Summary
Cummins Inc. (CMI) announced on December 22, 2023, that it has reached an agreement in principle with the U.S. Environmental Protection Agency, the California Air Resources Board (CARB), and other governmental bodies to resolve civil claims related to its emissions certification and compliance processes for certain engines, primarily used in pick-up truck applications in the United States. This agreement addresses issues that have been under formal review since April 2019. As a result of this agreement, Cummins expects to record a significant charge of approximately $2.04 billion in the fourth quarter of 2023. The company emphasizes its strong financial position, with existing liquidity and access to capital, to manage this obligation and continue executing its growth strategy. The settlement is contingent upon regulatory and judicial approvals.
Key Highlights
- 1Agreement in principle reached with EPA, CARB, and other governmental bodies to resolve civil claims regarding emissions certification and compliance.
- 2Claims primarily relate to engines used in pick-up truck applications in the United States.
- 3Expects to record a charge of approximately $2.04 billion in Q4 2023 to resolve these matters.
- 4Company states it is in a strong financial position with adequate liquidity and access to capital to meet obligations.
- 5The settlement is subject to regulatory and judicial approvals.
- 6Cummins continues to cooperate with Environment and Climate Change Canada on similar certification-related information.