What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-14 · 197 added, 172 removed, 739 unchanged (33% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements

Management’s Report to Shareh olders

Report of P rice waterhouse C oopers LLP (PCAOB ID 238 ), Independent Registered Public Accounting Firm

Report of PricewaterhouseCoopers LLP (PCAOB ID 238 ), Independent Registered Public Accounting Firm

Consolidated Statements of Net Income

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Notes to the Financial Statements

Management’s Report to Shareholders

Management’s Report on Internal Control over Financial Reporting

As a public company, we will be required to maintain internal control over financial reporting and to evaluate and determine the effectiveness of our internal control over financial reporting.

This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

Beginning with our annual report on Form 10-K as of and for the year ending December 31, 2024, we will be required to provide a management report on internal control over financial reporting, as well as an attestation of our independent registered public accounting firm.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Atmus Filtration Technologies Inc.

Opinion on the Financial Statements

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Atmus Filtration Technologies Inc.

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of net income, of comprehensive income, of changes in equity and of 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").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

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 Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

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 of these consolidated financial statements in accordance with the standards of the PCAOB.

Our audits 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.

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.

We believe that our audits provide a reasonable basis for our opinion.

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

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Revenue Recognition

As described in Note 3 to the consolidated financial statements, the Company sells to customers either through long-term arrangements or standalone purchase orders.

As described in Notes 3 and 4 to the consolidated financial statements, the Company sells to customers either through long-term arrangements or standalone purchase orders.

The Company’s long-term arrangements generally do not include committed volumes until underlying purchase orders are issued.

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For the year ended December 31, 2024, the Company’s net sales were $1,669.6 million.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is the high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

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, among others

(i) evaluating revenue recognized during the year for a sample of revenue transactions by obtaining and inspecting source documents, including purchase orders, invoices, shipping documentation, and subsequent cash receipts, where applicable and (ii) conforming a sample of outstanding customer invoice balances as of year-end and obtaining and inspecting source documents, including subsequent cash receipts or shipping documentation, for confirmations not returned.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others, (i) testing revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, shipping documentation, and subsequent cash receipts, and (ii) confirming a sample of outstanding customer invoice balances as of December 31, 2024 and, for confirmations not returned, obtaining and inspecting source documents, such as subsequent cash receipts or shipping documentation.

/s/ PricewaterhouseCoopers LLP

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NET INCOME $ 185.6 $ 171.3 $ 170.4

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

Change in pension and other postretirement defined benefit plans 0.5 ( 1.0 ) 2.4

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Accounts and notes receivable, net 254.2 246.8

Trade and other receivables 184.5 174.2

Related party receivables 62.3 61.8

Inventories 266.6 250.0

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Accounts payable $ 193.1 $ 236.6

Related party payables 62.4 82.0

Accrued compensation, benefits and retirement costs 37.2 41.8

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Commitments and contingencies (Note 14)

Common stock, $ 0.0001 par value ( 2,000,000,000 shares authorized and 83,297,796 shares issued and outstanding as of December 31, 2023)

Net parent investment — 511.4

Common stock, $ 0.0001 par value ( 2,000,000,000 shares authorized, 83,403,813 and 83,297,796 shares issued at December 31, 2024 and December 31, 2023, respectively)

Additional paid-in capital 61.9 49.7

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Accumulated other comprehensive loss ( 79.0 ) ( 56.2 )

Treasury stock, at cost ( 537,643 shares at December 31, 2024 and no shares at December 31, 2023)

TOTAL EQUITY 227.4 80.7

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(in millions of U.S.

For the Years Ended

For the Years Ended December 31,

2024 2023 2022

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Equity in income of investees, net of dividends ( 2.5 ) ( 7.8 ) 0.4

Share-based compensation 11.9 7.2 —

Foreign currency remeasurement and transaction exposure ( 3.6 ) ( 4.5 ) ( 1.9 )

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Trade and other receivables ( 16.8 ) ( 10.1 ) ( 18.3 )

Related party receivables ( 0.7 ) ( 2.7 ) ( 8.0 )

Inventories ( 25.4 ) ( 4.3 ) ( 9.7 )

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Accounts payable ( 39.3 ) 4.4 18.5

Related party payables ( 19.7 ) 5.9 28.3

Other accrued expenses ( 1.8 ) 30.2 0.8

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Payments on long-term debt ( 7.5 ) ( 50.0 ) —

Repurchases of Common stock ( 20.0 ) — —

Dividends paid ( 8.3 ) — —

Net transfers to Parent — ( 579.5 ) ( 128.2 )

Other, net — 4.3 —

Net cash provided by (used in) financing activities 24.8 ( 128.2 ) ( 176.5 )

Net cash (used in) provided by financing activities ( 35.8 ) 24.8 ( 128.2 )

Effect of exchange rate changes on cash and cash equivalents ( 4.7 ) — —

Net increase in cash and cash equivalents 16.3 168.0 —

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(in millions of U.S.

Stock Net Parent

Investment Additional

Capital Retained

Earnings Accumulated

Common Stock Net Parent

Investment Additional Paid-in Capital Retained Earnings Accumulated

Comprehensive

Balance December 31, 2020 $ — $ 475.6 $ — $ — $ ( 30.3 ) $ 445.3

Loss Treasury Stock Total Equity

Balance at December 31, 2021 $ — $ 469.2 $ — $ — $ ( 41.6 ) $ — $ 427.6

Net income — 170.4 — — — — 170.4

Other comprehensive loss, net of tax — — — — ( 11.3 ) ( 11.3 )

Share-based awards — — — — — —

Net transfers to Parent — ( 176.5 ) — — — ( 176.5 )

Balance December 31, 2021 $ — $ 469.2 $ — $ — $ ( 41.6 ) $ 427.6

Other comprehensive income, net of tax — — — — ( 14.2 ) — ( 14.2 )

Net transfers (to) from Parent — ( 128.2 ) — — — — ( 128.2 )

Balances at December 31, 2022 $ — $ 511.4 $ — $ — $ ( 55.8 ) $ — $ 455.6

Net income — 84.1 — 87.2 — — 171.3

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Share-based awards — — 4.3 — — — 4.3

Net transfers to Parent — ( 128.2 ) — — — ( 128.2 )

Balance December 31, 2022 $ — $ 511.4 $ — $ — $ ( 55.8 ) $ 455.6

Net transfers (to) from Parent — ( 595.5 ) 45.4 — — — ( 550.1 )

Balances at December 31, 2023 $ — $ — $ 49.7 $ 87.2 $ ( 56.2 ) $ — $ 80.7

Net income — — — 185.6 — — 185.6

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Share-based awards — — 12.2 — — — 12.2

Net transfers (to) from Parent — ( 595.5 ) 45.4 — — ( 550.1 )

Balance December 31, 2023 $ — $ — $ 49.7 $ 87.2 $ ( 56.2 ) $ 80.7

Common stock repurchased — — — — — ( 20.0 ) ( 20.0 )

Cash dividends declared ($ 0.10 per share)

— — — ( 8.3 ) — — ( 8.3 )

Balances at December 31, 2024 $ — $ — $ 61.9 $ 264.5 $ ( 79.0 ) $ ( 20.0 ) $ 227.4

ATMUS FILTRATION TECHNOLOGIES INC.

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Atmus Filtration Technologies Inc.

(“Atmus” or the “Company”) develops, designs, manufactures and sells filters, coolant and chemical products.

Atmus offers products for first fit and aftermarket applications, including air filters, fuel filters, fuel water separators, lube filters, hydraulic filters, coolants, fuel additives and other filtration systems to original equipment manufacturers, dealers/distributors and end-users.

Atmus supports a wide customer base in a diverse range of markets, including on-highway and off-highway segments such as oil and gas, agriculture, mining, construction, power generation, marine and industrial markets.

The Company produces and sells globally recognized Fleetguard branded products in over 140 countries, including countries in North America, Europe, South America, Asia, Australia and Africa.

Fleetguard branded products are available through distribution centers worldwide.

(“Atmus” or the “Company”) is one of the global leaders of filtration products for on-highway commercial vehicles and off-highway agriculture, construction, mining and power generation vehicles and equipment.

Atmus designs and manufactures advanced filtration products, principally under the Fleetguard brand, that provide superior asset protection and enable lower emissions.

Approximately 14 % of Atmus’ net sales in 2024 were generated through first-fit sales to OEMs, where its products are installed as components for new vehicles and equipment.

Approximately 86 % of Atmus’ net sales in 2024 were generated in the aftermarket, where its products are installed as replacement or repair parts, leading to a strong recurring revenue base.

Building on its more than 65-year history, Atmus continues to grow and differentiate itself through its global footprint, comprehensive offering of premium products, technology leadership and multi-channel path to market.

In April 2022, Cummins Inc.

(“Cummins” or the “Parent”) announced its intention to separate its filtration business (the “Filtration Business”) into a standalone publicly traded company (the “Separation”).

In preparation for separation from Cummins, Atmus, as its predecessor in interest, was incorporated as a wholly-owned subsidiary of Cummins in Delaware on April 1, 2022 in connection with the planned Separation.

(“Cummins”) announced its intention to separate its filtration business (the “Filtration Business”) into a standalone publicly traded company (the “Separation”).

In preparation for the Separation from Cummins, Atmus, as its predecessor in interest, was incorporated as a wholly-owned subsidiary of Cummins in Delaware on April 1, 2022 in connection with the planned Separation.

Prior to the completion of Atmus’ initial public offering (the “IPO”), Cummins completed, in all material respects, the transfer of the assets and liabilities of the Filtration Business to Atmus and its subsidiaries as detailed in the separation agreement Atmus entered into with Cummins.

Atmus’ Registration Statement on Form S-1, as amended, filed with the Securities and Exchange Commission (“Commission”) on May 16, 2023, was declared effective on May 25, 2023, and Atmus’ common shares began trading on the New York Stock Exchange under the symbol “ATMU” on May 26, 2023.

On May 30, 2023, the IPO was completed through the sale on behalf of certain commercial paper holders of Cummins of 16,243,070 shares of common stock, including the underwriters’ full exercise of their 30-day option to purchase 2,118,661 shares to cover over-allotments.

None of the proceeds of the IPO were for the benefit of Atmus.

As of the closing of the IPO, Cummins owned, and continues to own, approximately 80.5 % of the outstanding shares of Atmus common stock.

Atmus Debt Agreement

On September 30, 2022, and as amended on February 15, 2023, Atmus entered into a $ 1.0 billion credit agreement (“Credit Agreement”) with Cummins and a syndicate of banks, providing for a $ 600 million term loan facility (the “term loan”) and a $ 400 million revolving credit facility (the “revolving credit facility”), in anticipation of the Separation.

On September 30, 2022, and as amended on February 15, 2023, Atmus entered into a $ 1.0 billion credit agreement (“Credit Agreement”) with a syndicate of banks, providing for a $ 600 million term loan facility (the “term loan”) and a $ 400 million revolving credit facility (the “revolving credit facility”), in anticipation of the Separation.

Borrowings under the Credit Agreement did not become available until the IPO occurred.

The facilities covered by the Credit Agreement will mature on September 30, 2027.

None of the proceeds of the IPO were for the benefit of Atmus.

As of the closing of the IPO, Cummins owned approximately 80.5 % of the outstanding shares of Atmus common stock.

Upon completion of the IPO, Atmus borrowed $ 650 million, consisting of proceeds of the term loan and amounts drawn under the revolving credit facility, and paid such amounts to Cummins in partial consideration for the Separation.

On February 14, 2024, Cummins announced an exchange offer whereby Cummins shareholders could exchange all or a portion of Cummins common stock for shares of Atmus common stock owned by Cummins.

The divestiture of Atmus shares by Cummins was completed on March 18, 2024 and resulted in the full separation of Atmus and divestiture of Cummins’ entire ownership and voting interest in Atmus (“Full Separation”).

BASIS OF PRESENTATION

As Atmus became a publicly traded company upon the IPO, its financial statements are now presented on a consolidated basis.

In preparation for the IPO, the Company’s historical consolidated financial statements were prepared on a standalone basis, which reflected a combination of entities under common control that had been “carved out” of and derived from the historical consolidated financial statements and accounting records of Cummins.

The financial statements for all periods presented, including the historical results of the Company prior to May 26, 2023, are now referred to as “Consolidated Financial Statements”, and have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP).

In preparation for the IPO, the Company’s historical combined financial statements were prepared on a standalone basis, which reflected a combination of entities under common control that had been “carved out” of and derived from the historical consolidated financial statements and accounting records of Cummins.

accordance with generally accepted accounting principles in the United States of America (GAAP).

All intercompany balances and transactions are eliminated in consolidation.

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A portion of the shared service costs were historically allocated to the Filtration Business.

Cummins also performed certain corporate functions for the Filtration Business and the related corporate expenses were allocated from Cummins.

Cummins also performed certain corporate functions for the Filtration Business.

The corporate expenses related to the Filtration Business were allocated from Cummins.

These allocated costs primarily related to certain governance and corporate functions, including finance, human resources, investor relations, legal, tax, treasury and certain other costs.

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As of the IPO Date

In connection with the Separation, we entered into various agreements with Cummins, including a separation agreement.

In connection with the Separation, Atmus entered into various agreements with Cummins, including a separation agreement.

In the separation agreement, there were certain assets and liabilities identified in the schedules, including leases and unrecognized tax liabilities, which were retained by Cummins and were reflected as Net Parent Investment in the Company’s Consolidated Financial Statements, and those that were transferred to the Company, including additional pension assets, other compensation obligations and certain other assets and liabilities, which were transferred to the Company through Net Parent Investment in the Company’s Consolidated Financial Statements.

These various agreements comprehensively provide a framework for our relationship with Cummins and govern various interim and ongoing relationships between us and Cummins post IPO.

These various agreements comprehensively provide a

framework for our relationship with Cummins and govern various interim and ongoing relationships between us and Cummins post IPO.

As part of the Separation, Net Parent Investment was reclassified as Additional Paid-in Capital.

Periods Post IPO

Following the IPO, certain services continue to be provided by Cummins under a transition services agreement.

The Company incurred certain costs in its establishment as a standalone public company and

expects to incur ongoing additional costs associated with operating as an independent, publicly traded company.

As a standalone entity, the Company will file tax returns on its own behalf, and tax balances and effective income tax rates may differ from the amounts reported in the historical periods.

Atmus currently files a consolidated Federal income tax return and returns in certain other jurisdictions with Cummins.

Following a full separation from Cummins, Atmus will file tax returns in those jurisdictions on its own behalf.

Following the IPO, certain services continue to be provided by Cummins under the transition services agreement.

The Company incurred certain costs in its establishment as a standalone public company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company.

Post IPO, Atmus filed a consolidated Federal income tax return and returns in certain other jurisdictions with Cummins.

Post IPO, Retained earnings began to accumulate and the balance reflected on the Consolidated Balance Sheets reflects earnings for the period May 26, 2023 through December 31, 2024.

Periods Post Full Separation

Following Full Separation, Cummins will continue to provide certain services to Atmus under the transition services agreement.

The transition services agreement relates primarily to administrative services, which are expected to be completed by August 2025.

Atmus will continue to pay Cummins mutually agreed upon fees for these services.

Post Full Separation, Cummins is no longer considered a related party and activity post March 18, 2024, between Atmus and Cummins has been treated as arm’s-length transactions.

Atmus files tax returns in all jurisdictions on its own behalf post Full Separation, and tax balances and effective income tax rates may differ from the amounts reported in the historical periods.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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 judgement and are used for, but not limited to, estimates of future cash flows and other assumptions associated with goodwill and long-lived asset impairment tests, useful lives for depreciation and amortization, warranty programs, restructuring costs, income taxes, deferred tax valuation allowances, contingencies and allowances for doubtful accounts.

Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

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 goodwill and long-lived asset impairment tests, useful lives for depreciation and amortization, warranty programs, restructuring costs, income taxes, deferred tax valuation allowances, contingencies and allowances for doubtful accounts.

the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

Revenue From Contracts with Customers

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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.

allowance is recorded to reduce the tax assets to the net value management believes is more likely than not to be realized.

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.

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Examples of such items include net operating losses, tax credits carry forwards and valuation allowances, which may exist in the standalone financial statements but not in the Parent’s Consolidated Financial Statements.

Furthermore, the Consolidated Financial Statements do not reflect any amounts due to or due from the Parent for income tax related matters as these matters are settled at the end of each year.

The international tax framework introduced by the Organization for Economic Co-operation and Development under its Pillar Two initiative includes a global minimum tax of 15 percent.

Legislation adopting these provisions has been enacted in certain jurisdictions where the Company operates and is effective for the Company's 2024 fiscal year.

The Company has assessed this legislation and the Pillar Two provisions do not have a material impact on the Company’s tax expense.

A more complete description of our income taxes and the future benefits of our net operating loss and credit carryforwards is disclosed in Note 6, Income Taxes .

Russian Operations

On March 17, 2022, Cummins’ Board of Directors decided to indefinitely suspend its operations in Russia due to the ongoing conflict in Ukraine.

As a result of the suspension of operations, we evaluated the recoverability of assets in Russia and assessed other liabilities that may have been incurred.

We have experienced, and expect to continue to experience, an inability to collect customer receivables.

We also determined that we have some inventory items that were designated specifically for Russia that will not be able to be used elsewhere.

As a result of this suspension, ap proximately $ 1.7 million of accounts receivable were reserved for and $ 0.6 million of inventory was written off in 2022.

As of December 31, 2023, the accounts receivable reserves for our Russia operations were $ 1.5 million and no inventory was written off during the year.

The associated expense is recorded within Other operating expense, net and Cost of sales, respectively, in the Consolidated Statements of Net Income.

Cash and Cash Equivalents

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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.

allowance for doubtful accounts balances were $ 2.9 million and $ 2.4 million at December 31, 2023 and 2022, respectively;

the increase was principally driven by Russia as described above .

The allowance for doubtful accounts balances were $ 3.0 million and $ 2.9 million at December 31, 2024 and 2023, respectively .

Bad debt write-offs were not material during the three years ended December 31, 2024.

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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.

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.

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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.

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See Note 11, Product Warranty Liability , for additional information.

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 fe es, building costs, utilities, testing, technical IT, administrative expenses and allocation of corporate costs and are expensed, net of contract reimbursements, when incurred.

Research and development expenses were $ 42.3 million, $ 38.5 million and $ 41.6 million for t he years ended December 31, 2023, 2022 and 2021, respectively.

Research, Development and Engineering

Our research, development and engineering programs are focused on product improvements, product extensions, innovations and cost reductions for our customers.

Research, development and engineering expenditures include salaries, contractor fe es, building costs, utilities, testing, technical IT, administrative

expenses and allocation of corporate costs and are expensed, net of contract reimbursements, when incurred.

Research, development and engineering expenses were $ 40.6 million , $ 42.5 million and $ 38.6 million for t he years ended December 31, 2024, 2023 and 2022, respectively.

Related Party Transactions

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Certain joint venture agreements transfer product at cost, some transfer product on a cost-plus basis, and others transfer product at market value.

We also may purchase products and components from other

Cummins’ owned entities and sell products to other Cummins’ owned entities.

These purchases and sales take place on terms resulting in margins within a reasonable range of market rates.

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We operate our business as one operating segment and also one reportable segment based on the manner in which we review and evaluate operating performance.

The types of products from which revenue is derived are the same as those described in the description of the business section and the accounting policies are the same as those described in the summary of significant accounting policies.

The operating results are regularly reviewed by Atmus’ chief operating decision maker on a consolidated basis.

The chief operating decision maker is our Chief Executive Officer.

The chief operating decision maker assesses performance for our business and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income and is regularly provided with consolidated expense information from the income statement.

The measurement of business assets is reported on the balance sheet as total consolidated assets.

The chief operating decision maker uses net income predominately in the annual budget and forecasting process.

The chief operating decision maker considers budget-to-actual in deciding whether to reinvest profit into the operating segment or for other entity initiatives, such as acquisitions, paying dividends, or share repurchases.

The chief operating decision maker also uses the profit or loss measure for determining compensation of certain employees.

Stock-Based Compensation

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Stock compensation expense is generally amortized on a straight line basis over the service period during which awards are expected to vest, generally three years .

RSUs are typically granted to selected management employees on an annual basis and vest over three years .

RSUs are typically granted to selected employees on an annual basis and vest over three years .

Dividend equivalents are paid during the vesting period.

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Pensions and other Postretirement Benefits

Atmus and its Parent provide a range of benefits, including pensions, postretirement and post-employment benefits to eligible current and former employees, of which certain of our employees participate.

For purposes of Atmus’ Consolidated Financial Statements, participation in Cummins plans is being treated as a multiemployer plan.

Accordingly, the benefit obligations, plan assets and accumulated other comprehensive income (loss) amounts are not shown in the Consolidated Balance Sheets for these plans.

Atmus plans that have been transferred as part of the transaction, however, are treated as single-employer plans.

Atmus provides a range of benefits, including pensions, postretirement and post-employment benefits to eligible current and former employees, of which certain of our employees participate.

For purposes of Atmus’ Consolidated Financial Statements, participation in Atmus plans are treated as single-employer plans.

See Note 13, Pensions and Other Postretirement Benefits , for more information.

Net Parent Investment

Net Parent Investment represents our Parent’s historical investment in us, our accumulated net earnings after taxes and the net effect of transactions with and allocations from our Parent prior to the IPO.

Net Parent Investment in the Consolidated Balance Sheets represents Cummins’ net investment in Atmus and is presented in lieu of shareholders’ equity.

The Consolidated Statements of Changes in Net Parent Investment include net cash transfers between Cummins and Atmus pursuant to the centralized cash management and other treasury-related functions performed by Cummins.

Net Parent Investment represents Cummins’ historical investment in us, our accumulated net earnings after taxes and the net effect of transactions with and allocations from Cummins prior to the IPO.

The Consolidated Statements of Changes in Equity include net cash transfers between Cummins and Atmus pursuant to the centralized cash management and other treasury-related functions performed by Cummins for the periods prior to the IPO.

The Net Parent Investment account includes the settlement and net effect of transactions with and corporate allocations from Cummins including administrative expenses such as corporate finance, accounting and field shared services, information services, human resources, marketing, corporate office and other services.

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The net effect of other assets and liabilities and related income and expenses recorded at the corporate level and pushed down to Atmus are also included in Net Parent Investment.

All transactions reflected in Net Parent Investment in the accompanying Consolidated Balance Sheets have been considered cash receipts and payments for purposes of the Consolidated Statements of Cash Flows and

are reflected in financing activities in the accompanying Consolidated Statements of Cash Flows with the exception of certain non-cash items related to an unrecognized tax liability for FIN48 reserves and leased assets and related depreciation, which were retained by Cummins upon completion of Atmus’ IPO.

All transactions reflected in Net Parent Investment in the historical Consolidated Balance Sheets have been considered cash receipts and payments for purposes of the Consolidated Statements of Cash Flows and are reflected in financing activities in the accompanying Consolidated Statements of Cash Flows with the exception of certain non-cash items related to an unrecognized tax liability for FIN48 reserves and leased assets and related depreciation, which were retained by Cummins upon completion of Atmus’ IPO.

These items have been included as supplemental information to the Consolidated Statements of Cash Flows.

Recent Accounting Pronouncements Net Yet Adopted

Recent Accounting Pronouncements

Segment Reporting (Topic 280):

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A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows and financial condition.

We adopted this standard in the fourth quarter of 2024 and it did not have a material impact on our disclosures and no impacts to our results of operations, cash flows and financial condition.

Income Taxes (Topic 740):

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We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows and financial condition.

Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement

Expenses, which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements.

The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The guidance is to be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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Revenue by Major Customer

Related party sales to Cummins represented 17.4 % of net sales in 2023 ($ 282.5 million), 19.3 % of net sales in 2022 ($ 302.2 million) and 18.5 % of net sales in 2021 ($ 266.8 million).

For the years ended December 31, 2023, 2022 and 2021, two external customers, PACCAR and the Traton Group, each represented greater than 10% of our annual net sales.

For the years ended December 31, 2024, 2023 and 2022, three external customers, Cummins, PACCAR and the Traton Group, each represented greater than 10% of our annual net sales.

These customers represented 17.6 % , 16.5 % and 12.2 % of net sales in 2024, 17.4 %, 15.6 % and 11.8 % of net sales in 2023 and 19.3 %, 16.2 % and 12.0 % of net sales in 2022.

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Shanghai Fleetguard Filter Co.

$ 5.9 $ 5.3 $ 10.2

Ltd $ 5.9 $ 5.9 $ 5.3

Fleetguard Filters Pvt.

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Filtrum Fibretechnologies Pvt.

$ 0.2 $ 0.3 $ 0.2

Ltd 0.4 0.2 0.3

Atmus share of net income $ 28.1 $ 27.6 $ 22.7

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Effective tax rate 21.0 % 24.3 % 19.6 %

Our effective tax rate for 2023 was 24.3 percent compared to 19.6 percent for 2022 and 21.5 percent for 2021.

The increase in our effective tax rate was primarily due to changes in the mix of our income before income taxes between the U.S.

and foreign countries.

Our effective tax rate for 2024 was 21.0 %, compared to 24.3 % for 2023 and 19.6 % for 2022.

The decrease in the effective tax rate was driven by a favorable change in the mix of earnings among tax jurisdictions and discrete tax items related to US and foreign tax return filings.

At December 31, 2024 , $ 199.5 million of non-U.S.

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Deferred tax assets

Employee benefit plans

Foreign carryforward benefits 8.6 5.6

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Net deferred tax assets

Our foreign carryforward benef its as of December 31, 2023 may be carried forward indefinitely, subject to certain utilization limitations.

$ 16.9 $ 12.8

Our foreign carryforward benefits as of December 31, 2024 may be carried forward indefinitely, subject to certain utilization limitations.

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 is primarily attributable to the uncertainty regarding the realization of foreign net operating los s carryforward benefits.

The valuation allowance is primarily attributable to the uncertainty regarding the realization of foreign net operating loss, foreign currency loss and foreign tax credits.

A reconciliation of the valuation allowance for the years ended December 31, 2024, 2023 and 2022 was as follows:

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Other liabilities

One-time transition tax $ — $ 0.7

Deferred income tax liabilities $ 1.4 $ 1.4

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The total amount of unrecognized tax benefits in 2024, 2023 and 2022, if recognized, would favorably impact the effective tax rate in future periods.

We have accr ued interest expense related to the unrecognized tax benefits of zero , $ 7.0 million and $ 5.0 million as of December 31, 2023, 2022 and 2021, respectively.

We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense.

We have accr ued interest expense related to the unrecognized tax benefits of $ 0 million, $ 0 million and $ 7.0 million as of December 31, 2024, 2023 and 2022, respectively.

We recognize potential accrued int erest 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.

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.

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Our operating lease cost was $ 15.7 million, $ 10.5 million, and $ 10.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Our finance lease cost, short-term lease cost and variable lease cost were immaterial for the years ended December 31, 2023, 2022 and 2021.

Our variable lease cost was $ 1.0 million for the year ended December 31, 2024 and was immaterial for the years December 31, 2023 and 2022.

Our finance lease cost and short-term lease cost were immaterial for the years ended December 31, 2024, 2023 and 2022.

Supplemental balance sheet information related to leases:

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2025 $ 0.6 $ 13.1

2026 0.5 12.0

After 2029 — 1.4

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Total $ 12.2 $ 14.0

Fuel Heater Campaign Accrual

Quality issues were identified with a particular application of a fuel heater which primarily impacted one customer, resulting in a recall campaign.

A total of $ 24.2 million was a ccrued for this campaign during 2020 and 2019.

The remaining accrual balance at December 31, 2023 w as $ 3.0 million.

DEBT AND BORROWING ARRANGEMENTS

Atmus entered into the Credit Agreement with Cummins and a syndicate of banks, providing for a term loan and a revolving credit facility, in anticipation of the Separation.

Atmus entered into the Credit Agreement with a syndicate of banks, providing for a term loan and a revolving credit facility, in anticipation of the Separation.

Borrowings under the Credit Agreement did not become available under the Credit Agreement until the IPO occurred.

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Generally, U.S.

dollar-denominated loans bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”) (which includes a 0.10 percent credit spread adjustment to SOFR) for the applicable interest period plus a rate ranging from 1.125 percent to 1.75 percent depending on Atmus’ net leverage ratio.

dollar-denominated loans bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”) (which

includes a 0.10 percent credit spread adjustment to SOFR) for the applicable interest period plus a rate ranging from 1.125 percent to 1.75 percent depending on Atmus’ net leverage ratio.

As of December 31, 2024, $ 592.5 million has been drawn on the term loan and no amount was drawn on the revolving credit facility.

The revolving credit facility includes an allowance of up to $ 50.0 million for outstanding letters of credit drawn under the facility that reduces the availability of funds.

As of December 31, 2024, no letters of credit were outstanding.

These amounts are included within Long-term debt and Current maturities of long-term debt on the Balance Sheet.

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Our credit lines available as of December 31, 2024 and December 31, 2023 include:

As of December 31, 2023 As of December 31, 2022

As of December 31, 2024

As of December 31, 2023

Facility Amount Borrowed Amount Facility Amount Borrowed Amount

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Credit facilities:

Term loan September 30, 2027 (1)

September 30, 2027 (1)

$ 600.0 $ 592.5 $ 600.0 $ 600.0

Revolving credit facility September 30, 2027 (1)

Revolving credit facility

September 30, 2027 (1)

400.0 — 400.0 —

(1) Atmus maintains a term loan facility and a revolving credit facility as part of the Credit Agreement.

The Credit Agreement includes financial covenants that Atmus maintain certain net leverage, secured net leverage and interest coverage ratios.

At December 31, 2023, Atmus complied with all financial covenants.

At December 31, 2024, Atmus was in compliance with all financial covenants under the Credit Agreement.

The Credit Agreement also contains customary representations, events of default and covenants, including restrictions on the level of borrowing.

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Pension Plans

Multiemployer Plans with Cummins

Cummins offers various retirement benefits (“Cummins Plans”) to its eligible employees which includes eligible employees of Atmus, both in the U.S.

and foreign countries.

Since Cummins provides these benefits to eligible employees and retirees of Atmus, the costs to participating employees of Atmus in these plans are reflected in the Consolidated Financial Statements, while the related assets and liabilities are retained by Cummins.

The total Cummins defined benefit pension plan service costs allocated to Atmus were $ 5.7 million, $ 5.8 million and $ 6.8 million in 2023, 2022 and 2021, respectively.

These costs are reflected in the Consolidated Financial Statements as a component of Cost of sales, Research, development and engineering expenses and Selling, general and administrative expenses.

The non-service benefit allocated to Atmus was $ 3.4 million, $ 3.4 million and $ 2.7 million in 2023, 2022 and 2021, respectively.

The non-service benefit is reflected as a component of Other income, net.

The following is a listing of significant defined benefit pension plans sponsored by Cummins in which eligible Atmus employees and retirees participate:

Country Name of Defined Benefit Plan(s)

Mexico Pension Plan, Seniority Premium, Termination Indemnity(a)

United Kingdom Cummins UK Pension Plan

United States The Cummins Pension Plan

Excess Benefit Retirement Plan

Postretirement Health Care and Life Insurance Plans

Atmus has defined benefit pension plans, which provide retirement benefits to eligible participants and are collectively referred to as the “Atmus Plans.” The plans’ benefits are primarily based on employee earnings and credited service.

Plans in two countries, Belgium and Mexico, were newly established in 2023.

Prior to the establishment of the plans in Belgium and Mexico, Filtration employees’ participated in the Cummins' plans.

The total Atmus Plans’ defined benefit pension plan expenses were $ 1.7 million in 2024, $ 0.9 million in 2023 and $ 2.0 million in 2022.

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The non-service costs allocated to Atmus were immaterial for each of the years ended December 31, 2024, 2023 and 2022.

These non-service costs are reflected as a component of Other income, net.

The total Atmus Plans’ defined benefit pension plan liabilities were $ 9.6 million and $ 7.3 million as of December 31, 2023 and 2022, respectively.

These liabilities are reflected in the Consolidated Financial Statements as a component of Other liabilities.

These non-service costs are reflected in the Consolidated Financial Statements as a component of Other income, net.

The aggregate status of all over funded plans is recognized as an asset and the aggregate status of all underfunded plans is recognized as a liability in the Consolidated Balance Sheets.

The liabilities were $ 11.0 million and $ 9.6 million as of December 31, 2024 and 2023, respectively, and are reflected in the Consolidated Financial Statements as a component of Other liabilities.

The current portion of the liabilities were immaterial as of December 31, 2024 and 2023.

The amounts recognized as assets were $ 2.1 million and $ 0 million as of December 31, 2024 and 2023, respectively, and are reflected in the Consolidated Financial Statements as a component of Other assets.

The following is a listing of significant Atmus Plans:

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Japan Employee Retirement Allowance Plan

Mexico Pension Plan, Seniority Premium, Termination Indemnity (a)

(a) New plans have been established in Mexico, but for a period of time, certain Atmus employees will continue to participate in the Cummins' plans until they are transferred into the new Atmus plans.

Mexico Pension Plan, Seniority Premium, Termination Indemnity

COMMITMENTS AND CONTINGENCIES

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T he Company is subject to lawsuits and claims arising out of the ordinary course of its business.

The Company does not have any currently pending claims or litigation that the Company believes, individually or in

the aggregate, will have a material adverse effect on its financial position, results of operations, cash flows, liquidity or capital resources.

The Company does not have any currently pending claims or litigation that the Company believes, individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, cash flows, liquidity or capital resources.

Atmus carries various forms of commercial, property and casualty, product liability and other forms of insurance;

Where Atmus has not obtained its own insurance policies, it will continue to be covered under Cummins’ insurance policies while Atmus continues to be majority owned by Cummins;

however, such insurance may not be applicable or adequate to cover the costs associated with a judgment against Atmus with respect to these lawsuits, claims and proceedings.

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Currency translation adjustments ( 23.3 ) 0.6 ( 16.6 )

Other comprehensive income (loss), net $ 0.6 $ ( 16.6 ) $ ( 12.0 )

Other comprehensive (loss) income, net

( 23.3 ) 0.6 ( 16.6 )

Balance at end of period ( 79.4 ) ( 56.1 ) ( 56.7 )

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Change in pensions and other benefit plans 0.6 ( 1.5 ) 3.1

Tax benefit (expense) $ 0.5 $ ( 0.7 ) $ ( 0.3 )

Other comprehensive (loss) income, net $ ( 1.0 ) $ 2.4 $ 0.7

Tax (expense) benefit

( 0.1 ) 0.5 ( 0.7 )

Other comprehensive income (loss), net

0.5 ( 1.0 ) 2.4

Balance at end of period 0.4 ( 0.1 ) 0.9

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Balance at end of period $ ( 79.0 ) $ ( 56.2 ) $ ( 55.8 )

RELATIONSHIP WITH PARENT AND RELATED PARTIES

As described in Note 1, Description of the Business , prior to the IPO, Atmus had been managed and operated in the normal course of business with other subsidiaries of Cummins.

SHARE REPURCHASE PROGRAM

Effective July 17, 2024, Atmus’ Board of Directors authorized a $ 150.0 million share repurchase program.

The program does not have an expiration date and may be suspended or discontinued at any time.

Repurchases under the program are determined by management and are wholly discretionary.

Since inception of the program, the Company repurchased approximately 0.5 million shares of common stock at an average cost of $ 37.22 per share, or an aggregate cost of approximately $ 20.0 million, all of which was paid during the period.

All share repurchases were funded through available cash on hand.

As of December 31, 2024, the Company had approximately $ 130.0 million in remaining share repurchase capacity.

RELATIONSHIP WITH RELATED PARTIES

As described in Note 1, Description of the Business , Atmus had been managed and operated in the normal course of business with other subsidiaries of Cummins until March 18, 2024, when the Full Separation was completed.

Accordingly, certain shared costs prior to the IPO have been allocated to Atmus and reflected as expenses in the Consolidated Financial Statements.

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In addition, the expenses reflected in the Consolidated Financial Statements may not be indicative of expenses that will be incurred in the future by Atmus.

The Company entered into the separation agreement and transition services agreement with Cummins, among other transaction agreements, all of which will govern the parties relationship following the IPO.

This includes services provided by Cummins to the Company for a fixed term on a service-by-service basis.

This relationship includes services provided by Cummins to the Company for a fixed term on a service-by-service basis.

We will pay Cummins mutually agreed-upon fees for the services provided under the transition services agreement.

The fees paid to Cummins may not be indicative of costs for the same services provided by another provider.

Corporate Costs/Allocations

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The costs that were directly charged to Atmus, such as the shared services for finance provided by Cummins Business Services, were primarily determined based on actual usage.

Indirect allocations are related to shared services and infrastructure provided by Cummins that would benefit Atmus but have not been directly charged to Atmus in a manner discussed above.

Indirect allocations are related to shared services and infrastructure provided by Cummins that would benefit Atmus but were not directly charged to Atmus in a manner discussed above.

These corporate costs were allocated to Atmus using methods management believes are consistent and reasonable.

The primary allocation factor is third-party revenue;

however, other relevant metrics are also utilized based on the nature of the underlying activities.

The primary allocation factor was third-party revenue;

however, other relevant metrics were also utilized based on the nature of the underlying activities.

For example, headcount is used as the allocation driver to allocate the human resource departmental costs.

The expenses allocated and directly charged reflect all expenses that Cummins incurred on behalf of the Company.

The expenses reflected in the Consolidated Financial Statements may not be indicative of the actual expenses that would have been incurred during the period presented if Atmus historically operated as a separate, stand-alone entity.

The expenses reflected in the Consolidated Financial Statements prior to the IPO may not be indicative of the actual expenses that would have been incurred during the period presented if Atmus historically operated as a separate, stand-alone entity.

All corporate charges and allocations have been deemed paid by Atmus to Cummins in the period in which the cost was recognized in the Consolidated Statements of Income.

Prior to the separation Cummins used a centralized approach to cash management and financing of its operations, including our operations.

Accordingly, we transferred all of our cash to Cummins to be utilized in the central cash management program and as a result do not have cash allocated to us in the consolidated financial statements in 2022 and 2021.

Total corporate costs allocated t o Atmus wer e $ 0 million , $ 13.7 million and $ 45.0 million fo r the years ended December 31, 2024, 2023 and 2022, respectively.

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Related Party Balances

Atmus had trade receivables of $ 37.9 million and $ 52.0 million for products sold to, and accounts payable of $ 54.8 million and $ 57.6 million for products and services purchased in the ordinary course from Cummins as of December 31, 2023 and December 31, 2022, respectively.

Atmus’ sales to Cummins were $ 282.5 million, $ 302.2 million and $ 266.8 million for the years ended December 31, 2023, 2022 and 2021 , respectively.

Following the full separation, Cummins is no longer considered a related party.

Atmus had trade receivables of $ 37.9 million for products sold to, and accounts payable of $ 54.8 million for products and services purchased in the ordinary course from Cummins as of December 31, 2023.

Atmus’ sales to Cummins from January 1, 2024 through the date of full separation, March 18, 2024, were $ 65.4 million compared to $ 282.5 million and $ 302.2 million for the years ended December 31, 2023 and 2022 , respectively.

STOCK-BASED COMPENSATION

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Restricted Stock Units and Performance Share Units

Atmus recorded compensation expense related to RSUs and PSUs of $ 5.5 million during the year ended December 31, 2023 and zero during the years ended December 31, 2022 and 2021, respectively .

During the years ended December 31, 2024, 2023, and 2022, Atmus recognized compensation expense related to RSUs and PSUs, as a component of Selling, general, and administrative expense, in its Consolidated Statements of Income of $ 11.9 million, $ 5.5 million, and $ 0 million, respectively.

The unamortized compensation expense related to Atmus RSUs and PSUs was $ 18.8 million and is expected to be recognized over a weighted-average period of 1.6 years.

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Balance at January 1, 2023

Granted 763,480 Various 28.34 $ 21.6 million

Granted 763,480 Various

28.34 $ 21.6 million

Forfeited — —

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763,480 $ 28.34

Granted 391,385 Various

36.78 $ 14.4 million

Vested ( 52,894 ) 28.03 $ 1.5 million

Forfeited ( 80,774 ) 31.40

Balance at December 31, 2024 1,021,197 $ 31.35

EARNINGS PER SHARE

Basic net earnings per share (“EPS”) is computed by dividing net earnings by the weighted average number of outstanding common shares.

Diluted net EPS is computed by dividing net earnings by the weighted average number of outstanding common shares and common share equivalents relating to stock options and other stock incentive plans.

Diluted net EPS reflects the increase in weighted average common shares outstanding that would result from the assumed exercise of outstanding stock incentive plan awards calculated using the treasury stock method.

Basic and diluted EPS were calculated as follows:

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Diluted earnings per share $ 2.22 $ 2.05 $ 2.05

Basic and diluted EPS for the years ended December 31, 2022 and 2021 were calculated using the shares of common stock that were issued and outstanding as of the completion of the IPO.

Basic and diluted EPS for the year ended December 31, 2022 was calculated using the shares of common stock that were issued and outstanding as of the completion of the IPO.

For the periods prior to the IPO, it is assumed that there were no dilutive equity instruments as there were no equity awards of Atmus outstanding prior to the IPO.

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Other assets $ 79.5 $ 51.5

Geographic data for long-lived assets, excluding deferred taxes, goodwill, intangible assets and equity method investments, included the following:

2024 December 31,

(in millions)

United States $ 103.5 $ 87.4

Mexico 42.6 34.9

France 25.9 28.8

Korea 25.6 28.6

Other international 25.8 19.7

Long-lived assets $ 223.4 $ 199.4

Other accrued expenses included the following:

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Other taxes payables 14.9 12.7

Income taxes payable 10.3 6.0

Current portion of operating lease liabilities

Income taxes payable 6.8 10.3

Current portion of finance lease liabilities 0.5 0.3

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Other liabilities $ 40.7 $ 31.8

(1) Balances at December 31, 2022 included an unrecognized tax liability for FIN48 reserves and leased assets and related depreciation, which have been retained by Cummins upon completion of Atmus’ IPO and are no longer included on Atmus’ Consolidated Balance Sheets at December 31, 2023.

See Note 1, Description of the Business , and in Note 2, Basis of Presentation for more information.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data