Item 9A. Controls and Procedures
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, 2023, 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
(a) On February 12, 2024, the Talent Management and Compensation Committee (TMCC) of the Company's Board of Directors adopted a Deposit Share Program for 2024 (2024 Program) under which designated participants, including certain of the Company’s named executive officers, will be eligible to receive matching grants of restricted stock units if they commit newly acquired shares of the Company’s common stock within a designated range to the 2024 Program and agree to hold those newly acquired shares for four years. The 2024 Program replaces the previously disclosed Deposit Share Program that was adopted in 2023 but not implemented.
In the 2024 Program, the number of newly acquired shares in the designated range will be based on percentages of the participants’ base salaries approved by the TMCC, divided by the average closing price per share of the Company’s common stock over a 20 trading day period. The shares may be acquired in open market purchases or under certain equity compensation awards. The matching grants of restricted stock units will cliff vest on the fourth anniversary of the participation deadline if the participant has remained continuously employed and has satisfied the holding requirement for the newly acquired shares.
The purposes of the 2024 Program include encouraging long-term retention and continuity and alignment of interests with the Company’s shareholders. The named executive officers who are eligible to participate in the 2024 Program include Jennifer W. Rumsey, Chair and Chief Executive Officer, and Mark Smith, Vice President and Chief Financial Officer, with designated ranges for newly acquired shares and matching restricted stock units of 100 percent-200 percent and 75 percent-150 percent, respectively, of base salary.
The preceding description is a summary only and is qualified in its entirety by the 2024 Program, which is filed as Exhibit 10(y) to this Annual Report on Form 10-K and incorporated herein by reference.
(b) During the fourth quarter of 2023, 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.
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PART III
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 2024 Proxy Statement, which will be filed within 120 days after the end of 2023. 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 2024 Proxy Statement, which will be filed within 120 days after the end of 2023.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information concerning our equity compensation plans at December 31, 2023, was as follows:
Plan Category Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights (1)
Weighted-average
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 2,612,273 $ 146.89 4,010,884
(1) The number is comprised of 1,814,420 stock options, 487,513 performance shares and 310,340 restricted shares. See Note 19, "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 1,814,420 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 2024 Proxy Statement, which will be filed within 120 days after the end of 2023.
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 2024 Proxy Statement, which will be filed within 120 days after the end of 2023.
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 2024 Proxy Statement, which will be filed within 120 days after the end of 2023.
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PART IV
ITEM 15. Exhibits and Financial Statement Schedules
(a) 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, 2023, 2022 and 2021
• Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
• Consolidated Balance Sheets at December 31, 2023 and 2022
• Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021
• Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Equity for the years ended December 31, 2023, 2022 and 2021
• Notes to the Consolidated Financial Statements
(b) 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.
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(c) 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
2
(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)).
3
(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)) .
3
(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)).
4
(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)).
4
( 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)).
4
( 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)).
4
( 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)).
4
( 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)).
4
( 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)).
10
(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)).
10
(b)#
Amendment to the Cummins Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10(c) to Cummins Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-04949)).
10
(c)#
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)).
10
(d)#
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)).
10
(e)#
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)).
10
(f)#
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)).
10
(g)#
Cummins Inc. Employee Stock Purchase Plan, as amended (incorporated by reference to Annex B to th e Company's definitive proxy statement filed with the Securities and Exchange Commission on Schedule 14A on March 27, 2023 (File No. 001-04949)).
10
(h)#
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)).
10
(i)#
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)).
10
(j)#
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)).
10
(k)#
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)).
10
(l)#
Form of Long-Term Grant Notice under the 2012 Omnibus Incentive Plan (filed herewith).
10
(m)#
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)).
10
(n)#
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)).
10
(o)#
Form of Restricted Stock Unit Award Agreement under the 2012 Omnibus Incentive Plan (filed herewith).
10
(p)#
Key Employee Stock Investment Plan (incorporated by reference to Exhibit 10 to Cummins Inc.'s Quarterly Report on Form 10- Q for the quarter ended September 30 , 202 3 (File No. 001-04949)).
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10
(q)
Fifth Amended and Restated 364-Day Credit Agreement, dated as of June 5, 2023, 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 7 , 202 3 (File No. 001-04949)).
10
(r)
Amended and Restated Credit Agreement, dated as of August 18, 2021, by and among Cummins Inc., the subsidiary borrowers referred to therein, the Lenders and Agents 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 August 18, 2021 (File No. 001-04949)).
10
( s )
Amendment No. 1 to Amended and Restated Credit Agreement, dated as of August 17, 2022, 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 10.3 to the Current Report on Form 8-K filed by Cummins Inc. with the Securities and Exchange Commission on August 19, 2022 (File No.001-04949)).
10
( t )#
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)).
10
( u )
Loan Agreement, dated as of July 13, 2022, by and among Cummins Inc., the lenders from time to time party thereto, and Wells Fargo Bank, National Association, 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 July 19, 2022 (File No. 001-04949)).
10
(v)
Credit Agreement, dated as of September 30, 2022, among FILT Red, Inc., Cummins Filtration Inc., the lenders party thereto, and Bank of America, 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 September 30, 2022 (File No.001-04949)).
10
( w )
Amendment No. 1 to Credit Agreement, dated as of February 15, 2023, among Atmus Filtration Technologies Inc., Cummins Filtration Inc, the lenders party thereto, and Bank of America, 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 February 15, 2023 (File No. 001-04949)).
10
( x )
Guaranty, dated as of September 30, 2022, by Cummins Inc. in favor of Bank of America, N.A., as administrative agent for the lenders party to the Credit Agreement. (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 September 30, 2022 (File No.001-04949)).
10
(y)#
Cummins Inc. Deposit Share Program, dated as of February 12, 2024 (filed herewith).
21
Subsidiaries of the Registrant (filed herewith).
23
Consent of PricewaterhouseCoopers LLP (filed herewith).
24
Powers of Attorney (filed herewith).
31
(a)
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31
(b)
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32
Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
97
Cummins Inc. Compensation Recovery Policy (filed herewith).
101 .INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101 .SCH* Inline XBRL Taxonomy Extension Schema Document.
101 .CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101 .DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.
101 .LAB* Inline XBRL Taxonomy Extension Label Linkbase Document.
101 .PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
_______________________________________________
# A management contract or compensatory plan or arrangement.
* Filed with this annual report on Form 10-K are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Net Income for the years ended December 31, 2023, 2022 and 2021, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021, (iii) the Consolidated Balance Sheets for the years ended December 31, 2023 and 2022, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021, (v) the Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Equity for the years ended December 31, 2023, 2022 and 2021, (vi) Notes to the Consolidated Financial Statements and (vii) the information included in Part II, Item 9B(b).
ITEM 16. Form 10-K Summary (optional)
Not Applicable.
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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:
February 12, 2024
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) February 12, 2024
Jennifer Rumsey
/s/ MARK A. SMITH Vice President and Chief Financial Officer
(Principal Financial Officer) February 12, 2024
Mark A. Smith
/s/ LUTHER E. PETERS Vice President—Corporate Controller
(Principal Accounting Officer) February 12, 2024
Luther E. Peters
* February 12, 2024
Gary L. Belske Director
* February 12, 2024
Robert J. Bernhard Director
* February 12, 2024
Bruno V. Di Leo Allen Director
* February 12, 2024
Stephen B. Dobbs Director
* February 12, 2024
Daniel W. Fisher Director
* February 12, 2024
Carla A. Harris Director
* February 12, 2024
Thomas J. Lynch Director
* February 12, 2024
William I. Miller Director
* February 12, 2024
Georgia R. Nelson Director
* February 12, 2024
Kimberly A. Nelson Director
* February 12, 2024
Karen H. Quintos Director
*By: /s/ MARK A. SMITH
Mark A. Smith
Attorney-in-fact
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