Cummins Inc 10-Q for FY2026 Q2

Cummins Inc (CMI)

10-Q 2026-08-04 For: 2026-06-30

Added on August 04, 2026

About this 10-Q

Cummins Inc filed this 10-Q on August 4, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).

Headline figures

Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $9.46B; up 9.4% from $8.64B a year earlier
Net income: $968M; up 4.3% from net income of $928M a year earlier
Diluted EPS: $6.73; up 4.7% from $6.43 a year earlier

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Indiana						35-0257090
(State of Incorporation)						(IRS Employer Identification No.)


		Page
	PART I. FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Net Income for the three and six months ended June 30, 2026 and 2025	3
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025	4

	Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	6
	Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2026 and 2025	7
	Notes to Condensed Consolidated Financial Statements	9
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	51
ITEM 4.	Controls and Procedures	51
	PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	52
ITEM 1A.	Risk Factors	52
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
ITEM 3.	Defaults Upon Senior Securities	52
ITEM 4.	Mine Safety Disclosures	52
ITEM 5.	Other Information	52
ITEM 6.	Exhibits	53
	Signatures	54



	Three months ended				Six months ended
	June 30,				June 30,
In millions, except per share amounts	2026		2025		2026		2025
NET SALES (Notes 1 and 2)	$	9,457	$	8,643	$	17,855	$	16,817
Cost of sales	6,992		6,362		13,147		12,381
GROSS MARGIN	2,465		2,281		4,708		4,436

OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses	893		779		1,738		1,550
Research, development and engineering expenses	385		357		743		701
Equity, royalty and interest income from investees (Note 4)	154		118		302		249



Other operating expense, net (Note 14)	62		37		301		74
OPERATING INCOME	1,279		1,226		2,228		2,360


Interest expense	80		87		156		164
Other income, net	94		86		155		146
INCOME BEFORE INCOME TAXES	1,293		1,225		2,227		2,342

Income tax expense (Note 5)	325		297		579		564
CONSOLIDATED NET INCOME	968		928		1,648		1,778

Less: Net income attributable to noncontrolling interests	36		38		62		64
NET INCOME ATTRIBUTABLE TO CUMMINS INC.	$	932	$	890	$	1,586	$	1,714

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic	$	6.76	$	6.46	$	11.48	$	12.45
Diluted	$	6.73	$	6.43	$	11.44	$	12.38

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
Basic	137.9		137.8		138.1		137.7
Dilutive effect of stock compensation awards	0.6		0.7		0.5		0.7
Diluted	138.5		138.5		138.6		138.4



	Three months ended				Six months ended
	June 30,				June 30,
In millions	2026		2025		2026		2025
CONSOLIDATED NET INCOME	$	968	$	928	$	1,648	$	1,778
Other comprehensive income (loss), net of tax (Note 12)
Change in pension and other postretirement defined benefit plans	8		7		(7)		(20)
Foreign currency translation adjustments	23		197		(86)		314

Unrealized gain (loss) on derivatives	8		(3)		5		(12)
Total other comprehensive income (loss), net of tax	39		201		(88)		282
COMPREHENSIVE INCOME	1,007		1,129		1,560		2,060
Less: Comprehensive income attributable to noncontrolling interests	38		40		36		68
COMPREHENSIVE INCOME ATTRIBUTABLE TO CUMMINS INC.	$	969	$	1,089	$	1,524	$	1,992


In millions, except par value	June 30, 2026		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	3,179	$	2,845

Marketable securities (Note 6)	745		764
Total cash, cash equivalents and marketable securities	3,924		3,609
Accounts and notes receivable, net	6,585		5,818


Inventories (Note 7)	6,397		5,822
Prepaid expenses and other current assets	1,528		1,676
Total current assets	18,434		16,925
Long-term assets
Property, plant and equipment	13,236		12,919
Accumulated depreciation	(6,223)		(5,961)
Property, plant and equipment, net	7,013		6,958
Investments and advances related to equity method investees	2,265		2,133
Goodwill	2,222		2,224
Other intangible assets, net	2,168		2,167
Pension assets	1,008		1,033
Other assets (Note 8)	2,520		2,552
Total assets	$	35,630	$	33,992

LIABILITIES
Current liabilities
Accounts payable (principally trade)	$	4,654	$	3,800
Loans payable (Note 9)	459		313
Commercial paper (Note 9)	348		353
Current maturities of long-term debt (Note 9)	151		94
Accrued compensation, benefits and retirement costs	812		825
Current portion of accrued product warranty (Note 10)	658		693
Current portion of deferred revenue (Note 2)	1,592		1,606

Other accrued expenses (Note 8)	1,999		1,926
Total current liabilities	10,673		9,610
Long-term liabilities
Long-term debt (Note 9)	6,737		6,792


Deferred revenue (Note 2)	1,066		1,054
Other liabilities (Note 8)	3,248		3,128
Total liabilities	$	21,724	$	20,584

Commitments and contingencies (Note 11)



EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued	$	2,626	$	2,673
Retained earnings	23,650		22,616
Treasury stock, at cost, 84.9 and 84.4 shares	(11,089)		(10,662)

Accumulated other comprehensive loss (Note 12)	(2,340)		(2,278)



Total Cummins Inc. shareholders’ equity	12,847		12,349
Noncontrolling interests	1,059		1,059
Total equity	$	13,906	$	13,408
Total liabilities and equity	$	35,630	$	33,992


	Three months ended
In millions, except per share amounts	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Cummins Inc. Shareholders’ Equity		Noncontrolling Interests		Total Equity
BALANCE AT MARCH 31, 2026	$	556	$	2,046	$	22,994	$	(10,868)	$	(2,377)	$	12,351	$	1,021	$	13,372

Net income					932						932		36		968
Other comprehensive income, net of tax (Note 12)									37		37		2		39
Issuance of common stock			1								1		—		1

Repurchases of common stock							(225)				(225)		—		(225)
Cash dividends on common stock, $2.00 per share					(276)						(276)		—		(276)


Share-based awards			1				3				4		—		4





Other shareholder transactions			22				1				23		—		23
BALANCE AT JUNE 30, 2026	$	556	$	2,070	$	23,650	$	(11,089)	$	(2,340)	$	12,847	$	1,059	$	13,906

BALANCE AT MARCH 31, 2025	$	556	$	2,044	$	21,401	$	(10,711)	$	(2,366)	$	10,924	$	1,047	$	11,971

Net income					890						890		38		928
Other comprehensive income, net of tax (Note 12)									199		199		2		201
Issuance of common stock			1								1		—		1

Cash dividends on common stock, $1.82 per share					(251)						(251)		—		(251)
Distributions to noncontrolling interests											—		(1)		(1)
Share-based awards			1				1				2		—		2





Other shareholder transactions			22				2				24		(2)		22
BALANCE AT JUNE 30, 2025	$	556	$	2,068	$	22,040	$	(10,708)	$	(2,167)	$	11,789	$	1,084	$	12,873

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.


	Six months ended
In millions, except per share amounts	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Cummins Inc. Shareholders’ Equity		Noncontrolling Interests		Total Equity
BALANCE AT DECEMBER 31, 2025	$	556	$	2,117	$	22,616	$	(10,662)	$	(2,278)	$	12,349	$	1,059	$	13,408

Net income					1,586						1,586		62		1,648
Other comprehensive loss, net of tax (Note 12)									(62)		(62)		(26)		(88)
Issuance of common stock			1								1		—		1
Repurchases of common stock							(468)				(468)		—		(468)
Cash dividends on common stock, $4.00 per share					(552)						(552)		—		(552)
Distributions to noncontrolling interests											—		(36)		(36)
Share-based awards			(27)				39				12		—		12




Other shareholder transactions			(21)				2				(19)		—		(19)
BALANCE AT JUNE 30, 2026	$	556	$	2,070	$	23,650	$	(11,089)	$	(2,340)	$	12,847	$	1,059	$	13,906

BALANCE AT DECEMBER 31, 2024	$	556	$	2,080	$	20,828	$	(10,748)	$	(2,445)	$	10,271	$	1,037	$	11,308

Net income					1,714						1,714		64		1,778
Other comprehensive income, net of tax (Note 12)									278		278		4		282
Issuance of common stock			1								1		—		1
Cash dividends on common stock, $3.64 per share					(502)						(502)		—		(502)
Distributions to noncontrolling interests											—		(32)		(32)
Share-based awards			(18)				36				18		—		18



Other shareholder transactions			5				4				9		11		20
BALANCE AT JUNE 30, 2025	$	556	$	2,068	$	22,040	$	(10,708)	$	(2,167)	$	11,789	$	1,084	$	12,873

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.


	Pension
	U.S. Plans				U.K. Plans				OPEB
	Three months ended June 30,
In millions	2026		2025		2026		2025		2026		2025
Service cost	$	34	$	33	$	4	$	3	$	—	$	—
Interest cost	44		44		19		20		1		2
Expected return on plan assets	(70)		(67)		(25)		(23)		—		—
Amortization of prior service cost	1		—		1		1		—		—
Recognized net actuarial loss (gain)	2		3		8		6		(1)		(2)
Net periodic benefit expense	$	11	$	13	$	7	$	7	$	—	$	—

	Pension
	U.S. Plans				U.K. Plans				OPEB
	Six months ended June 30,
In millions	2026		2025		2026		2025		2026		2025
Service cost	$	69	$	66	$	7	$	7	$	—	$	—
Interest cost	88		87		39		38		2		3
Expected return on plan assets	(140)		(134)		(50)		(45)		—		—
Amortization of prior service cost	1		1		1		1		—		—
Recognized net actuarial loss (gain)	5		5		17		13		(2)		(3)
Net periodic benefit expense	$	23	$	25	$	14	$	14	$	—	$	—


In millions	Interest Rate	June 30, 2026		December 31, 2025
Long-term debt



Debentures, due 2027	6.75%	$	58	$	58
Debentures, due 2028	7.125%	250		250
Senior notes, due 2028	4.25%	300		300
Senior notes, due 2029	4.90%	500		500
Senior notes, due 2030 (1)	1.50%	850		850
Senior notes, due 2031	4.70%	700		700
Senior notes, due 2034	5.15%	750		750
Senior notes, due 2035	5.30%	1,000		1,000
Senior notes, due 2043	4.875%	500		500
Senior notes, due 2050	2.60%	650		650
Senior notes, due 2054 (1)	5.45%	1,000		1,000
Debentures, due 2098 (2)	5.65%	165		165

Other debt		197		175

Unamortized discount and deferred issuance costs		(87)		(91)
Fair value adjustments due to hedge on indebtedness		(77)		(57)
Finance leases		132		136
Total long-term debt		6,888		6,886
Less: Current maturities of long-term debt		151		94
Long-term debt		$	6,737	$	6,792

(1) We entered into interest rate swaps on the noted debt instruments to effectively convert from a fixed rate to a floating rate. See "Interest Rate Risk" in NOTE 13, “DERIVATIVES,” for additional information.
(2) The effective interest rate is 7.48 percent.



In millions	2026		2027		2028		2029		2030
Principal payments	$	63	$	155	$	632	$	541	$	864



	Three months ended
In millions	Change in pension and OPEB plans		Foreign currency translation adjustment		Unrealized gain (loss) on derivatives		Total attributable to Cummins Inc.		Noncontrolling interests		Total
Balance at March 31, 2026	$	(927)	$	(1,541)	$	91	$	(2,377)
Other comprehensive (loss) income before reclassifications
Before-tax amount	(1)		18		13		30		$	2	$	32
Tax benefit (expense)	—		3		(3)		—		—		—
After-tax amount	(1)		21		10		30		2		32
Amounts reclassified from accumulated other comprehensive income (loss) (1)	9		—		(2)		7		—		7

Net current period other comprehensive income	8		21		8		37		$	2	$	39
Balance at June 30, 2026	$	(919)	$	(1,520)	$	99	$	(2,340)

Balance at March 31, 2025	$	(870)	$	(1,602)	$	106	$	(2,366)
Other comprehensive income (loss) before reclassifications
Before-tax amount	—		173		3		176		$	2	$	178
Tax benefit (expense)	—		22		(1)		21		—		21
After-tax amount	—		195		2		197		2		199
Amounts reclassified from accumulated other comprehensive income (loss) (1)	7		—		(5)		2		—		2
Net current period other comprehensive income (loss)	7		195		(3)		199		$	2	$	201
Balance at June 30, 2025	$	(863)	$	(1,407)	$	103	$	(2,167)

(1) Amounts are net of tax. Reclassifications out of accumulated other comprehensive (loss) income and the related tax effects are immaterial for separate disclosure.


	Derivatives Designated as Hedging Instruments				Derivatives Not Designated as Hedging Instruments
In millions	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Notional amount	$	4,158	$	3,241	$	3,607	$	4,316

Derivative assets
Prepaid expenses and other current assets (1)	$	33	$	16	$	37	$	39




Derivative liabilities
Other accrued expenses	$	22	$	29	$	3	$	3
Other liabilities	97		72		—		—
Total derivative liabilities (1)	$	119	$	101	$	3	$	3

(1) Estimates of the fair value of all derivative assets and liabilities above are derived from Level 2 inputs, which are estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 input measures and there were no transfers into or out of Level 2 or 3 during the six months ended June 30, 2026, or the year ended December 31, 2025.


In millions	Engine		Components		Distribution		Power Systems		Accelera		Total Segments
Three months ended June 30, 2026
External sales	$	2,349	$	2,431	$	3,320	$	1,217	$	140	$	9,457
Intersegment sales	735		460		6		1,038		5		2,244
Total sales	3,084		2,891		3,326		2,255		145		11,701
Cost of goods sold (excluding warranty expenses)	2,337		2,300		2,633		1,516		151		8,937
Warranty expenses	100		62		14		25		30		231
Selling expenses	69		52		175		50		5		351
Administrative expenses	173		141		110		106		12		542
Research, development and engineering expenses	181		88		15		79		22		385
Equity, royalty and interest income (loss) from investees	79		10		34		34		(3)		154
Other income (expense) (1)	6		(3)		4		4		1		12
Add back: Depreciation and amortization (2)	77		126		34		35		8		280
Segment EBITDA	$	386	$	381	$	451	$	552	$	(69)	$	1,701

Interest income (3)	$	10	$	11	$	7	$	5	$	—	$	33

Three months ended June 30, 2025
External sales	$	2,162	$	2,295	$	3,034	$	1,054	$	98	$	8,643
Intersegment sales	737		410		7		835		7		1,996
Total sales	2,899		2,705		3,041		1,889		105		10,639
Cost of goods sold (excluding warranty expenses)	2,168		2,161		2,419		1,290		132		8,170
Warranty expenses	119		28		5		26		12		190
Selling expenses	61		40		154		41		7		303
Administrative expenses	146		121		89		106		14		476
Research, development and engineering expenses	151		77		14		69		46		357
Equity, royalty and interest income (loss) from investees	60		10		26		27		(5)		118
Other income (expense) (1)	18		(18)		27		11		(2)		36
Add back: Depreciation and amortization (2)	68		127		32		35		13		275
Segment EBITDA	$	400	$	397	$	445	$	430	$	(100)	$	1,572

Interest income (3)	$	8	$	10	$	7	$	4	$	1	$	30


	Three months ended				Favorable/				Six months ended				Favorable/
	June 30,				(Unfavorable)				June 30,				(Unfavorable)
In millions	2026		2025		Amount		Percent		2026		2025		Amount		Percent
United States and Canada	$	5,596	$	5,189	$	407	8	%	$	10,368	$	10,243	$	125	1	%
International	3,861		3,454		407		12	%	7,487		6,574		913		14	%
Total net sales	$	9,457	$	8,643	$	814	9	%	$	17,855	$	16,817	$	1,038	6	%


	Three months ended June 30,
Reportable Segments	2026						2025						Percent change
			Percent						Percent				2026 vs. 2025
In millions	Sales		of Total		EBITDA		Sales		of Total		EBITDA		Sales		EBITDA
Engine	$	3,084	26	%	$	386	$	2,899	27	%	$	400	6	%	(4)	%
Components	2,891		25	%	381		2,705		25	%	397		7	%	(4)	%
Distribution	3,326		29	%	451		3,041		29	%	445		9	%	1	%
Power Systems	2,255		19	%	552		1,889		18	%	430		19	%	28	%
Accelera	145		1	%	(69)		105		1	%	(100)		38	%	31	%
Total segments	11,701		100	%	1,701		10,639		100	%	1,572		10	%	8	%
Intersegment eliminations	(2,244)				(48)		(1,996)				15		12	%	NM

Total	$	9,457			$	1,653	$	8,643			$	1,587	9	%	4	%

“NM” - not meaningful information


	Three months ended				Six months ended
	June 30,				June 30,
In millions	2026		2025		2026		2025
Heavy-duty truck	$	739	$	727	$	1,302	$	1,381
Medium-duty truck and bus	772		676		1,385		1,376
Light-duty automotive	490		482		938		907
Total on-highway	2,001		1,885		3,625		3,664
Off-highway	348		277		690		538
Total sales	$	2,349	$	2,162	$	4,315	$	4,202


	Three months ended				Six months ended
	June 30,				June 30,
In millions	2026		2025		2026		2025
Drivetrain and braking systems	$	1,119	$	1,094	$	2,037	$	2,150
Emission solutions	853		777		1,660		1,568
Components and software	335		301		660		607
Automated transmissions	124		123		212		240

Total sales	$	2,431	$	2,295	$	4,569	$	4,565


	Three months ended				Six months ended
	June 30,				June 30,
In millions	2026		2025		2026		2025
North America	$	2,353	$	2,074	$	4,521	$	4,173
Asia Pacific	319		280		646		520
Europe	300		323		603		592
China	130		123		250		236
India	92		91		176		163
Africa and Middle East	70		60		126		119
Latin America	56		83		107		133
Total sales	$	3,320	$	3,034	$	6,429	$	5,936


In millions	June 30, 2026		December 31, 2025
Finished products	$	3,368	$	3,091
Work-in-process and raw materials	3,250		2,987
Inventories at FIFO cost	6,618		6,078
Excess of FIFO over LIFO	(221)		(256)
Inventories	$	6,397	$	5,822


	Three months ended				Favorable/ (Unfavorable)	Six months ended				Favorable/ (Unfavorable)
	June 30,					June 30,
Percent of sales	2026		2025		Percentage Points	2026		2025		Percentage Points
Gross margin	26.1	%	26.4	%	(0.3)	26.4	%	26.4	%	—
Selling, general and administrative expenses	9.4	%	9.0	%	(0.4)	9.7	%	9.2	%	(0.5)
Research, development and engineering expenses	4.1	%	4.1	%	—	4.2	%	4.2	%	—


Dollars in millions	June 30, 2026			December 31, 2025
Working capital (1)	$	7,761		$	7,315
Current ratio	1.73			1.76
Accounts and notes receivable, net	$	6,585		$	5,818
Days' sales in receivables	63			60
Inventories	$	6,397		$	5,822
Inventory turnover	4.2			4.2
Accounts payable (principally trade)	$	4,654		$	3,800
Days' payable outstanding	58			58
Total debt	$	7,695		$	7,552
Total debt as a percent of total capital	35.6		%	36.0		%

(1) Working capital included cash and cash equivalents.


	June 30, 2026
In millions	Total		U.S.		International		Primary location of international balances
Cash and cash equivalents	$	3,179	$	1,028	$	2,151	Singapore, China, Australia, Mexico, United Kingdom, Belgium, Romania, India and France

Marketable securities (1)	745		88		657		India
Total	$	3,924	$	1,116	$	2,808
Available credit capacity
Revolving credit facilities (2)	$	3,652

International and other uncommitted domestic credit facilities	$	781




(1) The majority of marketable securities could be liquidated into cash within a few days.
(2) The 5-year credit facility for $2.0 billion and the 3-year credit facility for $2.0 billion, maturing June 2030 and June 2028, respectively, are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. At June 30, 2026, we had $348 million of commercial paper outstanding, which effectively reduced our available capacity under our revolving credit facilities to $3.7 billion.


In millions (except per share amounts) For each quarter ended	Shares Purchased	Average Cost Per Share		Total Cost of Repurchases		Remaining Authorized Capacity
December 2019, $2 billion repurchase program
March 31	0.4	$	539.09	$	218	$	—





December 2021, $2 billion repurchase program
March 31	0.1	519.00		25		1,975
June 30	0.3	623.69		225		1,750


Subtotal	0.4	611.49		250

Total	0.8	575.54		$	468


	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1)
April 1 - April 30	102,281	$	541.91	102,281	$	1,920
May 1 - May 31	227,541	657.99		227,541	1,770
June 1 - June 30	32,133	641.05		32,133	1,750
Total	361,955	623.69		361,955


(1) Shares repurchased under our Key Employee Stock Investment Plan only occur in the event of a participant default, which cannot be predicted, and were excluded from this column.


Exhibit No.						Description of Exhibit










31(a)						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31(b)						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32						Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS*						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*						Inline XBRL Taxonomy Extension Schema Document.
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


Date:	August 4, 2026	/s/ JENNIFER RUMSEY
		Jennifer Rumsey
		Chair and Chief Executive Officer


Date:	August 4, 2026	/s/ MARK A. SMITH
		Mark A. Smith
		Vice President and Chief Financial Officer