Atmus Filtration Technologies Inc.

Previous wording

The discussion and analysis presented below provides information which management believes is relevant to an assessment and understanding of Atmus Filtration Technologies Inc. (the “Company,” “Atmus,” “we,” “our” and “us”) consolidated results of operations and financial condition. The discussion should be read in conjunction with Atmus’ consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the heading “Risk Factors.” Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “Atmus” is intended to mean the business and operations of Atmus Filtration Technologies Inc. and its consolidated subsidiaries.

Current wording

The discussion and analysis presented below provides information which management believes is relevant to an assessment and understanding of Atmus Filtration Technologies Inc. (the “Company,” “Atmus,” “we,” “our” and “us”) consolidated results of operations and financial condition. The discussion should be read in conjunction with Atmus’ consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the heading “Risk Factors.” Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to

Previous wording

The following is the discussion and analysis of changes in the financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 and the year ended December 31, 2023 compared to the year ended December 31, 2022.

Current wording

The following is the discussion and analysis of changes in the financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. A discussion of the changes in the financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 21, 2025.

Previous wording

•Potential failure of performance by Atmus or Cummins under transaction agreements executed as part of the Separation;

Current wording

•Potential failure of performance by Atmus or Cummins under transaction agreements executed as part of the IPO;

Previous wording

The divestiture of Atmus shares by Cummins was completed on March 18, 2024 and resulted in the full separation of Atmus and divestitures of Cummins’ entire ownership and voting interest in Atmus (“Full Separation”).

Current wording

On February 14, 2024, Cummins announced an exchange offer whereby Cummins shareholders could exchange all or a portion of Cummins common stock for shares of Atmus common stock owned by Cummins. The divestiture of Atmus shares by Cummins was completed on March 18, 2024 and resulted in the full separation of Atmus and divestitures of Cummins’ entire ownership and voting interest in Atmus (“Full Separation”).

Previous wording

While overall supply chain conditions continue to affect inventory and backlog levels, they have largely stabilized with minimal disruptions now being experienced and backorders largely recovered. Our management team continues to monitor and evaluate all of these factors and the related impacts of our business and operations, and we are diligently working to continue to minimize any supply chain impacts to our business and to our customers.

Current wording

Overall supply chain conditions remained largely stable during 2025 with minimal disruptions being experienced. Logistics costs increased during 2025, primarily due to the transition to a standalone distribution network as part of the Separation and the impact of tariffs. Our management team continues to monitor and evaluate all of these factors and the related impacts of our business and operations, and we are diligently working to continue to minimize any supply chain impacts to our business and to our customers.

Previous wording

We have incurred, and expect to continue to incur, additional costs associated with becoming a standalone public company. During the year ended December 31, 2024, we incurred approximately $25.2 million related to one-time separation costs including $14.5 million within Selling, general and administrative expenses and $10.7 million within Cost of sales. We expect to incur one-time expenses of approximately $5 million to $10 million in 2025 in connection with becoming a standalone public company. In addition, we expect to incur capital expenditures in connection with the Separation of approximately $5 million to $10 million in 2025. These expenses and capital expenditures primarily relate to the establishment of functions previously co-mingled with Cummins, such as information technologies, distribution centers, manufacturing and human resources. The actual amount of the expenses and capital expenditures we will incur as a stand-alone public company may be higher, perhaps significantly, from our current estimates for a number of reasons, including, among others, the final terms we are able to negotiate with service providers, as well as additional costs we may incur that we have not currently anticipated. Additionally, the actual timing of when we incur these incremental expenses may be different, perhaps significantly, from our current estimates for a number of reasons, including, among others, unforeseen events that may cause delays or interruptions in our plans or our service providers’ ability to provide their services.

Current wording

We have incurred additional costs associated with becoming a standalone public company. During the year ended December 31, 2025, we incurred approximately $15.5 million related to one-time separation costs including $11.2 million within Cost of Sales and $4.3 million within Selling, general and administrative expenses. In addition, we have incurred capital expenditures in connection with the Separation of approximately $9.5 million. These expenses and capital expenditures primarily relate to the establishment of functions previously co-mingled with Cummins, such as information technologies, distribution centers, manufacturing and human resources. The one-time costs incurred during the year ended December 31, 2025, were primarily associated with establishing our own distribution network and our technology transformation and modernization project. The transition services agreement under which Cummins had continued to provide certain services related primarily to administrative services ended in September 2025. With the conclusion of this agreement, we do not expect to incur any additional one-time expenses or capital expenditures in future periods in connection with becoming a standalone public company.

Previous wording

Net sales were$1,669.6 millionfor the year ended December 31, 2024, an increase of$41.5 million compared to$1,628.1 million for the year ended December 31, 2023. The increase in Net sales was mainly due to $26.3 million of favorable pricing impacts and higher volumes of $22.3 million, partially offset by the unfavorable impacts of currency of $7.1 million.

Current wording

Net sales were$1,764.3 millionfor the year ended December 31, 2025, an increase of$94.7 million compared to$1,669.6 million for the year ended December 31, 2024. The increase in Net sales was mainly due to higher volumes of $51.9 million and favorable pricing impacts of $50.0 million, partially offset by unfavorable impacts of currency of $7.3 million. The favorable impact from pricing is primarily driven by normal pricing initiatives and select increases as a result of tariffs.

Previous wording

Selling, general and administrative expenses were$187.6 millionfor the year ended December 31, 2024, an increase of$12.9 million compared to$174.7 million for the year ended December 31, 2023. The increase was primarily driven by increased people-related and consulting expenses, including one-time restructuring costs, partially offset by lower one-time separation costs. Selling, general and administrative expenses as a percentage of Net sales were 11.2% for theyear ended December 31, 2024, an increase of 0.5 percentage points compared to 10.7% for theyear ended December 31, 2023. The increase in Selling, general and administrative expenses as a percentage of Net sales was primarily driven by the items noted above increasing at a higher rate in relation to the increase in Net sales.

Current wording

Selling, general and administrative expenses were$184.3 millionfor the year ended December 31, 2025, a decrease of$3.3 million compared to$187.6 million for the year ended December 31, 2024. The decrease was primarily driven by lower one-time separation and restructuring costs of $11.6 million, partially offset by increased people-related and consulting expenses and an increase in amortization of internal-use software. Selling, general and administrative expenses as a percentage of Net sales were 10.4% for theyear ended December 31, 2025, a decrease of 0.8 percentage points compared to 11.2% for theyear ended December 31, 2024. The decrease in Selling, general and administrative expenses as a percentage of Net sales was primarily driven by the items noted above.

Previous wording

Other operating expense, net was$2.0 million for the year ended December 31, 2024, an increase of$1.3 million compared to$0.7 million for the year ended December 31, 2023. The increase in Other operating expense, net was primarily due to inventory write-offs related to warehouse transitions made during the year.

Current wording

Other operating expense, net was$8.1 million for the year ended December 31, 2025, an increase of$6.1 million compared to$2.0 million for the year ended December 31, 2024. The increase was primarily due to long-lived asset impairment charges on idled machinery, equipment and fixtures.

Previous wording

Other income, net was $3.8 million for the year ended December 31, 2023, a decrease of $5.0 million compared to $8.8 million for the year ended December 31, 2022. The decrease in Other income, net was primarily due to the net loss on foreign exchange rate hedging, partially offset by higher interest income as a result of cash balances held in interest-bearing accounts which we did not have prior to IPO.

Current wording

Other income, net was$0.6 millionfor the year ended December 31, 2025, a decrease of$8.6 million compared to$9.2 million for the year ended December 31, 2024. The decrease in Other income, net was due to an increase in the net loss on foreign exchange rate hedging which offset interest income that remained stable between the comparable periods.

Previous wording

Our effective tax rate for the year ended December 31, 2023 was 24.3%, an increase of 4.7% compared to 19.6% for the year ended December 31, 2022. The increase in the effective tax rate was driven by a change in the mix of earnings among tax jurisdictions and changes in discrete tax items. Our effective tax rate differs from the U.S. statutory rate primarily due to differences in rates applicable to foreign subsidiaries, withholding taxes and state income taxes.

Current wording

Our effective tax rate for the year ended December 31, 2025 was 22.1%, an increase of 1.1 percentage points compared to 21.0% for the year ended December 31, 2024. The increase in the effective tax rate was driven by unfavorable changes in the mix of earnings and lower U.S. credits and incentives following cash tax planning around recent U.S. tax law changes, partially offset by a valuation allowance release on foreign deferred tax assets. Our effective tax rate differs from the U.S. statutory rate primarily due to differences in rates applicable to foreign subsidiaries, withholding taxes and state income taxes.

Previous wording

Our facilities under the Credit Agreement provide for $1.0 billion in total capacity, which includes a $600 million term loan and a $400 million revolving credit facility. As of December 31, 2024, we have outstanding borrowings of $592.5 million on the term loan and zero on the revolving credit facility. As a result, we had capacity under our revolving credit facility of $400 million as of December 31, 2024.

Current wording

Our facilities under the Credit Agreement provide for $1.0 billion in total capacity, which includes a $600 million term loan and a $400 million revolving credit facility. As of December 31, 2025, we have outstanding borrowings of $570.0 million on the term loan and zero on the revolving credit facility. As a result, we had capacity under our revolving credit facility of $400 million as of December 31, 2025. Subsequent to current year end, on January 7, 2026, the Company entered into an Amended and Restated Credit Agreement which provided for a term loan facility of $1.0 billion and $500 million revolving credit facility, both of which mature on January 7, 2031. The term loan facility was drawn on fully for the amount of $1.0 billion with proceeds used to refinance the outstanding term loan facility and to finance in part the acquisition of Koch Filter Corporation. Refer to Note 21, Subsequent Events, to the Consolidated Financial Statements for more information.

Previous wording

Net cash provided by operating activities was $105.4 million for the year ended December 31, 2024, a decrease of$83.6 million compared to Net cash provided by operating activities of $189.0 million for the year ended December 31, 2023. The decrease was driven primarily by higher working capital requirements of $117.1 million, partially offset by higher net income, higher equity income from investees and a favorable change in other liabilities. During the year ended December 31, 2024, higher working capital requirements resulted in a cash outflow of $103.3 million compared to a cash inflow of $11.3 million for the year ended December 31, 2023, mainly due to lower trade accounts payable, lower other accrued expenses, higher inventories, higher prepaids and higher trade accounts receivable.

Current wording

Net cash provided by operating activities was $202.7 million for the year ended December 31, 2025, an increase of$97.3 million compared to Net cash provided by operating activities of $105.4 million for the year ended December 31, 2024. The increase was driven primarily by a favorable change in working capital requirements of$40.1 million, a favorable change in deferred taxes of $26.4 million and higher net income of$21.8 million. During the year ended December 31, 2025, higher working capital requirements resulted in a cash outflow of$63.2 million compared to a cash outflow of$103.3 million for the year ended December 31, 2024, mainly due to higher trade accounts payable and lower prepaids, partially offset by higher trade and other receivables including VAT receivables.

Previous wording

Dividends received from our unconsolidated equity investees were $25.5 million and $19.8 million for the years ended December 31, 2024 and December 31, 2023, respectively. Dividends are included in Net cash provided by operating activities.

Current wording

Dividends received from our unconsolidated equity investees were $21.0 million, $25.5 million and $19.8 million for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. Dividends are included in Net cash provided by operating activities.

Previous wording

Net cash used in investing activities for each fiscal year presented was primarily used for capital expenditures. Our capital expenditures were $48.6 million (of which approximately $15.0 million related to one-time separation costs), $45.8 million (of which approximately $9.2 million related to one-time separation costs) and $37.5 million for the years ended December 31, 2024, December 31, 2023,and December 31, 2022, respectively, corresponding to approximately 2.9%, 2.8% and 2.4% of Net sales in 2024, 2023 and 2022, respectively.

Current wording

Net cash used in investing activities for each fiscal year presented was primarily used for capital expenditures. Our capital expenditures were $53.9 million (of which approximately $9.5 million related to one-time separation costs) and $48.6 million (of which approximately $15.0 million related to one-time separation costs) for the years ended December 31, 2025 and December 31, 2024, respectively, corresponding to approximately 3.1% and 2.9% of Net sales in 2025 and 2024, respectively.

Previous wording

Net cash used in financing activities for the year ended December 31, 2024 consisted primarily of repurchases of common stock of $20.0 million, dividends paid of $8.3 million and payments made on our term loan of $7.5 million. Net cash provided by financing activities for the year ended December 31, 2023 consisted primarily of long-term debt proceeds from our borrowings of $650 million under our Credit Agreement, partially offset by net transfers of $579.5 million to Cummins as part of the Separation and $50.0 million in payments made on our revolving credit facility. Net cash used in financing activities for the year ended December 31, 2022 consisted entirely of transfers to Cummins.

Current wording

Net cash used in financing activities for the year ended December 31, 2025 consisted primarily of repurchases of common stock of$60.7, payments made on our term loan of$22.5 million anddividends paid of$17.3 million. Net cash used in financing activities for the year ended December 31, 2024 consisted primarily of repurchases of common stock of $20.0 million, dividends paid of $8.3 million and payments made on our term loan of $7.5 million.

Previous wording

We paid dividends of $8.3 million in 2024 and none in 2023 and 2022. The current quarterly dividend rate is $0.05 per share of common stock. The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making.

Current wording

We paid dividends of $17.3 million in 2025, $8.3 million in 2024 and none in 2023. The first quarter 2025 dividend of $0.05 per share, declared on February 19, 2025 for shareholders of record as of March 4, 2025, was paid on March 19, 2025. The second quarter of 2025 dividend of $0.05 per share, declared on May 21, 2025 for shareholders of record as of June 3, 2025, was paid on June 18, 2025. The third quarter 2025 dividend of $0.055 per share, declared on August 13, 2025 for shareholders of record as of August 26, 2025, was paid on September 10, 2025. The fourth quarter dividend of $0.055 per share, declared on November 12, 2025 for shareholders of record as of November 25, 2025, was paid on December 10, 2025. The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making.

Previous wording

Our total debt outstanding was $592.5 million at December 31, 2024 and was $600.0 million at December 31, 2023. We had no debt outstanding at December 31, 2022. At December 31, 2024, the weighted-average term of our outstanding long-term debt was 2.9 years. Refer to Note 12, Debt and Borrowing Arrangements, to the Consolidated Financial Statements for more information on our debt and debt covenants.

Current wording

Our total debt outstanding was$570.0 million at December 31, 2025, was$592.5 million at December 31, 2024, and was $600.0 million at December 31, 2023. At December 31, 2025, the weighted-average term of our outstanding long-term debt was 1.9 years. Refer to Note 12, Debt and Borrowing Arrangements, and Note 21, Subsequent Events, to the Consolidated Financial Statements for more information on our debt and debt covenants.

Previous wording

•“Adjusted EBITDA” is defined as EBITDA after adding back certain one-time expenses, reflected in Cost of sales and Selling, general and administrative expenses, associated with becoming a standalone public company and one-time restructuring costs and “Adjusted EBITDA margin” is defined as Adjusted EBITDA as a percent of Net sales. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful measures of our operating performance as they allow investors and debt holders to compare our performance on a consistent basis without regard to one-time costs attributable to our becoming a standalone public company.

Current wording

•“Adjusted EBITDA” is defined as EBITDA after adding back certain one-time expenses, reflected in Cost of sales and Selling, general and administrative expenses, associated with becoming a standalone public company, one-time restructuring costs and long-lived asset impairment charges and “Adjusted EBITDA margin” is defined as Adjusted EBITDA as a percent of Net sales. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful measures of our operating performance as they allow investors and debt holders to compare our performance on a consistent basis without regard to one-time costs attributable to our becoming a standalone public company and non-recurring long-lived asset impairment charges.

Previous wording

•“Adjusted earnings per share” is defined as diluted earnings per share (the most comparable U.S. GAAP financial measure) after adding back certain one-time expenses, reflected in Cost of sales and Selling, general and administrative expenses, associated with becoming a standalone public company and one-time restructuring costs less the related tax impact of the same one-time expenses. We believe Adjusted earnings per share provides improved comparability of underlying operating results.

Current wording

•“Adjusted earnings per share” is defined as diluted earnings per share (the most comparable U.S. GAAP financial measure) after adding back certain one-time expenses, reflected in Cost of sales and Selling, general and administrative expenses, associated with becoming a standalone public company, one-time restructuring costs and long-lived asset impairment charges less the related tax impact of the same one-time expenses and asset impairment charges. We believe Adjusted earnings per share provides improved comparability of underlying operating results.

Previous wording

(a)Primarily comprised of one-time expenses related to Information Technology, warehousing, manufacturing and Human Resources separation costs.

Current wording

(b)Primarily comprised of one-time expenses related to Information Technology, warehousing, manufacturing and Human Resources separation costs.

Previous wording

(a)Primarily comprised of one-time expenses related to Information Technology, warehousing, manufacturing, restructuring and Human Resources separation costs and the related tax impact of those expenses. The tax impact of one-time restructuring costs for the year ended December 31, 2024 were $0.9 million and the tax impact ofone-time separation costs for the years ended December 31, 2024, 2023 and 2022 were $5.3 million, $6.9 million and $1.8 million, respectively.

Current wording

(b)Primarily comprised of one-time expenses related to Information Technology, warehousing, manufacturing, restructuring and Human Resources separation costs and the related tax impact of those expenses. The tax impact of one-time restructuring costs for the year ended December 31, 2024 was $0.9 million and the tax impact of one-time separation costs for the years ended December 31, 2025, 2024 and 2023 were $3.4 million, $5.3 million and $6.9 million, respectively.

Previous wording

We determine our income tax expense using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We recognize the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. Future tax benefits of net operating loss and credit carryforwards are also recognized as deferred tax assets. We evaluate the recoverability of our deferred tax assets each quarter by assessing the likelihood of future profitability and available tax planning strategies that could be implemented to realize our net deferred tax assets. At December 31, 2024, we recorded net deferred tax assets of $16.9 million. The assets included $8.6 million for the value of net operating loss and credit carryforwards. A valuation allow ance of$8.5 million was recorded to reduce the tax assets to the net value management believed was more likely than not to be realized. In the event our operating performance deteriorates, future assessments could conclude that a larger valuation allowance will be needed to further reduce the deferred tax assets.

Current wording

We determine our income tax expense using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We recognize the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. Future tax benefits of net operating loss and credit carryforwards are also recognized as deferred tax assets. We evaluate the recoverability of our deferred tax assets each quarter by assessing the likelihood of future profitability and available tax planning strategies that could be implemented to realize our net deferred tax assets. At December 31, 2025, we recorded net deferred tax assets of $0.9 million. The assets included $9.7 million for the value of net operating loss and credit carryforwards. A valuation allowance of $6.7 million wasrecorded to reduce the tax assets to the net value management believed was more likely than not to be realized. In the event our operating performance deteriorates, future assessments could conclude that a larger valuation allowance will be needed to further reduce the deferred tax assets.