Cummins (CMI) risk factors, FY2025 10-K

Other

1. 01We have also been in communication with other non-U.S. regulators regarding matters related to the emission systems in our engines and may also become subject to additional regulatory review in connection with these matters
2. 02In connection with our announcement of our entry into the agreement in principle, we became subject to shareholder, consumer and third-party litigation regarding the matters covered by the Settlement Agreements, and we may become subject to additional litigation in connection with these matters
3. 03Evolving environmental and climate change legislation and regulatory initiatives may adversely impact our operations, could impact the competitive landscape within our markets and could negatively affect demand for our products
4. 04We operate our business on a global basis and changes in tariffs and other trade disruptions could adversely impact the demand for our products and our competitive positionNew
5. 05We operate our business on a global basis and changes in international, national and regional trade laws, regulations and policies affecting and/or restricting international trade could adversely impact the demand for our products and our competitive position
6. 06Deregulation could impair our investments in future products and negatively impact our long-term growth and competitivenessNew
7. 07Unanticipated changes in our effective tax rate, the adoption of new tax legislation or exposure to additional income tax liabilities could adversely affect our profitability
8. 08Our global operations are subject to laws and regulations that impose significant compliance costs and create reputational and legal risk
9. 09Future bans or limitations on the use of diesel-powered vehicles or other applications could have a material adverse impact on our business over the long term
10. 10We are vulnerable to raw material, transportation and labor price fluctuations and supply shortages, which impacted and could continue to impact our results of operations, financial condition and cash flows
11. 11We face the challenge of accurately aligning our capacity with our demand32% rewritten
12. 12We derive significant earnings from investees that we do not directly control, with more than 50 percent of these earnings from our China-based investees44% rewritten
13. 13Our truck manufacturers and OEM customers discontinuing outsourcing their engine supply needs, experiencing financial distress or experiencing a change-in-control of one of our large truck OEM customers, could have a material adverse impact on our results of operations, financial condition and cash flows
14. 14Our products are subject to recall for performance or safety-related issues
15. 15Our products are exposed to variability in material and commodity costs
16. 16The development of new technologies may materially reduce the demand for our current products and services, and we may not be successful in developing new technologies and products in order to effectively address the energy transition61% rewritten
17. 17Lower-than-anticipated market acceptance of our new or existing products or services could have a material adverse impact on our results of operations, financial condition and cash flows
18. 18Our business is exposed to potential product liability claims
19. 19We may be adversely impacted by the effects of climate change and may incur increased costs and experience other impacts due to new or more stringent climate change regulations, accords, mitigation efforts, GHG regulations or other legislation designed to address climate change
20. 20Our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions, divestitures or exiting the production of certain product lines or product categories may expose us to additional costs and risks44% rewritten
21. 21acquisition results in any additional goodwill or increase in other intangible assets on our balance sheet and subsequently becomes impaired, we would be required to record a non-cash impairment charge, which could result in a material adverse effect on our financial conditionNew
22. 22We operate in challenging markets for talent and may fail to attract, develop and retain key personnel
23. 23Our IT environment and our products are exposed to potential security breaches or other disruptions, which may adversely impact our competitive position, reputation, results of operations, financial condition and cash flows
24. 24We are using AI in our business and in our products, services and features, and challenges with properly managing its use could result in reputational harm, competitive harm and legal liability, and adversely affect our results of operations46% rewritten
25. 25We face significant competition in the regions we serve
26. 26Increasing global competition among our customers may affect our existing customer relationships and restrict our ability to benefit from some of our customers' growth
27. 27Failure to meet sustainability expectations or standards, or to achieve our sustainability goals, could adversely affect our business, results of operations and financial condition
28. 28We may be adversely impacted by work stoppages and other labor matters23% rewritten
29. 29We are subject to foreign currency exchange rate and other related risks
30. 30Significant declines in future financial and stock market conditions could diminish our pension plan asset performance and adversely impact our results of operations, financial condition and cash flow
31. 31We are exposed to risks arising from the price and availability of energy