
 $
 2,351
 $
 2,519

 Amortization expense for software and other intangibles totaled $ 324 million, $ 324 million and $ 223 million for the years ended December 31, 2024, 2023 and 2022, respectively. The projected amortization expense of our intangible assets, assuming no further acquisitions or dispositions, is as follows:

 2025
 2026
 2027
 2028
 2029

 Projected amortization expense
 $
 $
 $
 $
 $

 In the fourth quarter of 2024, we impaired $ 84 million of other intangible assets in our Accelera segment. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," for additional information.

 NOTE 10. PENSIONS AND OTHER POSTRETIREMENT BENEFITS
 Pension Plans
 We sponsor several pension plans covering substantially all employees. Generally, pension benefits for salaried employees are determined as a function of employee's compensation. Pension benefits for most hourly employees are determined similarly and as a function of employee's compensation, with the exception of a small group of hourly employees whose pension benefits were grandfathered in accordance with agreements with their union representation and are based on their years of service and compensation during active employment. The level of benefits and terms of vesting may vary among plans and are offered in accordance with applicable laws. Pension plan assets are administered by trustees and are principally invested in fixed income securities and equity securities. It is our policy to make contributions to our various qualified plans in accordance with statutory and contractual funding requirements, and any additional contributions we determine are appropriate.

 Obligations, Assets and Funded Status
 Benefit obligation balances presented below reflect the projected benefit obligation (PBO) for our pension plans. The changes in the benefit obligations, the various plan assets, the funded status of the plans and the amounts recognized in our Consolidated Balance Sheets for our significant pension plans at December 31 were as follows:

 2024
 2023
 2024
 2023

 Change in benefit obligation

 Benefit obligation at the beginning of the year
 $
 3,381
 $
 3,171
 $
 1,525
 $
 1,398

 Service cost

 Interest cost

 Actuarial (gain) loss
 ( 163)
 ( 133)

 Benefits paid from fund
 ( 328)
 ( 223)
 ( 108)
 ( 87)

 Benefits paid directly by employer
 ( 32)
 ( 25)
 —
 —

 Plan amendment
 —
 —
 —

 Foreign currency translation adjustments
 —
 —
 ( 23)

 Benefit obligation at end of year
 $
 3,167
 $
 3,381
 $
 1,350
 $
 1,525

 Change in plan assets

 Fair value of plan assets at beginning of year
 $
 3,826
 $
 3,828
 $
 1,720
 $
 1,670

 ( 128)
 ( 51)

 Employer contributions
 —

 Benefits paid from fund
 ( 328)
 ( 223)
 ( 108)
 ( 87)

 Foreign currency translation adjustments
 —
 —
 ( 25)

 Fair value of plan assets at end of year
 $
 3,706
 $
 3,826
 $
 1,468
 $
 1,720

 Funded status (including unfunded plans) at end of year
 $
 $
 $
 $

 Amounts recognized in consolidated balance sheets

 Pension assets
 $
 1,071
 $
 1,002
 $
 $

 Accrued compensation, benefits and retirement costs
 ( 29)
 ( 27)
 —
 —

 ( 503)
 ( 530)
 —
 —

 Net amount recognized
 $
 $
 $
 $

 Amounts recognized in accumulated other comprehensive loss

 Net actuarial loss
 $
 $
 $
 $

 Prior service cost

 Net amount recognized
 $
 $
 $
 $

 In addition to the pension plans in the above table, we also maintain less significant defined benefit pension plans in 15 other countries outside of the U.S. and the U.K. that comprise approximately 5 percent and 6 percent of our pension plan assets and benefit obligations, respectively, at December 31, 2024. These plans are reflected in other liabilities on our Consolidated Balance Sheets. In 2024 and 2023, we made $ 21 million and $ 16 million of contributions to these plans, respectively.

 The following table summarizes the total accumulated benefit obligation (ABO), the ABO for defined benefit pension plans with ABO in excess of plan assets and the PBO for defined benefit pension plans with PBO in excess of plan assets:

 2024
 2023
 2024
 2023

 Total ABO
 $
 3,132
 $
 3,334
 $
 1,334
 $
 1,504

 Plans with ABO in excess of plan assets

 ABO
 1,007
 1,067
 —
 —

 Plans with PBO in excess of plan assets

 PBO
 1,042
 1,116
 —
 —

 Components of Net Periodic Pension Cost (Income)
 The following table presents the net periodic pension cost (income) under our plans for the years ended December 31:

 2024
 2023
 2022
 2024
 2023
 2022

 Service cost
 $
 $
 $
 $
 $
 $

 Interest cost

 Expected return on plan assets
 ( 290)
 ( 277)
 ( 229)
 ( 102)
 ( 105)
 ( 87)

 Amortization of prior service cost

 Recognized net actuarial loss
 —

 Net periodic pension cost (income)
 $
 $
 $
 $
 —
 $
 ( 17)
 $
 ( 14)

 Other changes in benefit obligations and plan assets recognized in other comprehensive loss (income) for the years ended December 31 were as follows:

 2024
 2023
 2022

 Amortization of prior service cost
 $
 ( 3)
 $
 ( 3)
 $
 ( 2)

 Recognized net actuarial loss
 ( 25)
 ( 8)
 ( 26)

 Incurred prior service cost
 —

 Incurred actuarial loss

 Total recognized in other comprehensive loss
 $
 $
 $

 Total recognized in net periodic pension cost and other comprehensive loss
 $
 $
 $

 Assumptions
 The table below presents various assumptions used in determining the PBO for each year and reflects weighted-average percentages for the various plans as follows:

 2024
 2023
 2024
 2023

 Discount rate
 5.69
 %
 5.15
 %
 5.62
 %
 4.72
 %

 Cash balance crediting rate
 4.51
 %
 4.55
 %
 —
 —

 Compensation increase rate
 5.32
 %
 5.34
 %
 3.75
 %
 3.75
 %

 The table below presents various assumptions used in determining the net periodic pension cost and reflects weighted-average percentages for the various plans as follows:

 2024
 2023
 2022
 2024
 2023
 2022

 Discount rate
 5.15
 %
 5.55
 %
 3.31
 %
 4.72
 %
 4.99
 %
 2.26
 %

 Expected return on plan assets
 7.25
 %
 7.00
 %
 6.50
 %
 5.00
 %
 5.00
 %
 4.01
 %

 Compensation increase rate
 5.34
 %
 5.35
 %
 2.71
 %
 3.75
 %
 3.75
 %
 3.75
 %

 Plan Assets
 Our investment policies in the U.S. and U.K. provide for the rebalancing of assets to maintain our long-term strategic asset allocation. We are committed to this long-term strategy and do not attempt to time the market. Given empirical evidence that asset allocation is critical, rebalancing of the assets has and continues to occur, maintaining the proper weighting of assets to achieve the expected total portfolio returns. We believe that our portfolio is highly diversified and does not have any significant exposure to concentration risk. The plan assets for our defined benefit pension plans do not include any of our common stock or corporate bonds.
 U.S. Plan Assets
 For the U.S. qualified pension plans, our assumption for the expected return is greatly influenced by our objective to match assets and liabilities and the increase in bond yields. Projected returns are based primarily on broad, publicly traded equity and fixed income indices and forward-looking estimates of active portfolio and investment management. We expect additional positive returns from this active investment management. Based on the historical returns and forward-looking return expectations, we elected an assumption of 7.00 percent in 2025.
 To achieve these objectives, we established the following targets:

 Asset Class
 Plan Target

 U.S. equities
 %

 Non-U.S. equities
 %

 Global equities
 %

 Total equities
 %

 Real assets
 %

 Private equity/venture capital
 %

 Opportunistic credit
 %

 %

 Total
 %

 The fixed income component of the plans is structured to represent a custom bond benchmark that will closely hedge the change in the value of our liabilities. This component is structured in such a way that its benchmark covers approximately 100 percent of the plans' exposure to changes in its discount rate (AA corporate bond yields). In order to achieve a hedge on more than the targeted 71 percent of plan assets invested in fixed income securities, our Benefits Policy Committee (BPC) permits the fixed income managers, other managers or the custodian/trustee to utilize derivative securities, as part of a liability driven investment strategy to further reduce the plans' risk of changes in interest rates. However, all managers hired to manage assets for the trust are prohibited from using leverage unless approved by the BPC.

 U.K. Plan Assets
 The methodology used to determine the rate of return on the pension plan assets in the U.K. was based on establishing an equity-risk premium over current long-term bond yields adjusted based on target asset allocations. Our strategy with respect to our investments in these assets is to be invested in a suitable mixture of return-seeking assets such as equities, real estate and liability matching assets such as group annuity insurance contracts and duration matched bonds. To achieve these objectives, we established the following targets:

 Asset Class
 Plan Target

 Property/secure income assets
 %

 Credit/bank loans
 %

 Diversified strategies
 %

 Private equity
 %

 Fixed income/insurance annuity
 %

 Cash
 %

 Total
 %

 As part of our strategy in the U.K. we have not prohibited the use of any financial instrument, including derivatives. As in the U.S. plans, derivatives may be used to better match liability duration and are not used in a speculative way. The fixed income component of our portfolio hedges approximately 91 percent of the plans' exposure to interest rates and 92 percent of the plans' exposure to inflation. Based on the above discussion, we elected an assumption of 5.00 percent in 2025.
 Fair Value of U.S. Plan Assets
 The fair values of U.S. pension plan assets by asset category were as follows:

 Fair Value Measurements at December 31, 2024

 Quoted prices in active
markets for identical assets
(Level 1)
 Significant other
observable inputs
(Level 2)
 Significant
unobservable inputs
(Level 3)
 Total

 Equities

 U.S.
 $
 $
 —
 $
 —
 $

 —
 —

 Government debt
 —
 —

 Corporate debt

 U.S.
 —
 —

 —
 —

 Asset/mortgaged backed securities
 —
 —

 Net cash equivalents (1)

 —
 —

 Private markets and real assets (2)

 —
 —

 Net plan assets subject to leveling
 $
 $
 $
 $
 1,841

 Pending trade/purchases/sales

 ( 2)

 Accruals (3)

 Investments measured at net asset value
 1,855

 Net plan assets

 $
 3,706

 Fair Value Measurements at December 31, 2023

 Quoted prices in active
markets for identical assets
(Level 1)
 Significant other
observable inputs
(Level 2)
 Significant
unobservable inputs
(Level 3)
 Total

 Equities

 U.S.
 $
 $
 —
 $
 —
 $

 —
 —

 Government debt
 —
 —

 Corporate debt

 U.S.
 —
 —

 —
 —

 Asset/mortgaged backed securities
 —
 —

 Net cash equivalents (1)

 —
 —

 Private markets and real assets (2)

 —
 —

 Net plan assets subject to leveling
 $
 $
 $
 $
 1,997

 Pending trade/purchases/sales

 ( 16)

 Accruals (3)

 Investments measured at net asset value
 1,835

 Net plan assets

 $
 3,826

 (1) Cash equivalents included commercial paper, short-term government/agency, mortgage and credit instruments.

 (2) The instruments in private markets and real assets, for which quoted market prices are not available, are valued at their estimated fair value as determined by applicable investment managers or by audited financial statements of the funds. Private markets include equity, venture capital and private credit instruments and funds. Real assets include real estate and infrastructure.

 (3) Accruals include interest or dividends that were not settled at December 31.

 Certain of our assets are valued based on their respective net asset value (NAV) (or its equivalent), as an alternative to estimated fair value due to the absence of readily available market prices. The fair value of each such investment category was as follows:
 • U.S. and Non-U.S. Corporate Debt ($ 912 million and $ 915 million at December 31, 2024 and 2023, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
 • Asset/Mortgage Backed Securities ($ 327 million and $ 307 million at December 31, 2024 and 2023, respectively) - This asset type represents investments in fixed- and floating-rate loans. These funds are valued using NAVs and allow quarterly or more frequent redemptions.
 • U.S. and Non-U.S. Equities ($ 260 million and $ 222 million at December 31, 2024 and 2023, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
 • Government Debt ($ 235 million and $ 257 million at December 31, 2024 and 2023, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
 • Real Estate ($ 121 million and $ 134 million at December 31, 2024 and 2023, respectively) - This asset type represents different types of real estate including development property, industrial property, individual mortgages, office property, property investment companies and retail property. These funds are valued using NAVs and allow quarterly or more frequent redemptions.

 The reconciliation of Level 3 assets was as follows:

 Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)

 Private Markets
 Real Assets
 Total

 $
 $
 $

 Unrealized gains (losses) on assets still held at the reporting date
 ( 13)
 ( 7)

 Purchases, sales and settlements, net
 ( 28)
 ( 2)
 ( 30)

 Unrealized losses on assets still held at the reporting date
 ( 3)
 ( 6)
 ( 9)

 Purchases, sales and settlements, net
 ( 93)
 ( 2)
 ( 95)

 $
 $
 $

 Fair Value of U.K. Plan Assets
 The fair values of U.K. pension plan assets by asset category were as follows:

 Fair Value Measurements at December 31, 2024

 Quoted prices in active
markets for identical assets
(Level 1)
 Significant other
observable inputs
(Level 2)
 Significant
unobservable inputs
(Level 3)
 Total

 Government debt
 $
 —
 $
 $
 —
 $

 Corporate debt

 U.S.
 —
 —

 —
 —

 Net cash equivalents (1)

 —

 Insurance annuity
 —
 —

 Private markets and real assets (2)

 —
 —

 Net plan assets subject to leveling
 $
 $
 $
 $

 Pending trade/purchases/sales

 Accruals (3)

 Investments measured at net asset value

 Net plan assets

 $
 1,468

 Fair Value Measurements at December 31, 2023

 Quoted prices in active
markets for identical assets
(Level 1)
 Significant other
observable inputs
(Level 2)
 Significant
unobservable inputs
(Level 3)
 Total

 Equities

 U.S.
 $
 $
 —
 $
 —
 $

 —
 —

 Government debt
 —
 —

 Corporate debt

 U.S.
 —
 —

 —
 —

 Net cash equivalents (1)

 —

 Insurance annuity
 —
 —

 Private markets and real assets (2)

 —
 —

 Net plan assets subject to leveling
 $
 $
 $
 $

 Pending trade/purchases/sales

 Accruals (3)

 Investments measured at net asset value

 Net plan assets

 $
 1,720

 (1) Cash equivalents include commercial paper, short-term government/agency, mortgage and credit instruments.

 (2) The instruments in private markets and real assets, for which quoted market prices are not available, are valued at their estimated fair value as determined by applicable investment managers or by audited financial statements of the funds. Private markets include equity, venture capital and private credit instruments and funds. Real assets include real estate and infrastructure.

 (3) Accruals include interest or dividends that were not settled at December 31.

 Certain of our assets are valued based on their respective NAV (or its equivalent), as an alternative to estimated fair value due to the absence of readily available market prices. The fair value of each such investment category was as follows:
 • Government Debt ($ 434 million and $ 572 million at December 31, 2024 and 2023, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
 • U.S. and Non-U.S. Corporate Debt ($ 96 million and $ 71 million at December 31, 2024 and 2023, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
 • Asset/Mortgage Backed Securities ($ 92 million and $ 117 million at December 31, 2024 and 2023, respectively) - This asset type represents investments in fixed- and floating-rate loans. These funds are valued using NAVs and allow quarterly or more frequent redemptions.
 • Re-insurance ($ 4 million and $ 6 million at December 31, 2024 and 2023, respectively) - This commingled fund has a NAV that is determined on a monthly basis and the investment may be sold at that value.

 The reconciliation of Level 3 assets was as follows:

 Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)

 Insurance Annuity
 Real Assets
 Private Markets
 Total

 $
 $
 $
 $

 Unrealized gains (losses) on assets still held at the reporting date
 —
 ( 35)
 ( 27)

 Purchases, sales and settlements, net
 —
 ( 1)
 ( 251)
 ( 252)

 Unrealized (losses) gains on assets still held at the reporting date
 ( 53)
 —
 ( 52)

 Purchases, sales and settlements, net
 —
 ( 1)
 ( 1)
 ( 2)

 $
 $
 $
 $

 Level 3 Assets
 The investments in an insurance annuity contract, venture capital, private equity and real estate, for which quoted market prices are not available, are valued at their estimated fair value as determined by applicable investment managers or by quarterly financial statements of the funds. These financial statements are audited at least annually. In conjunction with our investment consultant and actuary, we monitor the fair value of the insurance contract as periodically reported by our insurer and their counterparty risk. The fair value of all real estate properties, held in the partnerships, are valued at least once per year by an independent professional real estate valuation firm. Fair value generally represents the fund's proportionate share of the net assets of the investment partnerships as reported by the general partners of the underlying partnerships. Some securities with no readily available market are initially valued at cost, utilizing independent professional valuation firms as well as market comparisons with subsequent adjustments to values which reflect either the basis of meaningful third-party transactions in the private market or the fair value deemed appropriate by the general partners of the underlying investment partnerships. In such instances, consideration is also given to the financial condition and operating results of the issuer, the amount that the investment partnerships can reasonably expect to realize upon the sale of the securities and any other factors deemed relevant. The estimated fair values are subject to uncertainty and therefore may differ from the values that would have been used had a ready market for such investments existed and such differences could be material.
 Estimated Future Contributions and Benefit Payments
 We plan to contribute approximately $ 52 million to our defined benefit pension plans in 2025. The table below presents expected future benefit payments under our pension plans:

 2025
 2026
 2027
 2028
 2029
 2030 - 2034

 Expected benefit payments
 $
 $
 $
 $
 $
 $
 1,919

 Other Pension Plans
 We also sponsor defined contribution plans for certain hourly and salaried employees. Our contributions to these plans were $ 126 million, $ 130 million and $ 110 million for the years ended December 31, 2024, 2023 and 2022.
 Other Postretirement Benefits
 Our OPEB plans provide various health care and life insurance benefits to eligible employees, who retire and satisfy certain age and service requirements, and their dependents. The plans are contributory and contain cost-sharing features such as caps, deductibles, coinsurance and spousal contributions. Employer contributions are limited by formulas in each plan. Retiree contributions for health care benefits are adjusted annually, and we reserve the right to change benefits covered under these plans. There were no plan assets for OPEB plans as our policy is to fund benefits and expenses for these plans as claims and premiums are incurred.

 Obligations and Funded Status
 Benefit obligation balances presented below reflect the accumulated postretirement benefit obligations for our OPEB plans. The changes in the benefit obligations, the funded status of the plans and the amounts recognized in our Consolidated Balance Sheets for our significant OPEB plans were as follows:

 2024
 2023

 Change in benefit obligation

 Benefit obligation at the beginning of the year
 $
 $

 Interest cost

 Plan participants' contributions

 Actuarial gain
 ( 18)
 ( 2)

 Benefits paid directly by employer
 ( 27)
 ( 37)

 Benefit obligation at end of year
 $
 $

 Funded status at end of year
 $
 ( 120)
 $
 ( 150)

 Amounts recognized in consolidated balance sheets

 Accrued compensation, benefits and retirement costs
 $
 ( 16)
 $
 ( 19)

 ( 104)
 ( 131)

 Net amount recognized
 $
 ( 120)
 $
 ( 150)

 Amounts recognized in accumulated other comprehensive loss

 Net actuarial gain
 $
 ( 60)
 $
 ( 44)

 Prior service credit
 ( 3)
 ( 3)

 Net amount recognized
 $
 ( 63)
 $
 ( 47)

 In addition to the OPEB plans in the above table, we also maintain less significant OPEB plans in five other countries outside the U.S. that comprise approximately 17 percent and 16 percent of our OPEB obligations at December 31, 2024 and 2023, respectively. These plans are reflected in other liabilities in our Consolidated Balance Sheets.
 Components of Net Periodic OPEB Cost
 The following table presents the net periodic OPEB cost under our plans:

 2024
 2023
 2022

 Interest cost
 $
 $
 $

 Recognized net actuarial gain
 ( 3)
 ( 2)
 —

 Net periodic OPEB cost
 $
 $
 $

 Other changes in benefit obligations recognized in other comprehensive loss (income) for the years ended December 31 were as follows:

 2024
 2023
 2022

 Recognized net actuarial gain
 $
 $
 $
 —

 Incurred actuarial gain
 ( 19)
 ( 2)
 ( 25)

 Total recognized in other comprehensive (income) loss
 $
 ( 16)
 $
 —
 $
 ( 25)

 Total recognized in net periodic OPEB cost and other comprehensive (income) loss
 $
 ( 12)
 $
 $
 ( 20)

 Assumptions
 The table below presents assumptions used in determining the OPEB obligation for each year and reflects weighted-average percentages for our other OPEB plans as follows:

 2024
 2023

 Discount rate
 5.60
 %
 5.19
 %

 The table below presents assumptions used in determining the net periodic OPEB cost and reflects weighted-average percentages for the various plans as follows:

 2024
 2023
 2022

 Discount rate
 5.19
 %
 5.59
 %
 2.93
 %

 Our consolidated OPEB obligation is determined by application of the terms of health care and life insurance plans, together with relevant actuarial assumptions and health care cost trend rates. For measurement purposes, a 6.75 percent annual rate of increase in the per capita cost of covered health care benefits was assumed in 2024. The rate is assumed to decrease on a linear basis to 5.0 percent through 2032 and remain at that level thereafter.
 Estimated Benefit Payments
 The table below presents expected benefit payments under our OPEB plans:

 2025
 2026
 2027
 2028
 2029
 2030 - 2034

 Expected benefit payments
 $
 $
 $
 $
 $
 $

 NOTE 11. SUPPLEMENTAL BALANCE SHEET DATA
 Other assets included the following:

 2024
 2023

 Deferred income taxes
 $
 1,119
 $
 1,082

 Operating lease assets

 Corporate-owned life insurance

 Other

 Other assets
 $
 2,633
 $
 2,543

 Other accrued expenses included the following:

 2024
 2023

 Marketing accruals
 $
 $

 Other taxes payable

 Income taxes payable

 Current portion of operating lease liabilities

 Settlement Agreements (1)

 1,938

 Other

 Other accrued expenses
 $
 1,898
 $
 3,754

 (1) See NOTE 14, "COMMITMENTS AND CONTINGENCIES," for additional information.

 Other liabilities included the following:

 2024
 2023

 Accrued product warranty (1)

 $
 $

 Pensions

 Operating lease liabilities

 Deferred income taxes

 Accrued compensation

 Other postretirement benefits

 Mark-to-market valuation on interest rate derivatives

 Long-term income taxes

 Other

 $
 3,149
 $
 3,430

 (1) See NOTE 13, "PRODUCT WARRANTY LIABILITY," for additional information.

 NOTE 12. DEBT
 Loans Payable
 Loans payable at December 31, 2024 and 2023 were $ 356 million and $ 280 million, respectively, and consisted primarily of loans payable to financial institutions. The weighted-average interest rate of loans payable at December 31 was as follows:

 2024
 2023

 Weighted-average interest rate
 2.85
 %
 3.92
 %

 Commercial Paper
 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 debt through third-party brokers. We intend to use the net proceeds from the commercial paper borrowings for general corporate purposes. We had $ 1.3 billion and $ 1.5 billion in outstanding borrowings under our commercial paper programs at December 31, 2024 and 2023, respectively. The weighted-average interest rate for commercial paper at December 31 was as follows:

 2024
 2023

 Weighted-average interest rate
 4.49
 %
 5.43
 %

 Revolving Credit Facilities
 On June 3, 2024, we entered into an amended and restated 5 -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 5 -year credit agreement that would have matured on August 18, 2026. We also 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 from our $ 2.0 billion 364 -day credit facility that expires on June 2, 2025 and our $ 2.0 billion 5 -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. Amounts payable under our revolving credit facility rank pro rata with all of our unsecured, unsubordinated indebtedness. Up to $ 300 million under this credit facility is available for swingline loans. Based on our current long-term debt ratings, the applicable margin on Secured Overnight Financing Rate ( SOFR) rate loans for the 364 -day facility was 0.85 percent per annum and 0.975 percent for the 5 -year facility. Advances under the facility may be prepaid without premium or penalty, subject to customary breakage costs. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. Our credit agreements include various covenants, including, among others, maintaining a net debt to total capital ratio of no more than 0.65 to 1.0. At December 31, 2024, we were in compliance with the financial debt covenants. There were no outstanding borrowings under these facilities at December 31, 2024 and December 31, 2023.

 The total combined borrowing capacity under the revolving credit facilities and commercial programs should not exceed $ 4.0 billion. At December 31, 2024, our $ 1.3 billion of commercial paper outstanding effectively reduced the $ 4.0 billion available capacity under our revolving credit facilities to $ 2.7 billion.
 At December 31, 2024, we also had an additional $ 628 million available for borrowings under our uncommitted international and other domestic credit facilities.
 Long-term Debt
 A summary of long-term debt was as follows:

 Interest Rate
 2024
 2023

 Long-term debt

 Hydrogenics promissory notes, due 2024 and 2025
 — %

 Term loan, due 2025 (1)(2)

 Variable
 —
 1,150

 Senior notes, due 2025 (3)

 0.75 %

 Atmus term loan, due 2027 (4)

 Variable
 —

 Debentures, due 2027
 6.75 %

 Debentures, due 2028
 7.125 %

 Senior notes, due 2029
 4.90 %
 —

 Senior notes, due 2030 (3)

 1.50 %

 Senior notes, due 2034
 5.15 %
 —

 Senior notes, due 2043
 4.875 %

 Senior notes, due 2050
 2.60 %

 Senior notes, due 2054
 5.45 %
 1,000
 —

 Debentures, due 2098 (5)

 5.65 %

 Other debt

 Unamortized discount and deferred issuance costs
 ( 89)
 ( 72)

 Fair value adjustments due to hedge on indebtedness
 ( 85)
 ( 96)

 Finance leases

 Total long-term debt
 5,444
 4,920

 Less: Current maturities of long-term debt (6)

 Long-term debt
 $
 4,784
 $
 4,802

 (1) During 2024, we repaid the outstanding balance of the term loan.

 (2) In September 2023, we entered into a series of interest rate swaps in order to trade a portion of the floating rate into fixed rate. See "Interest Rate Risk" in NOTE 20, "DERIVATIVES," for additional information.

 (3) In 2021, we entered into a series of interest rate swaps to effectively convert from a fixed rate to floating rate. See "Interest Rate Risk" in NOTE 20, "DERIVATIVES," for additional information.

 (4) See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 (5) The effective interest rate is 7.48 percent.

 (6) The weighted-average interest rates for the years ended December 31, 2024 and 2023, were 1.01 percent and 1.87 percent, respectively.

 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:

 2025
 2026
 2027
 2028
 2029

 Principal payments
 $
 $
 $
 $
 $

 The $ 250 million 7.125 percent debentures and $ 165 million 5.65 percent debentures are unsecured and are not subject to any sinking fund requirements. We can redeem these debentures at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture holders are not penalized by the early redemption.
 Our debt agreements contain several restrictive covenants. The most restrictive of these covenants applies to our revolving credit facility which will upon default, among other things, limit our ability to incur additional debt or issue preferred stock, enter into sale-leaseback transactions, sell or create liens on our assets, make investments and merge or consolidate with any other entity. At December 31, 2024, we were in compliance with all of the financial debt covenants under our borrowing agreements.
 Shelf Registration
 As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the Securities and Exchange Commission (SEC) on February 8, 2022, which expired on February 9, 2025. Under this shelf registration we were able to offer debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units. We plan to file a new shelf registration statement shortly after the filing of this annual report on Form 10-K to replace the expired automatic shelf registration statement.
 Interest Expense
 For the years ended December 31, 2024, 2023 and 2022, total interest incurred was $ 387 million, $ 383 million and $ 204 million, respectively, and interest capitalized was $ 17 million, $ 8 million and $ 5 million, respectively.
 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:

 2024
 2023

 Fair values of total debt (1)

 $
 6,651
 $
 6,375

 Carrying value of total debt
 7,059
 6,696

 (1) The fair value of debt is derived from Level 2 input measures.

 NOTE 13. 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:

 2024
 2023
 2022

 Balance at beginning of year
 $
 2,497
 $
 2,477
 $
 2,425

 Provision for base warranties issued

 Deferred revenue on extended warranty contracts sold

 Provision for product campaigns issued

 Payments made during period
 ( 704)
 ( 705)
 ( 596)

 Amortization of deferred revenue on extended warranty contracts
 ( 297)
 ( 300)
 ( 298)

 Changes in estimates for pre-existing product warranties and campaigns
 ( 128)

 Acquisitions (1)

 —
 —

 Foreign currency translation adjustments and other
 ( 21)
 ( 16)

 Balance at end of period
 $
 2,623
 $
 2,497
 $
 2,477

 (1) See NOTE 23, "ACQUISITIONS," for additional information.

 We recognized supplier recoveries of $ 54 million, $ 36 million and $ 39 million for the years ended December 31, 2024, 2023 and 2022, respectively.
 Warranty related deferred revenues and warranty liabilities on our Consolidated Balance Sheets were as follows:

 2024
 2023
 Balance Sheet Location

 Deferred revenue related to extended coverage programs

 Current portion
 $
 $
 Current portion of deferred revenue

 Long-term portion
 Deferred revenue

 Total
 $
 1,101
 $
 1,053

 Product warranty

 Current portion
 $
 $
 Current portion of accrued product warranty

 Long-term portion

 Total
 $
 1,522
 $
 1,444

 Total warranty accrual
 $
 2,623
 $
 2,497

 NOTE 14. 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 is probable and can be reasonably estimated based upon 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 the agreement in principle with EPA, CARB, the Environmental and Natural Resources Division of the DOJ 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 will subject us to further stipulated penalties. We recorded a charge of $ 2.0 billion in the fourth quarter of 2023, in other operating expense, net in our Consolidated Statements of Income, to resolve the matters addressed by the Settlement Agreements involving approximately one million of our pick-up truck applications in the U.S. Of the $ 2.0 billion charge, $ 1.7 billion (primarily related to penalties) was non-deductible for U.S. federal income tax purposes. The remaining amount, related to emissions mitigation projects and payments, extended warranties and other related compliance expenses was deductible for U.S. federal income tax purposes. 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. Subsequent to the second quarter of 2024, we have recorded 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 December 31, 2024, the maximum potential loss related to these guarantees was $ 41 million.
 We have arrangements with certain suppliers that require us to purchase minimum volumes or be subject to monetary penalties. At December 31, 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 December 31, 2024, the total commitments under these contracts were $ 69 million. These arrangements enable us to guarantee the prices of these commodities, which otherwise are subject to market volatility.
 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 $ 241 million at December 31, 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.

 NOTE 15. CUMMINS INC. SHAREHOLDERS' EQUITY
 Preferred and Preference Stock
 We are authorized to issue one million shares of zero par value preferred and one million shares of preference stock with preferred shares being senior to preference shares. We can determine the number of shares of each series, and the rights, preferences and limitations of each series. At December 31, 2024 and 2023, there was no preferred or preference stock outstanding.
 Common Stock
 Changes in shares of common stock and treasury stock were as follows:

 Common
Stock
 Treasury
Stock

 Balance at December 31, 2021
 222.5
 80.0

 Shares acquired
 —
 1.9

 Shares issued
 —
 ( 0.7)

 222.5
 81.2

 Shares issued
 —
 ( 0.5)

 222.5
 80.7

 Shares issued
 —
 ( 1.2)

 Atmus divestiture share exchange (1)

 —
 5.6

 222.5
 85.1

 (1) 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. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 Treasury Stock
 Shares of common stock repurchased by us are recorded at cost as treasury stock and result in a reduction of shareholders' equity in our Consolidated Balance Sheets. Treasury shares may be reissued as part of our stock-based compensation programs. When shares are reissued, we use the weighted-average cost method for determining cost. The gains between the cost of the shares and the issuance price are added to additional paid-in-capital. The losses are deducted from additional paid-in capital to the extent of the gains. Thereafter, the losses are deducted from retained earnings. Treasury stock activity for the three-year period ended December 31, 2024, consisting of shares issued and repurchased is presented in our Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Equity.
 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. The dollar value remaining available for future purchases under the 2019 program at December 31, 2024, was $ 218 million.
 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. See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
 We did not make any repurchases of common stock during 2024 or 2023. We repurchased $ 374 million of our common stock in the year ended December 31, 2022.
 Dividends
 Total dividends paid to common shareholders in 2024, 2023 and 2022 were $ 969 million, $ 921 million and $ 855 million, respectively. Declaration and payment of dividends in the future depends upon our income and liquidity position, among other factors, and is subject to declaration by the Board, who meets quarterly to consider our dividend payment. We expect to fund dividend payments with cash from operations.
 In July 2024, the Board authorized an increase to our quarterly dividend of 8.3 percent from $ 1.68 per share to $ 1.82 per share. In July 2023, the Board authorized a 7.0 percent increase to our quarterly cash dividend on our common stock from $ 1.57 per share to $ 1.68 per share. In July 2022, the Board approved an 8.3 percent increase to our quarterly dividend on our common stock from $ 1.45 per share to $ 1.57 per share. Cash dividends per share paid to common shareholders for the last three years were as follows:

 Quarterly Dividends

 2024
 2023
 2022

 First quarter
 $
 1.68
 $
 1.57
 $
 1.45

 Second quarter
 1.68
 1.57
 1.45

 Third quarter
 1.82
 1.68
 1.57

 Fourth quarter
 1.82
 1.68
 1.57

 Total
 $
 7.00
 $
 6.50
 $
 6.04

 NOTE 16. ACCUMULATED OTHER COMPREHENSIVE LOSS
 Following are the changes in accumulated other comprehensive (loss) income by component:

 Change in pensions
and other
postretirement
defined benefit plans
 Foreign
currency
translation
adjustment
 Unrealized gain
(loss) on
derivatives
 Total
attributable to
Cummins Inc.
 Noncontrolling
interests
 Total

 Balance at December 31, 2021
 $
 ( 346)
 $
 ( 1,208)
 $
 ( 17)
 $
 ( 1,571)

 Other comprehensive income (loss) before reclassifications

 Before-tax amount
 ( 123)
 ( 350)
 ( 337)
 $
 ( 40)
 $
 ( 377)

 Tax benefit (expense)
 ( 32)
 ( 7)
 —
 ( 7)

 After-tax amount
 ( 104)
 ( 344)
 ( 344)
 ( 40)
 ( 384)

 Amounts reclassified from accumulated other comprehensive income (1)

 —
 —

 Net current period other comprehensive (loss) income
 ( 81)
 ( 344)
 $
 ( 40)
 $
 ( 359)

 $
 ( 427)
 $
 ( 1,552)
 $
 $
 ( 1,890)

 Other comprehensive income (loss) before reclassifications

 Before-tax amount
 ( 541)
 ( 410)
 $
 ( 3)
 $
 ( 413)

 Tax benefit (expense)
 ( 1)
 ( 7)
 —

 After-tax amount
 ( 428)
 ( 305)
 ( 3)
 ( 308)

 Amounts reclassified from accumulated other comprehensive income (1)

 —
 ( 18)
 ( 11)
 —
 ( 11)

 Net current period other comprehensive (loss) income
 ( 421)
 ( 316)
 $
 ( 3)
 $

 $
 ( 848)
 $
 ( 1,457)
 $
 $
 ( 2,206)

 Other comprehensive income (loss) before reclassifications

 Before-tax amount
 ( 14)
 ( 313)
 ( 280)
 $
 ( 16)
 $
 ( 296)

 Tax expense
 ( 2)
 ( 8)
 ( 12)
 ( 22)
 —
 ( 22)

 After-tax amount
 ( 16)
 ( 321)
 ( 302)
 ( 16)
 ( 318)

 Amounts reclassified from accumulated other comprehensive income (1)

 (2)

 ( 19)
 —

 Net current period other comprehensive income (loss)
 ( 260)
 ( 239)
 $
 ( 16)
 $
 ( 255)

 $
 ( 843)
 $
 ( 1,717)
 $
 $
 ( 2,445)

 (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) See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 NOTE 17. NONCONTROLLING INTERESTS
 Noncontrolling interests in the equity of consolidated subsidiaries were as follows:

 2024
 2023

 Eaton Cummins Automated Transmission Technologies
 $
 $

 Cummins India Ltd.

 Other

 Noncontrolling interests
 $
 1,037
 $
 1,054

 NOTE 18. STOCK INCENTIVE AND STOCK OPTION PLANS
 Our stock incentive plan (the Plan) allows for granting of up to 8.5 million total shares of equity awards to executives, employees and non-employee directors. Awards available for grant under the Plan include, but are not limited to, stock options, stock appreciation rights, performance shares and other stock awards. Shares issued under the Plan may be newly issued shares or reissued treasury shares.
 Stock options are generally granted with a strike price equal to the fair market value of the stock on the date of grant and a life of 10 years. Stock options granted have a three -year vesting period. The strike price may be higher than the fair value of the stock on the date of the grant, but cannot be lower. Compensation expense is recorded on a straight-line basis over the vesting period beginning on the grant date. The compensation expense is based on the fair value of each option grant using the Black-Scholes option pricing model. Options granted to employees eligible for retirement under our retirement plan are fully expensed at the grant date.
 Stock options are also awarded through the Key Employee Stock Investment Plan (KESIP) which allows certain employees, other than officers, to purchase shares of common stock on an installment basis up to an established credit limit. For every block of 100 KESIP shares purchased by the employee 50 stock options are granted. The options granted through the KESIP program are considered awards under the Plan and are vested immediately. Compensation expense for stock options granted through the KESIP program is recorded based on the fair value of each option grant using the Black-Scholes option pricing model.
 Performance shares are granted as target awards and are earned based on certain measures of our operating performance. A payout factor has been established ranging from 0 to 200 percent of the target award based on our actual performance during the three -year performance period. The fair value of the award is equal to the average market price, adjusted for the present value of dividends over the vesting period, of our stock on the grant date. Compensation expense is recorded ratably over the period beginning on the grant date until the shares become unrestricted and is based on the amount of the award that is expected to be earned under the plan formula, adjusted each reporting period based on current information.
 Restricted stock and restricted stock units are awarded from time to time at no cost to certain employees. Restrictions limit the sale or transfer of the shares during a defined period. Most awards are not entitled to cash dividends and voting rights until vesting. Generally, the shares vest and become free from restrictions ratably over a three -year service period, provided the participant remains an employee. The fair value of the awards typically equals the average market price of our stock on the grant date adjusted for the present value of dividends over the vesting period. Compensation expense is determined at the grant date and is recognized over the restriction period on a straight-line basis.
 Employee compensation expense (net of estimated forfeitures) related to our share-based plans for the years ended December 31, 2024, 2023 and 2022, was approximately $ 100 million, $ 79 million and $ 33 million, respectively. The excess tax benefit associated with our employee share-based plans for the years ended December 31, 2024, 2023 and 2022, was $ 23 million, $ 7 million and $ 8 million, respectively. The total unrecognized compensation expense (net of estimated forfeitures) related to nonvested awards for our employee share-based plans was approximately $ 120 million at December 31, 2024, and is expected to be recognized over a weighted-average period of approximately two years.

 The table below summarizes the employee share-based activity in the Plan:

 Options
Exercise Price
Remaining
Contractual Life
(in years)
 Aggregate
Intrinsic Value
(in millions)

 Balance at December 31, 2021
 2,743,098
 $
 143.51

 18,900
 207.79

 Exercised
 ( 586,990)
 137.83

 ( 29,045)
 148.08

 2,145,963
 145.57

 17,500
 225.39

 Exercised
 ( 345,250)
 142.69

 ( 3,793)
 144.16

 1,814,420
 146.89

 9,100
 294.05

 Exercised
 ( 1,004,358)
 142.18

 ( 4,821)
 149.48

 814,341
 $
 154.33
 4.0
 $

 Exercisable, December 31, 2022
 1,655,298
 $
 146.37
 4.6
 $

 Exercisable, December 31, 2023
 1,814,420
 $
 146.89
 4.2
 $

 Exercisable, December 31, 2024
 814,341
 $
 154.33
 4.0
 $

 The weighted-average grant date fair value of options granted during the years ended December 31, 2024, 2023 and 2022, was $ 77.19, $ 57.01 and $ 45.74, respectively. The total intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022, was approximately $ 160 million, $ 35 million and $ 53 million, respectively. Cash received from option exercises under share-based payment arrangements for the years ended December 31, 2024, 2023 and 2022, was $ 133 million, $ 48 million and $ 80 million, respectively.
 The share-based activity and weighted-average grant date fair value of performance and restricted shares was as follows:

 Performance Shares
 Restricted Shares

 Nonvested
 Shares
Fair Value
 Shares
Fair Value

 Balance at December 31, 2021
 440,149
 $
 183.72
 29,928
 $
 252.99

 230,535
 184.92
 215,260
 209.08

 Vested
 ( 122,188)
 148.99
 ( 5,513)
 249.79

 ( 63,197)
 182.68
 ( 3,262)
 211.37

 485,299
 193.17
 236,413
 213.66

 170,205
 222.86
 176,128
 223.92

 Vested
 ( 99,425)
 126.38
 ( 74,270)
 215.38

 ( 68,566)
 199.69
 ( 27,931)
 217.01

 487,513
 216.24
 310,340
 218.77

 259,004
 264.95
 208,029
 276.83

 Vested
 ( 233,136)
 244.14
 ( 75,759)
 215.98

 ( 40,909)
 233.84
 ( 37,493)
 232.01

 472,472
 $
 227.65
 405,117
 $
 247.88

 The total vesting date fair value of performance shares vested during the years ended December 31, 2024, 2023 and 2022, was $ 63 million, $ 25 million and $ 24 million, respectively. The total fair value of restricted shares vested was $ 24 million, $ 17 million and $ 1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

 The fair value of each option grant was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:

 2024
 2023
 2022

 Expected life (years)

 Risk-free interest rate
 4.20
 %
 3.91
 %
 2.32
 %

 Expected volatility
 29.15
 %
 28.73
 %
 28.40
 %

 Dividend yield
 2.79
 %
 2.81
 %
 2.85
 %

 Expected life—The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding based upon our historical data.
 Risk-free interest rate—The risk-free interest rate assumption is based upon the observed U.S. treasury security rate appropriate for the expected life of our employee stock options.
 Expected volatility—The expected volatility assumption is based upon the weighted-average historical daily price changes of our common stock over the most recent period equal to the expected option life of the grant, adjusted for activity which is not expected to occur in the future.
 Dividend yield—The dividend yield assumption is based on our history and expectation of dividend payouts.

 NOTE 19. EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
 We calculate basic earnings per share (EPS) of common stock by dividing net income attributable to Cummins Inc. by the weighted-average number of common shares outstanding for the period. The calculation of diluted EPS assumes the issuance of common stock for all potentially dilutive share equivalents outstanding, which is calculated using the treasury-stock method for share-based awards. Following are the computations for basic and diluted earnings per share:

 In millions, except per share amounts
 2024
 2023
 2022

 Net income attributable to Cummins Inc.
 $
 3,946
 $
 $
 2,151

 Weighted-average common shares outstanding

 Basic
 138.2
 141.7
 141.5

 Dilutive effect of stock compensation awards
 0.9
 1.0
 0.8

 Diluted
 139.1
 142.7
 142.3

 Earnings per common share attributable to Cummins Inc.

 Basic
 $
 28.55
 $
 5.19
 $
 15.20

 Diluted
 28.37
 5.15
 15.12

 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:

 2024
 2023
 2022

 Options excluded
 1,467
 10,587
 20,595

 NOTE 20. 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 $ 3.6 billion at December 31, 2024, with the following currencies comprising 86 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 December 31, 2024, was $ 1.5 billion.
 The following table summarizes the net investment hedge activity in AOCL:

 2024
 2023

 Type of Derivative
 Gain (Loss) Reclassified from AOCL into Earnings
 Gain (Loss) Reclassified from AOCL into Earnings

 Foreign exchange forwards
 $
 $
 —
 $
 ( 30)
 $
 —

 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 were initially recorded in other comprehensive income and reclassified into earnings as interest expense in the Consolidated Financial Statements as each interest payment was accrued. In 2024, we settled all $ 500 million of these interest rate swaps. The losses recognized on settlements were immaterial. The interest rate swap activity in AOCL was immaterial for these swaps for the years ended December 31, 2024 and 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 SOFR under a fallback protocol in our derivative agreements). 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 Consolidated Financial Statements as interest expense. In March 2023, we settled a portion of our 2021 interest rate swaps with a notional amount of $ 100 million. The $ 7 million loss on settlement is being amortized over the remaining term of the related debt. In November 2024, we settled a portion of our interest rate swaps related to our 2025 and 2030 bonds with a combined notional amount of $ 135 million. The $ 12 million loss on settlement is being amortized over the remaining term of the related debt. The interest rate swaps on our 2025 and 2030 debt had $ 350 million and $ 680 million, respectively, of notional amounts outstanding at December 31, 2024.

 The following table summarizes the gains and losses:

 2024
 2023
 2022

 Type of Swap
Swaps
Borrowings
Swaps
Borrowings
Swaps
Borrowings

 Interest rate swaps (1)

 $
 $
 ( 11)
 $
 $
 ( 32)
 $
 ( 148)
 $

 (1) The difference between the gain (loss) on swaps and borrowings represented hedge ineffectiveness.

 In 2019, we entered into $ 350 million of interest rate lock agreements, and in 2020 we entered into an additional $ 150 million of lock agreements to reduce the variability of the cash flows of the interest payments on a total of $ 500 million of fixed rate debt originally forecast to be issued in 2023 to replace our senior notes at maturity. The terms of the rate locks mirrored the time period of the expected fixed rate debt issuance and the expected timing of interest payments on that debt. The gains and losses on these derivative instruments were initially recorded in other comprehensive income and will be released to earnings in interest expense in future periods to reflect the difference in (1) the fixed rates economically locked in at the inception of the hedge and (2) the actual fixed rates established in the debt instrument at issuance. In 2022, we settled certain rate lock agreements with notional amounts totaling $ 150 million for $ 49 million in cash. In 2023, we settled all remaining rate lock agreements with notional amounts totaling $ 350 million for $ 101 million. The majority of the $ 150 million of gains on settlements remained in other comprehensive income and is being amortized over the remaining term of the related debt issued in early 2024. The following table summarizes the interest rate lock activity in AOCL:

 Year ended December 31,

 2024
 2023
 2022

 Type of Swap
 Gain (Loss) Reclassified from AOCL into Interest Expense
 Gain (Loss) Reclassified from AOCL into Interest Expense
 Gain (Loss) Reclassified from AOCL into Interest Expense

 Interest rate locks
 $
 ( 4)
 $
 $
 $
 $
 $
 —

 Derivatives Not Designated as Hedging Instruments
 The following table summarizes the effect on our Consolidated Statements of Net Income for derivative instruments not designated as hedging instruments:

 2024
 2023
 2022

 Gain (loss) recognized in income - Cost of sales (1)

 $
 $
 ( 3)
 $

 Loss recognized in income - Other expense, net (1)

 ( 65)
 ( 21)
 ( 5)

 (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 Consolidated Balance Sheets:

 Derivatives Designated as Hedging Instruments
 Derivatives Not Designated as Hedging Instruments

 2024
 2023
 2024
 2023

 Notional amount
 $
 3,512
 $
 2,997
 $
 2,713
 $
 3,610

 Derivative assets

 Prepaid expenses and other current assets
 $
 $
 $
 $

 Other assets
 —
 —
 —

 Total derivative assets (1)

 $
 $
 $
 $

 Derivative liabilities

 Other accrued expenses
 $
 $
 $
 $

 —
 —

 Total derivative liabilities (1)

 $
 $
 $
 $

 (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 2024 or 2023.

 We elected to present our derivative contracts on a gross basis in our Consolidated Balance Sheets. Had we chosen to present on a net basis, we would have derivatives in a net asset position of $ 37 million and $ 4 million and derivatives in a net liability position of $ 131 million and $ 148 million at December 31, 2024, and 2023, respectively.

 NOTE 21. 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 our Consolidated Statements of Net Income for the year ended December 31, 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 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 2 years after the divestiture date. 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 22. ACCELERA STRATEGIC REORGANIZATION ACTIONS
 In the fourth quarter of 2024, our Accelera segment underwent a strategic review to better streamline operations as well as pace and re-focus investments on the most promising paths as the adoption of certain zero emission solutions slows. This review resulted in decisions to consolidate certain manufacturing efforts, focus internal development efforts towards areas of differentiation while continuing to leverage partners and reduce our investments in certain technologies, joint ventures and markets. In addition, declining customer demand in certain key product lines caused us to re-evaluate the recoverability of certain inventory items. As a result of these actions, we recorded several non-cash charges in the fourth quarter related to inventory write-downs, intangible and fixed asset impairments and joint venture impairments. We also recorded severance of approximately $ 7 million. The following table presents the impact of asset write-downs and impairments on our Consolidated Statements of Net Income:

 Year ended

2024
 Statement of Net Income Location

 Inventory write-downs
 $
 Cost of sales

 Impairment of other intangible assets

 Impairment of property, plant and equipment

 Impairment of investments in equity method investees

 Severance
 Cost of sales and research, development and engineering expenses

 Other
 Other operating expense, net and selling, general and administrative expenses

 Total
 $

 The majority of the $ 305 million non-cash charge is reflected in net cash provided by operating activities, as a change in inventory of $ 107 million and other, net of $ 171 million. Of the total charges, approximately $ 243 million occurred in jurisdictions where we receive no tax benefits because of valuation allowances, resulting in a $ 50 million unfavorable discrete tax item. In addition, these actions were considered a triggering event under GAAP which required us to perform an interim impairment test of our fuel cell and electrolyzer reporting unit. The results of this testing indicated that goodwill of this reporting unit was not impaired.

 NOTE 23. ACQUISITIONS
 Acquisitions for the for the years ended December 31, 2024, 2023 and 2022, were as follows:

 Entity Acquired (Dollars in millions)
 Date of Acquisition
 Additional Percent Interest Acquired
 Payments to Former Owners
 Acquisition Related Debt Retirements
 Total Purchase Consideration
 Type of Acquisition(1)

 Goodwill Acquired
 Intangibles Recognized(2)

 2024

 Engendren Corporation
 02/16/24
 %
 $
 $
 —
 $
 COMB
 $
 $

 2023

 Cummins France SA
 10/31/23
 %
 $
 $
 $
 COMB
 $
 $
 —

 Faurecia
 10/02/23
 %
 —
 (3)

 COMB
 —

 Hydrogenics Corporation
 06/29/23
 %
 (4)

 EQUITY
 —
 —

 Teksid Hierro de Mexico, S.A. de C.V.
 04/03/23
 %
 $
 —
 (5)

 COMB
 $
 —

 2022

 Siemens Commercial Vehicles Propulsion
 11/30/22
 %
 $
 $
 —
 $
 COMB
 $
 $

 Meritor, Inc.
 08/03/22
 %
 2,613
 2,861
 COMB
 1,610

 Jacobs Vehicle Systems
 04/08/22
 %
 —
 COMB

 Cummins Westport, Inc.
 02/07/22
 %
 —
 COMB
 —

 (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, technology and trade name related.

 (3) Total purchase consideration included $ 30 million for the settlement of accounts payable that were treated as an operating cash outflow.

 (4) Hydrogenics entered into three non-interest-bearing promissory notes with $ 175 million paid on July 31, 2023, $ 50 million paid on December 31, 2024 and the remaining $ 110 million due in two installments in 2025.

 (5) Total purchase consideration included $ 32 million for the settlement of accounts payable that was treated as an operating cash outflow.

 Faurecia
 On October 2, 2023, we purchased, from the Forvia Group, all of the equity ownership of Faurecia's U.S. and Europe commercial vehicle exhaust business for $ 208 million, subject to certain working capital and other customary adjustments, and does not contain any contingent consideration. The acquisition provides canning and assembly operations for full exhaust systems primarily for on-highway applications, ensures the long-term supply of aftertreatment components, minimizes opportunities for supply disruptions, adds significant technical and manufacturing resources and enhances our existing portfolio. In the third quarter of 2024, we finalized the purchase accounting and made certain other adjustments. The primary adjustments were to reduce property, plant and equipment by $ 3 million, offset by the finalization of purchase price, with a net increase to goodwill of $ 2 million.
 The final purchase price allocation has been updated as follows:

 Cash and cash equivalents
 $

 Accounts and notes receivable, net (1)

 Property, plant and equipment

 Goodwill

 Other current and long-term assets

 ( 66)

 Other current and long-term liabilities
 ( 50)

 Total purchase price
 $

 (1) Included $ 30 million of Cummins receivables that were eliminated against payables at other Cummins entities.

 Goodwill was determined based on the residual difference between the fair value of consideration transferred and the value assigned to tangible assets and liabilities. All of the goodwill is expected to be deductible for tax purposes. Among the factors contributing to a purchase price resulting in the recognition of goodwill are an acquired workforce and other economic benefits that are anticipated to arise from operational synergies from combining the business with Cummins.
 The results of this business were reported in our Components segment within the emission solutions business. Since we are the primary customer of this business, the acquisition is not expected to result in material incremental sales to our business. Pro forma financial information for the acquisition was not presented as the effects were not material to our Consolidated Financial Statements.
 Hydrogenics Corporation - Redeemable Noncontrolling Interest
 On June 29, 2023, a share purchase agreement was executed with a 19 percent minority shareholder in one of our businesses, Hydrogenics Corporation (Hydrogenics), whereby we agreed to pay the minority shareholder $ 335 million for their 19 percent ownership, including the settlement of shareholder loans of $ 48 million. As part of the share purchase agreement, Hydrogenics entered into three non-interest-bearing promissory notes with $ 175 million paid in 2023, $ 50 million paid in 2024 and the remaining $ 110 million due in two installments in 2025. We recorded the non-interest-bearing promissory notes at their present value in our Consolidated Financial Statements.
 Prior to the execution of this transaction, the minority shareholder had, among other rights and subject to related obligations and restrictive covenants, rights that were exercisable between September 2022 and September 2026 to require us to (1) purchase such shareholder's shares (put option) at an amount up to the fair market value (calculated pursuant to a process outlined in the shareholders' agreement) and (2) sell to such shareholder Hydrogenics' electrolyzer business at an amount up to the fair market value of the electrolyzer business (calculated pursuant to a process outlined in the shareholders' agreement). The estimated fair value of the put option was recorded as redeemable noncontrolling interests in our Consolidated Financial Statements with an offset to additional paid-in capital, and at December 31, 2022, the balance was $ 258 million. The redeemable noncontrolling interest balance was reduced to zero as of the acquisition date.
 Meritor, Inc.
 On August 3, 2022, we completed the acquisition of Meritor whereby we paid $ 36.50 per share for each outstanding share of Meritor, a global leader of drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets. The total purchase price was $ 2.9 billion, including debt that was retired on the closing date of $ 248 million. In addition, we assumed $ 1.0 billion of additional debt, of which $ 0.9 billion was retired prior to the end of the third quarter of 2022. The acquisition was funded with a combination of $ 2.0 billion in new debt (see NOTE 12, "DEBT" for additional details), cash on hand and additional commercial paper borrowings. The integration of Meritor's people, technology and capabilities position us as one of the few companies able to provide integrated powertrain solutions across combustion and electric power applications at a time when demand for decarbonized solutions is continuing to accelerate. The majority of this business was included within our Components segment with the exception of the electric powertrain business, which was included in our Accelera segment.

 The final purchase price allocation was as follows:

 Cash and cash equivalents
 $

 Accounts and notes receivable, net

 Property, plant and equipment

 Intangible assets
 1,610

 Investments and advances related to equity method investees

 Goodwill

 Pension assets

 Other current and long-term assets

 ( 711)

 Net deferred taxes
 ( 277)

 Other liabilities (pensions and other postretirement benefits)
 ( 129)

 Long-term debt
 ( 962)

 Other current and long-term liabilities
 ( 665)

 Noncontrolling interests
 ( 111)

 Total purchase price
 $
 2,861

 The estimated fair values (all considered Level 3 measurements) of the identifiable intangible assets acquired, their weighted-average useful lives, the related valuation methodology and key assumptions are as follows:

 Fair Value (in millions)
 Weighted-Average Useful Life (in years)
 Valuation Methodology
 Key Assumptions

 Customer relationships
 $
 Multi-period excess earnings
 Revenue, EBITDA(1), discount rate, customer renewal rates, customer attrition rates

 Technology
 Relief-from-royalty
 Royalty rate, discount rate, obsolescence factor

 Trade name
 Relief-from-royalty
 Royalty rate, discount rate

 (1) Earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests.

 Annual amortization of the intangible assets for the next five years is expected to approximate $ 142 million per year.
 Goodwill was determined based on the residual difference between the fair value of consideration transferred and the value assigned to tangible and intangible assets and liabilities. Goodwill was allocated to the Components segment ($ 759 million) and the Accelera segment ($ 167 million) based on the relative value of those businesses compared to the assets and liabilities assigned to them. We do not expect any of the goodwill to be deductible for tax purposes. Among the factors contributing to a purchase price resulting in the recognition of goodwill are Meritor's expected future customers, new versions of technologies, an acquired workforce, other economic benefits that are anticipated to arise from future product sales and operational synergies from combining the business with Cummins.
 Included in our results for the year ended December 31, 2022, were revenues of $ 1.9 billion and net loss of $ 43 million related to this business. In addition, in 2022 we incurred acquisition related costs of $ 30 million included in selling, general and administrative expenses in our Consolidated Statements of Net Income.

 The following table presents the supplemental consolidated results of the company for the year ended December 2022, on an unaudited pro-forma basis, as if the acquisition had been consummated on January 1, 2021. The primary adjustments reflected in the pro-forma results related to (1) increase in interest expense for debt used to fund the acquisition, (2) removal of acquisition related costs from 2022 and (3) changes related to purchase accounting primarily related to amortization of intangibles, fixed assets and joint ventures. The unaudited pro forma financial information presented below does not purport to represent the actual results of operations that Cummins and Meritor would have achieved had the companies been combined during the period presented and was not intended to project the future results of operations that the combined company could achieve after the acquisition. The unaudited pro forma financial information does not reflect any potential cost savings, operating efficiencies, long-term debt pay down estimates, financial synergies or other strategic benefits as a result of the acquisition or any restructuring costs to achieve those benefits.

 (Unaudited)
 Year ended December 31,

 2022

 Net sales
 $
 30,841

 2,196

 The Meritor acquisition increased net assets in the Components segment by $ 3.8 billion and Accelera segment by $ 0.3 billion in 2022.

 NOTE 24. RUSSIAN OPERATIONS
 On March 17, 2022, the Board indefinitely suspended our operations in Russia due to the ongoing conflict in Ukraine. At the time of suspension, our Russian operations included a wholly-owned distributor in Russia, an unconsolidated joint venture with KAMAZ (a Russian truck manufacturer) and direct sales into Russia from our other business segments. As a result of the indefinite suspension of operations, we evaluated the recoverability of assets in Russia and assessed other potential liabilities. The following summarizes the costs associated with the suspension of our Russian operations in our Consolidated Statements of Net Income:

 Year ended

2022
 Statement of Net Income Location

 Inventory write-downs
 $
 Cost of sales

 Accounts receivable reserves

 Impairment and other joint venture costs

 Other

 Russian suspension costs, net of recoveries
 $

 For the years ended December 31, 2024 and 2023, there were no material additional costs.

 NOTE 25. 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 Engine, Components, Distribution, Power Systems and Accelera. This reporting structure is organized according to the products and markets each segment serves. 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 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 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, maintaining relationships with various OEMs throughout the world and providing selected sales and aftermarket support for our Accelera business. The Power Systems segment is an integrated power provider, which designs, manufactures and sells standby and prime power generators, engines (16 liters and larger) for standby and prime power generator sets and industrial applications (including mining, oil and gas, marine, rail and defense), alternators and other power components. The Accelera segment designs, manufactures, sells and supports electrified power systems with innovative components and subsystems, including battery, fuel cell and electric powertrain technologies as well as hydrogen production technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of electrified power systems and

 related components and subsystems and our electrolyzers for hydrogen production. 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 CODM uses 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. EBITDA provides our CODM with a full picture of the profitability of a segment to drive decisions and resource allocation. EBITDA is used as the key profitability measure when we set our annual operating plan, is the metric with which our CODM assesses results and is a key component of our annual variable compensation plans. 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 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 IT, human resources, legal, finance and supply chain management. We do not allocate gains or losses of corporate-owned life insurance, the Settlement Agreements charge and the gain and certain costs related to the divestiture of Atmus. EBITDA may not be consistent with measures used by other companies.

 Summarized financial information regarding our reportable operating segments at December 31, is shown in the table below:

 Distribution
 Total Segments

 2024

 $
 8,987
 $
 9,894
 $
 11,352
 $
 3,500
 $
 $

 2,725
 1,785
 2,908
 7,495

 11,712
 11,679
 6,408
 41,597

 Cost of goods sold (excluding warranty expenses)
 8,707
 9,346
 9,185
 4,506
 (1)

 32,387

 Warranty expenses

 Selling expenses
 (1)

 1,233

 Administrative expenses
 (1)

 2,010

 (1)

 1,461

 Equity, royalty and interest income (loss) from investees
 ( 50)
 (1)

 Other income (expense) (2)

 ( 59)
 —
 ( 183)
 (1)

 ( 165)

 Add back: Depreciation and amortization (3)

 1,053

 $
 1,653
 $
 1,591
 (4)

 $
 1,378
 $
 1,180
 $
 ( 764)
 (1)

 $
 5,038

 Interest income (5)

 $
 $
 $
 $
 $
 $

 Net assets
 2,076
 6,433
 3,151
 2,350
 1,234
 15,244

 Investments and advances to equity investees
 1,883

 1,208

 2023

 $
 8,874
 $
 11,531
 $
 10,199
 $
 3,125
 $
 $

 2,810
 1,878
 2,548
 7,304

 11,684
 13,409
 5,673
 41,369

 Cost of goods sold (excluding warranty expenses)
 8,825
 10,717
 8,239
 4,173
 32,478

 Warranty expenses

 Selling expenses
 1,269

 Administrative expenses
 2,031

 1,498

 Equity, royalty and interest income (loss) from investees
 ( 15)

 Other income (expense) (2)

 ( 54)

 Add back: Depreciation and amortization (3)

 1,016

 $
 1,630
 $
 1,840
 (6)

 $
 1,209
 $
 $
 ( 443)
 $
 5,072

 Interest income (5)

 $
 $
 $
 $
 $
 $

 Net assets
 6,965
 2,348
 1,938
 1,159
 13,340

 Investments and advances to equity investees
 1,795

 1,213

 (Table continues on next page)

 Distribution
 Total Segments

 2022

 $
 8,199
 $
 7,847
 $
 8,901
 $
 2,951
 $
 $

 2,746
 1,889
 2,082
 6,767

 10,945
 9,736
 8,929
 5,033
 34,841

 Cost of goods sold (excluding warranty expenses)
 8,346
 7,727
 7,285
 3,884
 27,552

 Warranty expenses

 Selling expenses
 1,038

 Administrative expenses
 1,595

 1,278

 Equity, royalty and interest income (loss) from investees
 (7)

 ( 2)

 Other income (expense) (2)

 ( 35)
 ( 2)

 Russian suspension costs (8)

 (9)

 —

 Add back: Depreciation and amortization (3)

 $
 1,535
 $
 1,346
 (10)

 $
 $
 $
 ( 334)
 $
 4,031

 Interest income (5)

 $
 $
 $
 $
 $
 —
 $

 Net assets
 1,451
 7,306
 2,698
 2,382
 1,158
 14,995

 Investments and advances to equity investees
 1,757

 (1) Included $ 112 million of charges in cost of sales, $ 10 million of charges in selling, general and administrative expenses, $ 2 million of charges in research and development expenses, $ 17 million of charges in equity, royalty and interest income (loss) from investees, $ 171 million of charges in other operating expenses and $ 312 million of charges in EBITDA, all related to Accelera strategic reorganization actions in the fourth quarter of 2024. See NOTE 22, "ACCELERA STRATEGIC REORGANIZATION ACTIONS," for additional information.

 (2) Other income (expense) includes other operating expense, net and other income, net from our Consolidated Statements of Net Income.

 (3) Depreciation and amortization are not considered significant segment expenses but are presented here to reconcile to EBITDA, the measure used by our CODM. Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in our Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs were $ 12 million, $ 8 million and $ 3 million for the years ended 2024, 2023 and 2022, respectively. A portion of depreciation expense is included in research, development and engineering expense.

 (4) Included $ 21 million of costs associated with the divestiture of Atmus for the year ended December 31, 2024.

 (5) Interest income is a component of other income (expense).

 (6) Included $ 78 million of costs associated with the divestiture of Atmus for the year ended December 31, 2023.

 (7) Included a $ 28 million impairment of our joint venture with KAMAZ and $ 3 million of royalty charges as part of our costs associated with the indefinite suspension of our Russian operations. See NOTE 24, "RUSSIAN OPERATIONS," for additional information.

 (8) See NOTE 24, "RUSSIAN OPERATIONS," for additional information.

 (9) Included $ 31 million of Russian suspension costs reflected in the equity, royalty and interest income (loss) from investees line above.

 (10) Included $ 83 million of costs related to the acquisition and integration of Meritor and $ 28 million of costs associated with the divestiture of Atmus.

 A reconciliation of our segment information to the corresponding amounts in our Consolidated Statements of Net Income is shown in the table below:

 2024
 2023
 2022

 TOTAL SEGMENT EBITDA
 $
 5,038
 $
 5,072
 $
 4,031

 Intersegment eliminations and other (1)

 1,288
 ( 2,055)
 ( 232)

 Less:

 Interest expense

 Depreciation and amortization
 1,053
 1,016

 INCOME BEFORE INCOME TAXES
 $
 4,903
 $
 1,626
 $
 2,819

 (1) Intersegment eliminations and other included a $ 1.3 billion gain related to the divestiture of Atmus and $ 14 million of costs associated with the divestiture of Atmus for the year ended December 31, 2024. The year ended December 31, 2023, included $ 2.0 billion related to the Settlement Agreements charge, $ 22 million of costs associated with the divestiture of Atmus and $ 21 million of voluntary retirement and voluntary separation charges. The year ended December 31, 2022, included $ 53 million of costs associated with the divestiture of Atmus. See NOTE 14, "COMMITMENTS AND CONTINGENCIES," and NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.

 A reconciliation of our segment net assets to the corresponding amounts in the Consolidated Balance Sheets is shown in the table below:

 2024
 2023

 Net assets for operating segments
 $
 15,244
 $
 13,340

 Cash, cash equivalents and marketable securities
 2,264
 2,741

 Net liabilities deducted in arriving at net segment assets (1)

 12,556
 14,531

 Pension and OPEB adjustments excluded from net segment assets

 Deferred tax assets not allocated to segments
 1,119
 1,082

 Deferred debt costs not allocated to segments

 Total assets
 $
 31,540
 $
 32,005

 (1) Liabilities deducted in arriving at net segment assets include certain accounts payable, accrued expenses, long-term liabilities and other items.

 See NOTE 2, "REVENUE FROM CONTRACTS WITH CUSTOMERS," for segment net sales by geographic area.
 Long-lived assets include property, plant and equipment, net of depreciation, investments and advances to equity investees and other assets, excluding deferred tax assets, refundable taxes and deferred debt expenses. Long-lived segment assets by geographic area were as follows:

 2024
 2023

 United States
 $
 5,751
 $
 5,013

 China
 1,030

 India

 Other countries
 2,426
 2,760

 Total long-lived assets
 $
 9,711
 $
 9,484

 Our largest customer is PACCAR Inc. Worldwide sales to this customer were approximately $ 5.4 billion, $ 5.5 billion and $ 4.5 billion for the years ended December 31, 2024, 2023 and 2022, representing 16 percent, 16 percent and 16 percent, respectively, of our consolidated net sales. No other customer accounted for more than 10 percent of consolidated net sales.

 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 None.

 ITEM 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
 As of the end of the period covered by this Annual Report on Form 10-K, our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, 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 Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.
 Changes in Internal Control over Financial Reporting
 There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 Management's Report on Internal Control Over Financial Reporting
 The information required by Item 9A relating to Management's Annual Report on Internal Control Over Financial Reporting and Attestation Report of the Registered Public Accounting Firm is incorporated herein by reference to the information set forth under the captions "Management's Report on Internal Control Over Financial Reporting" and "Report of Independent Registered Public Accounting Firm," respectively, under Item 8.

 ITEM 9B. Other Information
 (b) During the fourth 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 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
 Not Applicable.

 ITEM 10. Directors, Executive Officers and Corporate Governance
 The information required by Item 10 is incorporated by reference to the relevant information under the captions "Corporate Governance" and "Election of Directors" in our 2025 Proxy Statement, which will be filed within 120 days after the end of 2024. Information regarding our executive officers may be found in Part 1 of this annual report under the caption "Information About Our Executive Officers." Except as otherwise specifically incorporated by reference, our Proxy Statement is not deemed to be filed as part of this annual report.

 ITEM 11. Executive Compensation
 The information required by Item 11 is incorporated by reference to the relevant information under the caption "Executive Compensation" in our 2025 Proxy Statement, which will be filed within 120 days after the end of 2024.

 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 Information concerning our equity compensation plans at December 31, 2024, was as follows:

 Plan Category
 Number of securities to be
 issued upon exercise of
 outstanding options,
 warrants and rights(1)

 exercise price of
 outstanding options,
 warrants and rights(2)

 Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in the first column)

 Equity compensation plans approved by security holders
 1,691,930
 $
 154.33
 3,216,351

 (1) The number is comprised of 814,341 stock options, 472,472 performance shares and 405,117 restricted shares. See Note 18, "STOCK INCENTIVE AND STOCK OPTION PLANS," to the Consolidated Financial Statements for a description of how options and shares are awarded.

 (2) The weighted-average exercise price relates only to the 814,341 stock options. Performance and restricted shares do not have an exercise price and, therefore, are not included in this calculation.

 We have no equity compensation plans not approved by security holders.
 The remaining information required by Item 12 is incorporated by reference to the relevant information under the caption "Stock Ownership of Directors, Management and Others" in our 2025 Proxy Statement, which will be filed within 120 days after the end of 2024.

 ITEM 13. Certain Relationships, Related Transactions and Director Independence
 The information required by Item 13 is incorporated by reference to the relevant information under the captions "Corporate Governance" and "Other Information-Related-Party Transactions" in our 2025 Proxy Statement, which will be filed within 120 days after the end of 2024.

 ITEM 14. Principal Accounting Fees and Services
 The information required by Item 14 is incorporated by reference to the relevant information under the caption "Ratification of Independent Public Accountants" in our 2025 Proxy Statement, which will be filed within 120 days after the end of 2024.

 ITEM 15. Exhibits and Financial Statement Schedules
 (a)1. Financial Statements
 The following Consolidated Financial Statements and schedules filed as part of this report can be found in Item 8 "Financial Statements and Supplementary Data":
 • Management's Report to Shareholders
 • Report of Independent Registered Public Accounting Firm
 • Consolidated Statements of Net Income for the years ended December 31, 2024, 2023 and 2022
 • Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022
 • Consolidated Balance Sheets at December 31, 2024 and 2023
 • Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
 • Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Equity for the years ended December 31, 2024, 2023 and 2022
 • Notes to the Consolidated Financial Statements
 (a) 2. Financial Statement Schedules
 Separate financial statement schedules were omitted because such information was inapplicable or was included in the financial statements or notes described above.

 a. The exhibits listed in the following Exhibit Index are filed as part of this Annual Report on Form 10-K.
 CUMMINS INC.

 Exhibit No.
 Description of Exhibit

 (a)

 Agreement and Plan of Merger, dated February 21, 2022, by and among Meritor, Inc., Cummins Inc. and Rose NewCo Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 24, 2022 (File No. 001-04949)).

 (a)

 Restated Articles of Incorporation, as amended and restated, effective as of May 8, 2018 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 9, 2018 (File No. 001-04949)).

 (b)

 By-Laws, as amended and restated, effective as of February 12, 2019 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on February 13, 2019 (File No. 001-04949)).

 (a)

 Indenture, dated as of September 16, 2013, by and between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission on September 16, 2013 (Registration Statement No. 333-191189)).

 (b)

 Second Supplemental Indenture, dated as of September 24, 2013, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 of the Current Report on 8-K, filed by Cummins Inc. with the Securities and Exchange Commission on September 24, 2013 (File No. 001-04949)).

 (c)

 Third Supplemental Indenture, dated as of August 24, 2020, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on August 24, 2020 (File No. 001-04949)).

 (d)

 Fourth Supplemental Indenture, dated as of August 24, 2020, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on August 24, 2020 (File No. 001-04949)).

 (e)

 Fifth Supplemental Indenture, dated as of August 24, 2020, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on August 24, 2020 (File No. 001-04949)).

 (f)

 Description of Capital Stock (incorporated by reference to Exhibit 4(d) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 001-04949)).

 (g)

 Sixth Supplemental Indenture, dated as of February 20, 2024, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on February 20, 2024 (File No. 001-04949)).

 (h)

 Seventh Supplemental Indenture, dated as of February 20, 2024, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on February 20, 2024 (File No. 001-04949)).

 (i)

 Eighth Supplemental Indenture, dated as of February 20, 2024, between Cummins Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on February 20, 2024 (File No. 001-04949)).

 (a)#

 Target Bonus Plan (incorporated by reference to Exhibit 10(b) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-04949)).

 (b)#

 Deferred Compensation Plan, as amended and restated February 15, 2021 (incorporated by reference to Exhibit 10(a) to Cummins Inc.'s Quarterly Report on Form 10-Q for the quarter ended April 4, 2021 (File No. 001-04949)).

 (c)#

 Supplemental Life Insurance and Deferred Income Plan, as amended and restated effective as of December 10, 2018 (incorporated by reference to Exhibit 10(d) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-04949)).

 (d)#

 Deferred Compensation Plan for Non-Employee Directors, as amended and restated February 15, 2021 (incorporated by reference to Exhibit 10(b) to Cummins Inc.'s Quarterly Report on Form 10-Q for the quarter ended April 4, 2021 (File No. 001-04949)).

 (e)#

 Excess Benefit Retirement Plan, as amended (incorporated by reference to Exhibit 10(g) to Cummins Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 28, 2014 (File No. 001-04949)).

 (f)#

 Employee Stock Purchase Plan, as amended (incorporated by reference to Annex B to the Company's definitive proxy statement filed with the Securities and Exchange Commission on Schedule 14A on March 27, 2023 (File No. 001-04949)).

 (g)#

 Longer Term Performance Plan (incorporated by reference to Exhibit 10(i) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-04949)).

 (h)#

 2006 Executive Retention Plan, as amended (incorporated by reference to Exhibit 10(j) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 001-04949)).

 (i)#

 Senior Executive Target Bonus Plan (incorporated by reference to Exhibit 10(k) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-04949)).

 (j)#

 Senior Executive Longer Term Performance Plan (incorporated by reference to Exhibit 10(l) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-04949)).

 (k)#

 Form of Long-Term Grant Notice under the 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10(l) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023 (File No. 001-04949)).

 (l)#

 2012 Omnibus Incentive Plan, as amended and restated (incorporated by reference to Exhibit 10 to Cummins Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 1, 2018 (File No. 001-04949)).

 (m)#

 Form of Stock Option Agreement under the 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10(q) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-04949)).

 (n)#

 Form of Restricted Stock Unit Award Agreement under the 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10(o) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023 (File No. 001-04949)).

 (o)#

 Form of Performance-Based Restricted Stock Unit Award Agreement under the 2012 Omnibus Incentive Plan (incorporated by reference to Exhibit 10 to Cummins Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (File No. 001-04949)).

 (p)#

 Key Employee Stock Investment Plan (incorporated by reference to Exhibit 4.3 to Cummins Inc.'s Registration Statement on Form S-8 filed on July 9, 2024 (File No. 333-280729)).

 (q)

 Second Amended and Restated 364-Day Credit Agreement, dated as of June 3, 2024, by and among Cummins Inc., the subsidiary borrowers referred to therein, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on June 3, 2024 (File No. 001-04949)).

 (r)

 Sixth Amended and Restated 364-Day Credit Agreement, dated as of June 3, 2024, by and among Cummins Inc., the subsidiary borrowers referred to therein, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on June 3, 2024 (File No. 001-04949)).

 (s)#

 Amendment No. 1 to Supplemental Life Insurance and Deferred Income Plan, effective as of July 14, 2020 (incorporated by reference to Exhibit 10.1 to Cummins Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 27, 2020 (File No. 001-04949)).

 (t)#

 Deposit Share Program, dated as of February 12, 2024 (incorporated by reference to Exhibit 10(y) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023 (File No. 001-04949)).

 Insider Trading Policy (filed herewith).

 Subsidiaries of the Registrant (filed herewith).

 Consent of PricewaterhouseCoopers LLP (filed herewith).

 Powers of Attorney (filed herewith).

 (a)

 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

 (b)

 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

 Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

 Compensation Recovery Policy (filed herewith).

.INS*

.SCH*

.CAL*

.DEF*

.LAB*

.PRE*

 _______________________________________________
 # A management contract or compensatory plan or arrangement.

 ITEM 16. Form 10-K Summary (optional)
 Not Applicable.

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) 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.

 By:
 /s/ MARK A. SMITH

 By:
 /s/ LUTHER E. PETERS

 Mark A. Smith
 Vice President and Chief Financial Officer
 (Principal Financial Officer)

 Luther E. Peters
 Vice President—Corporate Controller
 (Principal Accounting Officer)

 Date:

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 Signatures

 Title

 Date

 /s/ JENNIFER RUMSEY
 Chair and Chief Executive Officer
(Principal Executive Officer)

 Jennifer Rumsey

 /s/ MARK A. SMITH
 Vice President and Chief Financial Officer
(Principal Financial Officer)

 Mark A. Smith

 /s/ LUTHER E. PETERS
 Vice President—Corporate Controller
(Principal Accounting Officer)

 Luther E. Peters

 *

 Gary L. Belske

 *

 Robert J. Bernhard

 *

 Bruno V. Di Leo Allen

 *

 Daniel W. Fisher

 *

 Carla A. Harris

 *

 Thomas J. Lynch

 *

 William I. Miller

 *

 Kimberly A. Nelson

 *

 Karen H. Quintos

 *

 John H. Stone

 *By:
 /s/ MARK A. SMITH

 Mark A. Smith
 Attorney-in-fact