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Cummins employees share informationabout their award-winning projects at theannual Six Sigma Expo.Who We AreCummins roots are planted in soil nourished byinnovation, persistence and a commitment tocommunity. Founded in Columbus, Ind., in 1919 asthe Cummins Engine Company, for its namesakeClessie Lyle Cummins, the fledgling firm was amongthe first to see the commercial potential of anunproven engine technology invented two decadesearlier by Rudolph Diesel.The Company has grown to be a global powerleader. Today, half of Cummins 37,800 employeesand half the Company’s sales are from outside theUnited States.Since the early part of the decade, we have reshapedUIF PNQBOZ JOUP XIBU XF BSF DBMMJOH B i/FX VNNJOTw o B DPNQBOZ UIBU JT MFTT DZDMJDBM NPSF diversified, more results-oriented and committed toturning a greater share of its sales into profits. Wehave adapted to changes in the competitive landscapeby vertically integrating through partnerships withoriginal equipment manufacturers (OEMs) andestablishing ourselves as a global technology leaderin a constantly changing emissions environment.All Cummins businesses and products are unitedunder the Cummins name, with the Company’searliest historical colors, red and black, representingJU BMPOH XJUI UIF MBSHF VNNJOT i w JO DPOUSBTUJOH white or black.Our brand is the sum total of all our years inbusiness. From the beginning, when the Company’sfounders first stood behind the products they soldto the ongoing growth of our diversified business,Cummins has maintained a reputation for integrity.In terms of a brand, that translates into a singlevision: dependability. We want stakeholders toknow they can depend on Cummins. And we wantemployees to be able to unify around the Cumminsbrand to create value and a competitive advantage.6\Y 7YVMPSL

Cummins is at its core a family of fourinterrelated, yet diversified businesssegments that create or enhance valueas a result of those relationships anddoing business with one other. These fourbusiness segments are Engine, PowerGeneration, Components and Distribution.Cummins products can be found innearly every type of vehicle, from theheavy-duty diesel-powered trucks thattravel the world’s highways, to tractorsthat till the soil, large trucks that carrynatural resources from the mine andships that travel the world’s waterways.Cummins-built generators supply bothprime and auxiliary power around theglobe. Filters and related componentshelp engines run cleaner and moreefficiently. A network of distributorsprovide repair and maintenance servicefor customers worldwide.As of the endof 2007,Cummins wasparticipatingin 57 jointventures in18 countries.Cummins Power Generation is a globalprovider of power generation systems,components and services in standbypower, distributed power generation,as well as auxiliary power in mobileapplications to meet the needs of adiversified customer base. Cummins PowerGeneration also provides a full range ofservices and solutions, including long-termoperation and maintenance contracts andturnkey and temporary power solutions.Cummins Power Generation productsinclude diesel and alternative-fueledelectrical generator sets from 2.5 to2,700 kilowatts, alternators from0.6 kilovolt-amps to 30,000 kilovolt-amps,automatic transfer switches from 40 ampsto 4,000 amps, paralleling switchgear andgenerator set controls.Cummins EngineCummins ComponentsCummins Engine manufactures andmarkets a complete line of dieseland natural gas-powered engines foron-highway and off-highway use. Itsmarkets include heavy- and mediumduty truck, bus, recreational vehicles, firetruck and emergency vehicles, light-dutyautomotive and a number of industrialapplications, including power generation,agricultural, construction, mining, marine,oil and gas, rail and governmentequipment. Cummins also provides afull range of new parts and services andremanufactured parts and engines throughan extensive distribution network.Cummins Filtration designs, manufacturesand distributes air, fuel, hydraulic and lubefiltration, chemicals and exhaust systemtechnology products for diesel and gaspowered equipment.Cummins engines range in size from31 to 3,500 horsepower and from 1.4 litersto 91 liters.10Cummins Power GenerationCummins Inc. 2007 Sustainability ReportCummins Turbo Technologies designsand manufactures turbochargers andrelated products on a global scale fordiesel engines above 3 liters.Cummins Emission Solutions developsand supplies Cummins and other enginemanufacturers with catalytic exhaustsystems and related products for themedium- and heavy-duty diesel enginemarkets. The exhaust systems includepackaging of catalytic exhaust systems,engineered aftertreatment componentsand system integration services for engine

Driver Dave Evans, mechanic Jiggee Johnson,with Don and Clessie Cummins (in suits),prepare to qualify for the 1934 Indy 500NBOVGBDUVSFST BT XFMM BT DBUBMZUJD FYIBVTU QSPEVDUT GPS SFUSPGJU PG FOHJOFT JO UIF FYJTUJOH QPQVMBUJPO Cummins Fuel Systems designs, develops andmanufactures new fuel systems and remanufactureselectronic control modules in the United States. In.FYJDP JU BTTFNCMFT OFX VNNJOT GVFM TZTUFNT and also remanufactures Cummins fuel systems aswell as fuel systems from other manufacturers. Thisbusiness serves engines ranging from 8 to 78 liters.Cummins DistributionCummins Distribution drives a comprehensive globaldistribution strategy and channel management.Capitalizing on synergies in parts and services, thisbusiness helps Cummins by providing outstandingsupport to our customers, while growing a lesscyclical and less capital intensive business.more than 70 countries and territories. Companyowned distributors are located in key geographicmarkets such as China, India, Russia, Japan,Korea, South East Asia, Australia, Europe, Africa,the Middle East and Latin America.Joint VenturesCummins has entered into a number of jointventure agreements and alliances with businesspartners and affiliates in various areas of the worldUP JODSFBTF NBSLFU QFOFUSBUJPO FYQBOE QSPEVDU lines, streamline supply chain management anddevelop new technologies. As of the end of 2007,Cummins was participating in 57 joint ventures in18 countries.Distribution operates within this network with17 company-owned and 15 joint ventureEJTUSJCVUPST JO BQQSPYJNBUFMZ MPDBUJPOT JO 6\Y 7YVMPSL

Commitment to StakeholdersCummins recognizes that its duty goesbeyond the bottom line. While the Companymust deliver value to shareholders, it alsostrives to responsibly and effectively serveall stakeholders – customers, employees,business partners and the communities inwhich it operates.The Company actively engages allstakeholders, seeking feedback and doingits best to keep them informed of Cummins’actions and performance. The Company’spolicies reflect a commitment to financialexcellence, environmental stewardship,workplace equity, corporate responsibilityand fair competition.“Cumminscan create anadvantage overour competitorswhen weunderstandour customer’sfeelingsand providea positiveexperience forhim or her.”JoseParra-MorzanOur activities related to the communityare detailed in the Corporate Responsibilitysection of this book, which begins onPage 90.CustomersCummins is dedicated to exceeding theexpectations of its customers, makingproducts and providing support that givecustomers a competitive advantage inthe marketplace.Cummins works with key customersduring development and production toensure that products are manufactured tothe customers’ satisfaction. Increasingly,Cummins is using Six Sigma tools to helpits customers and suppliers reduce costsand improve quality.The Company’s goal for using Six Sigmawith customers is to create the sharedbelief that Cummins cares as much about12Cummins Inc. 2007 Sustainability Reportthe customer’s business as the customersthemselves. Cummins currently hasapproximately 220 active customer-focusedSix Sigma projects and has completednearly 640 projects since 2005.In some cases, Cummins has sentSix Sigma “belts” to work directly witha customer to solve a specific challenge.In other instances, Cummins has trainedand provided support to belts workingfor our customers. Some recentexamples of Cummins’ customer-focusedSix Sigma efforts: Reducing a customer’s soot filter fieldissues without an adverse effect on theaftertreatment system. Increasing the fuel filter change intervalon certain heavy-duty trucks from30,500 miles to 34,500 miles. Increasing a co-generation plant’saverage monthly availability to90 percent and meeting all emissionsrequirements of the operating permit.Customer CareOne of the biggest challenges for Cumminsin our extremely competitive global businessenvironment is becoming and staying thefirst choice of customers. That is whyCummins launched its Customer SupportExcellence (CSE) initiative.As a company, we realize it is not enoughto develop the most innovative technologyor build the most dependable engines. Ourcustomers have to believe, and we mustshow them, we care as much about their

The Dodge Ram3500 heavy-dutypickup achieves2010 emissionstandards.The Dodge Ram:An Environmental WinnerThe Cummins Dodge Ram pickup heavy-duty engine received tophonors among the 2007 winners of Chrysler’s environmental awards.Cummins was a winner in the Product Related EnvironmentalProtection category.In 2007, new heavy-duty diesel engine emission regulations tookeffect in the United States that required the diesel-powered Dodge3BN UP NBLF ESBNBUJD SFEVDUJPOT JO PYJEFT PG OJUSPHFO /0Y BOE particulate matter (PM) emissions. The new 2007 Dodge Ram heavyduty engine uses a diesel particulate filter to virtually eliminate PMFNJTTJPOT BOE B /0Y BETPSCFS DBUBMZTU UP SFEVDF /0Y CZ BT NVDI as 90 percent from 2006 levels.*O QSFTFOUJOH UIF BXBSE ISZTMFS OPUFE UIF GPMMPXJOH i8PSLJOH JO a close partnership, Chrysler and Cummins achieved remarkableSFTVMUT JO NFFUJOH BOE FYDFFEJOH CPUI SFHVMBUPSZ SFRVJSFNFOUT BOE customer needs. The new Dodge Ram 2500 and 3500 are the firstWFIJDMFT UP BDIJFWF UIF TUSJOHFOU /0Y AQIBTF JO FNJTTJPO TUBOEBSE JO all 50 States, and to do so three years early. The 6.7-liter CumminsTurbo Diesel maintains fuel efficiency as compared to the 2006model. It also maintains the diesel engine’s 30 percent fuel economyTBWJOHT PWFS HBTPMJOF FOHJOFT BOE UIVT MPXFS 0 FNJTTJPOT w6\Y 7YVMPSL

success as they do. Cummins uses thevoice of the customer to drive improvementBOE XF TUSJWF UP FYFDVUF DSJUJDBM DVTUPNFS work flawlessly.Each business unit has a leader responsiblefor developing projects to meet the needsof its customers. Also, each business unit ischarged with developing customer-focused4JY 4JHNB QSPKFDUT UIBU UBDLMF UIF JTTVFT and problems facing individual customers.Customers are noticing. In fact, KnightTransportation, a key national truckingcompany in the southwestern U.S., askedUP KPJO VNNJOT JO UIF PNQBOZ T 4JY Sigma training. Working together, Knightand Cummins have been able to focus onB TQFDJGJD DVTUPNFS OFFE o FMJNJOBUJPO PG billing errors and instituting more reliableQSPDFTTFT o UIBU TBWFE UIF DVTUPNFS NPSF than 300,000 a year.Cummins usesa voice ofthe customerapproachto driveimprovement,and we strive toexecute criticalcustomer workflawlessly.Cummins has developed severalcorporate-wide initiatives to improve thelevel of customer support across theCompany. Notable is the CSE training,which includes a different approach tomeeting customer needs by looking at anissue through the customer’s perspective.Since the program started, more than19,000 employees have received CSEawareness training in 17 different countries,with 57 groups implementing customerfocused projects. We are now movingbeyond Cummins employees and arereaching out to independent distributors.#Z GPDVTJOH PO NBLJOH NFBTVSBCMF improvements in the things that mattermost to customers, we move closer toour objective of becoming the first choiceof customers. *\TTPUZ 0UJ :\Z[HPUHIPSP[ 9LWVY[The Cummins Operating SystemThe Cummins Operating System (COS)helps develop common practices andapproaches designed to improve customersatisfaction and profitability. The COSis designed to reduce waste, improvequality, increase responsiveness anddevelop people.The COS consists of 10 operating practicesthat are common across the Company.It is supported by nine common functions,FBDI XJUI B 'VODUJPOBM &YDFMMFODF GSBNFXPSL 5IF 'VODUJPOBM &YDFMMFODF framework at Cummins provides standards,measures, skills requirements and anindividual work plan so each function inthe Company can provide service orsupport at world-class levels. Employeesare trained on the COS and Functional&YDFMMFODF BQQSPBDIFT BOE UIFJS JNQPSUBODF to Cummins future success." LFZ BTQFDU PG UIF 'VODUJPOBM &YDFMMFODF approach at Cummins involves promotingleadership across all business units andgroups. Leaders at Cummins are measuredon their ability to:t %SJWF UIF PSHBOJ[BUJPO UPXBSE UIF 7JTJPO by accomplishing the Missiont -JWF BOE GPTUFS UIF VNNJOT DPSF WBMVFT of integrity, innovation, delivering superiorresults, diversity, global involvement andcorporate responsibilityt 'PDVT PO DVTUPNFS TVDDFTT and deliver resultst SFBUF BO FOWJSPONFOU JO XIJDI QFPQMF can develop and flourish, and wherechampionship teams flourish.

In 2006, Cummins began conducting COSassessments. These assessments allow us todemonstrate that the 10 COS practices areembedded in our key processes. They also allowus to identify improvement opportunities anddevelop an improvement plan to close the gaps.EmployeesCummins has a long history of being an employer ofchoice. That reputation continues to this day and isreinforced by the Company’s competitive salary andbenefits offerings, training and career developmentopportunities and positive work environment.Cummins employees enjoy a full slate of benefits,including innovative and competitively pricedhealth-care coverage; pension and retirementprograms; generous tuition reimbursement benefitsfor continuing education; access to world-classDIJME EFWFMPQNFOU DFOUFST GMFYJCMF XPSL TDIFEVMFT employee assistance programs and more. Thesebenefits also were made available to non-spousaldomestic partners in 2000.Cummins places a premium on its workers treatingone another with respect and dignity. Treatment ofothers at work is a key component of the Company’s PEF PG #VTJOFTT POEVDU BOE JT UIF TVCKFDU PG mandatory training for all new hires. Training andcareer development opportunities also play a crucialrole in Cummins’ success and in the Company’sefforts to attract and retain a talented workforce.All new hires must attend mandatory training coursescovering treatment of others, diversity, informationBOE QIZTJDBM TFDVSJUZ TFYVBM IBSBTTNFOU JTTVFT UIF Cummins performance management system andthe Cummins Operating System. In addition, theCompany’s Powertrain program offers on-line trainingon a variety of subjects, ranging from businesssoftware applications to project managementskills to interpersonal and communications skills topresentation and leadership skills.Nekedia Gaillard, Assembly Technician,Cummins Turbo TechnologiesEmployees’ performance and development plansare reviewed through the Cummins performancemanagement system called OnTrack. ThroughOnTrack, employees work with their supervisors tocreate challenging work plans that reflect the goalsof the Company and its individual performance cells.Employees receive formal feedback from supervisorsand peers quarterly, in addition to a comprehensiveannual evaluation.Cummins also offers its employees opportunitiesfor growth within the Company as their skills andinterests dictate. Cummins has a strong historyPG iHSPXJOH JUT PXOw MFBEFST BOE FNQMPZFFT regularly move freely from one part of the Companyto another.Employees are encouraged to seek out newchallenges and to continually broaden their skill sets.High-potential employees are identified and offeredcomprehensive leadership training as part of theCompany’s ongoing efforts to develop its leadersfrom within.6\Y 7YVMPSL

Five-Year Total Shareholder Return at Year-End 2007Cummins haslaunched afocused effortto ensure theCompany’smost criticalsuppliers arecommitted toimprovementthroughSix Sigma.Business PartnersSuppliersCummins has working relationships withdistributors and suppliers across the world.Similarly, the Company acts as a supplierof components to a number of equipmentmanufacturers, and has been able to buildstrong bonds with its business partners.Cummins has launched a focused effortto ensure that the Company’s most criticalsuppliers are committed to improvementUISPVHI 4JY 4JHNB SJUJDBM TVQQMJFST UP VNNJOT NVTU NFFU QBSUJDVMBS 4JY 4JHNB performance requirements. Cummins’quality is heavily dependent on the qualityPG PVS TVQQMJFST QSPEVDUT 0VS FYQFSJFODF JT UIBU 4JY 4JHNB JT B SFMJBCMF BQQSPBDI UP quality improvement.The Company is proud of its efforts to earniQSFGFSSFE TVQQMJFSw TUBUVT XJUI DVTUPNFST 'PS FYBNQMF &JDIFS .PUPST -JNJUFE recently recognized Tata Holset, one of ourjoint ventures in India that manufacturesUVSCPDIBSHFST BT #FTU 4VQQMJFS GPS outstanding contribution to supply chainmanagement in the category of proprietaryitems. Judging criteria for best vendorincluded parts per million (PPM) level,quality certification, adherence to schedule,on-time delivery, cost reduction, responsetime and service support. *\TTPUZ 0UJ :\Z[HPUHIPSP[ 9LWVY[Columbus Components Group, a minorityowned Cummins supplier located inColumbus, Indiana, has been recognizedGPS JUT VTF PG 4JY 4JHNB UPPMT UP BTTFTT quality control and create an overall qualityimprovement plan. Columbus Components(SPVQ DMPTFE JUT GJSTU 4JY 4JHNB QSPKFDU which resulted in a significant improvementin quality for components supplied to the

Cummins Jamestown Engine Plant. This improvementwas a significant factor in awarding ColumbusComponents Group additional business for the modelyear 2007 Dodge Ram pickup engine.ShareholdersReturning value, in terms of profits, rising stock pricesand dividends, is a primary measure of a company’scommitment to its shareholders. Beyond returningfinancial value, Cummins believes it owes investors atransparent window into its financial workings.Cummins goes to great lengths to keep theinvesting community up-to-date on its performanceand future outlook. Top executives hold quarterlyteleconferences with industry analysts to discussfinancial results. Company representatives also hostor attend a number of investor conferences during theyear, and meet or talk directly with individual analystsand investors on nearly a daily basis.Cummins’ positive corporate governance practiceson behalf of the shareholders include the following: The full board of directors is elected annually. The audit, compensation and nominatingcommittees are made up of independentoutside directors. The company has a designated lead director. Executive and directors are subject to stockownership guidelines. All stock-based incentive plans have beenapproved by shareholders.Our Profile17

Net SalesNet( Salesin billions)( in billions) 13.05 13.05Diluted EarningsDiluted Earningsper Share( )Share ( )per 3.55 11.36 9.92 8.44 6.3 6.3200320042003 2.75 9.92 1.85 8.44200520042005200620072006EBIT as aEBITPercentageas a Percentage10.4of Sales of(%)S

Cummins Inc. Cummins Inc. 2007 Sustainability Report 500 Jackson Street Columbus, IN USA (812) 377-5000 www.cummins.com Bulletin Number 4986066. Production Notes Designed by: Cummins Corporate Communications Written by: Cummins Corporate Communications Printing by: The Merrick Printing Company