Cummins (CMI) risk factors: FY2025 10-K

1. Our products are subject to extensive and evolving statutory and regulatory requirements that can significantly increase our costs and, along with increased scrutiny from regulatory agencies and unpredictability in the adoption, implementation and enforcement of increasingly stringent and fragmented emission standards by multiple jurisdictions around the world, could have a material adverse impact on our results of operations, financial condition and cash flows.reworded
2. Evolving 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.
3. We 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 position.newTariffs
4. We 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.
5. Deregulation could impair our investments in future products and negatively impact our long-term growth and competitiveness.new
6. Unanticipated changes in our effective tax rate, the adoption of new tax legislation or exposure to additional income tax liabilities could adversely affect our profitability.
7. Our global operations are subject to laws and regulations that impose significant compliance costs and create reputational and legal risk.
8. Future bans or limitations on the use of diesel-powered vehicles or other applications could have a material adverse impact on our business over the long term.

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1. We 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.
2. We face the challenge of accurately aligning our capacity with our demand.
3. We derive significant earnings from investees that we do not directly control, with more than 50 percent of these earnings from our China-based investees.China
4. Our 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.

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1. Our products are subject to recall for performance or safety-related issues.
2. Our products are exposed to variability in material and commodity costs.
3. The 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 transition.reworded
4. Lower-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.
5. Our business is exposed to potential product liability claims.
6. We 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.
7. Our 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 risks.
8. Our business and operations are subject to interest rate risks, and changes in interest rates can reduce demand for our products and increase borrowing costs and result in non-cash chargesInterest rates
9. We operate in challenging markets for talent and may fail to attract, develop and retain key personnel.
10. Our 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.Cybersecurity
11. We 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 operations.rewordedAI
12. We are exposed to political, economic and other risks that arise from operating a multinational business. Greater political, economic and social uncertainty, among, between and within countries, and the evolving globalization of businesses could significantly change the dynamics of our competition, customer base and product offerings and impact our growth globally.reworded
13. We face significant competition in the regions we serve.
14. Increasing global competition among our customers may affect our existing customer relationships and restrict our ability to benefit from some of our customers' growth.
15. Failure to meet sustainability expectations or standards, or to achieve our sustainability goals, could adversely affect our business, results of operations and financial condition.
16. We may be adversely impacted by work stoppages and other labor matters.
17. We are subject to foreign currency exchange rate and other related risks.
18. Significant 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.
19. We are exposed to risks arising from the price and availability of energy.

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