Meritor Acquisition and 2022 Financial Results
Table of Contents
MANAGEMENT'S REPORT TO SHAREHOLDERS
Management's Report on Financial Statements and Practices
The accompanying Consolidated Financial Statements of Cummins Inc. were prepared by management, which is responsible for their integrity and objectivity. The statements
were prepared in accordance with generally accepted accounting principles and include amounts that are based on management's best judgments and estimates. The other
financial information included in the annual report is consistent with that in the financial statements.
Management also recognizes its responsibility for conducting our affairs according to the highest standards of personal and corporate conduct. This responsibility is
characterized and reflected in key policy statements issued from time to time regarding, among other things, conduct of its business activities within the laws of the host
countries in which we operate, within the Foreign Corrupt Practices Act and potentially conflicting interests of its employees. We maintain a systematic program to assess
compliance with these policies.
To comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we designed and implemented a structured and comprehensive compliance process to
evaluate our internal control over financial reporting across the enterprise.
Management's Report on Internal Control Over Financial Reporting
The management of Cummins Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of our Consolidated Financial Statements for external purposes
in accordance with accounting principles generally accepted in the United States of America.
On August 3, 2022, we completed the acquisition of Meritor. As part of our ongoing integration of the Meritor business, we are continuing to incorporate our controls and
procedures into Meritor and to augment our company-wide controls to reflect the risks inherent in an acquisition of this type. As permitted by the Securities and Exchange
Commission (SEC) staff guidance for newly acquired businesses, management's assessment of the effectiveness of our internal control over financial reporting for the year
ending December 31, 2022, excludes the acquired Meritor business in order for management to have sufficient time to evaluate and implement our internal control structure
over the operations of the Meritor business. Meritor is a wholly-owned subsidiary whose total assets and total net sales represent approximately 12 percent and 7 percent of our
consolidated financial statement amounts as of and for the year ended December 31, 2022.
Management assessed the effectiveness of our internal control over financial reporting and concluded it was effective as of December 31, 2022. In making its assessment,
management utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
The effectiveness of our internal control over financial reporting as of December 31, 2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their report which appears herein.
Officer Certifications
Please refer to Exhibits 31(a) and 31(b) attached to this report for certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.
/s/ JENNIFER RUMSEY
President and Chief Executive Officer
/s/ MARK A. SMITH
Vice President and Chief Financial Officer
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