CMI Cummins, Inc.

Risks

• A sustained market slowdown due to the impacts from the COVID-19 pandemic, other public health crises, epidemics or pandemics or otherwise, could have a material and adverse effect on our results of operations, financial condition and cash flows.
• Our manufacturing and supply chain abilities may be materially and adversely impacted by an extended shutdown or disruption of our operations due to the COVID-19 pandemic which could materially and adversely affect our results of operations, financial condition and cash flows.
• We are vulnerable to supply shortages from single-sourced suppliers, including suppliers that may be impacted by the COVID-19 pandemic, and any delay in receiving critical supplies could have a material adverse effect on our results of operations, financial condition and cash flows.
• We face the challenge of accurately aligning our capacity with our demand.
• Financial distress, particularly related to the COVID-19 pandemic, or 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 are conducting a formal internal review of our emission certification process and compliance with emission standards with respect to our pick-up truck applications and working with the EPA and CARB, as well as the Department of Justice (DOJ) and SEC, to address their questions about these applications. The results of this formal review and regulatory and government agency processes, or the discovery of any noncompliance issues, could have a material adverse impact on our results of operations and cash flows.
• The COVID-19 pandemic created disruptions and turmoil in global credit and financial markets and the ongoing impacts could have a material adverse effect on our results of operations, financial condition and cash flows.
• Government actions to stabilize credit markets and financial institutions or other industries may not be effective.
• Our products are subject to recall for performance or safety-related issues.
• We operate our business on a global basis and policy changes affecting international trade could adversely impact the demand for our products and our competitive position.
• A slowdown in infrastructure development and/or depressed commodity prices could adversely affect our business.
• The U.K.’s exit from the European Union (EU) could materially and adversely impact our results of operations, financial condition and cash flows.
• We may be adversely impacted by work stoppages and other labor matters.
• We rely on our executive leadership team and other key personnel.
• Lower-than-anticipated market acceptance of our new or existing products or services, including reductions in demand for diesel engines, could have a material adverse impact on our results of operations, financial condition and cash flows.
• Our truck manufacturers and OEM customers may discontinue outsourcing their engine supply needs.
• Our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions and divestitures may expose us to additional costs and risks.
• Our information technology systems 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 may fail to realize all of the expected enhanced revenue, earnings and cash flow from our investment in the Eaton Cummins Automated Transmission Technologies joint venture.
• We are exposed to political, economic and other risks that arise from operating a multinational business.
• We face significant competition in the markets we serve.
• Increasing global competition among our customers may affect our existing customer relationships and restrict our ability to benefit from some of our customers' growth.
• We are subject to foreign currency exchange rate and other related risks.
• Our products are exposed to variability in material and commodity costs.
• 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.
• 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.
• Our global operations are subject to laws and regulations that impose significant compliance costs and create reputational and legal risk.
• Our business is exposed to potential product liability claims.
• Our operations are subject to increasingly stringent environmental laws and regulations.
• Significant declines in future financial and stock market conditions, particularly those related to the sustained slowdown of the global economy due to the COVID-19 pandemic, could diminish our pension plan asset performance and adversely impact our results of operations, financial condition and cash flow.
• 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.
• We are exposed to risks arising from the price and availability of energy.