Cummins reaches agreement in principle to settle regulatory proceedings regarding its emissions certification and compliance process for pick-up truck applications
22 Dezembro 2023 - 9:30AM
Business Wire
Cummins Inc (NYSE: CMI) has reached an agreement in principle
to resolve U.S. regulatory claims regarding its emissions
certification and compliance process for certain engines primarily
used in pick-up truck applications. The company has cooperated
fully with the relevant regulators, already addressed many of the
issues involved, and looks forward to obtaining certainty as it
concludes this lengthy matter. Cummins conducted an extensive
internal review and worked collaboratively with the regulators for
more than four years. The company has seen no evidence that anyone
acted in bad faith and does not admit wrongdoing.
The governmental entities involved are the U.S. Environmental
Protection Agency (EPA), the California Air Resources Board (CARB),
the Environment and Natural Resources Division of the Department of
Justice (DOJ), and the California Attorney General’s Office.
Cummins disclosed a review of these matters when it began in
2019 and has regularly updated its disclosures as that review
progressed. The company has already recalled model year 2019 RAM
2500 and 3500 trucks and has initiated a recall of model years 2013
through 2018 RAM 2500 and 3500 trucks and previously accrued a
total of $59 million for the estimated costs for executing these
and other related recalls.
Cummins expects to record a charge of approximately $2.04
billion in the fourth quarter of 2023 to resolve these and other
related matters involving approximately one million pick-up truck
applications in the United States. Of this amount, approximately
$1.93 billion relates to payments that are expected to be made in
the first half of 2024. The balance reflects our best estimate of
related expenses that will impact cash flow in future periods. The
company is in a strong financial position with existing liquidity
and access to capital to satisfy obligations associated with the
settlements, support ongoing operations, and execute its growth
strategy.
The settlements are subject to final regulatory and judicial
approvals.
About Cummins Inc.
Cummins Inc., a global power leader, is a corporation of
complementary business segments that design, manufacture,
distribute and service a broad portfolio of power solutions. The
company’s products range from diesel, natural gas, electric and
hybrid powertrains and powertrain-related components including
filtration, aftertreatment, turbochargers, fuel systems, controls
systems, air handling systems, automated transmissions, axles,
drivelines, brakes, suspension systems, electric power generation
systems, batteries, electrified power systems, electric
powertrains, hydrogen production and fuel cell products.
Headquartered in Columbus, Indiana (U.S.), since its founding in
1919, Cummins employs approximately 73,600 people committed to
powering a more prosperous world through three global corporate
responsibility priorities critical to healthy communities:
education, environment and equality of opportunity. Cummins serves
its customers online, through a network of company-owned and
independent distributor locations, and through thousands of dealer
locations worldwide and earned about $2.2 billion on sales of $28.1
billion in 2022. See how Cummins is powering a world that's always
on by accessing news releases and more information at
https://www.cummins.com.
Forward-looking disclosure statement
Information provided in this release that is not purely
historical are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements regarding our forecasts, guidance, preliminary results,
expectations, hopes, beliefs and intentions on strategies regarding
the future. These forward-looking statements include, without
limitation, statements relating to our agreement in principle to
settle regulatory proceedings regarding our emissions certification
and compliance process for pick-up truck applications. Our actual
future results could differ materially from those projected in such
forward-looking statements because of a number of factors,
including, but not limited to: any adverse consequences resulting
from entering into the Agreement in Principle, 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; changes in international, national and regional trade laws,
regulations and policies; changes in taxation; global legal and
ethical compliance costs and risks; evolving environmental and
climate change legislation and regulatory initiatives; future bans
or limitations on the use of diesel-powered products; failure to
successfully integrate and / or failure to fully realize all of the
anticipated benefits of the acquisition of Meritor, Inc.; raw
material, transportation and labor price fluctuations and supply
shortages; any adverse effects of the conflict between Russia and
Ukraine and the global response (including government bans or
restrictions on doing business in Russia); 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; 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; uncertainties and risks related to timing and
potential value to both Atmus Filtration Technologies Inc. (Atmus)
and Cummins of the planned final separation of Atmus, including
business, industry and market risks, as well as the risks involving
the anticipated favorable tax treatment if there is a significant
delay in the completion of the envisioned final separation; our
plan to reposition our portfolio of product offerings through
exploration of strategic acquisitions and divestitures and related
uncertainties of entering such transactions; increasing interest
rates; challenging markets for talent and ability to attract,
develop and retain key personnel; climate change, global warming,
more stringent climate change regulations, accords, mitigation
efforts, greenhouse gas regulations or other legislation designed
to address climate change; exposure to potential security breaches
or other disruptions to our information technology environment and
data security; political, economic and other risks from operations
in numerous countries including political, economic and social
uncertainty and the evolving globalization of our business;
competitor activity; increasing competition, including increased
global competition among our customers in emerging markets; failure
to meet environmental, social and governance (ESG) expectations or
standards, or achieve our ESG goals; labor relations or work
stoppages; foreign currency exchange rate changes; the performance
of our pension plan assets and volatility of discount rates; the
price and availability of energy; continued availability of
financing, financial instruments and financial resources in the
amounts, at the times and on the terms required to support our
future business; and other risks detailed from time to time in our
SEC filings, including particularly in the Risk Factors section of
our 2022 Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. 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 release
and we undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise. More detailed information about factors
that may affect our performance may be found in our filings with
the SEC, which are available at http://www.sec.gov or at
http://www.cummins.com in the Investor Relations section of our
website.
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version on businesswire.com: https://www.businesswire.com/news/home/20231222121251/en/
Jon Mills – Director, External Communications 317-658-4540
jon.mills@cummins.com
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