Innovative. Engaged. Sustainable.

SUSTAINABILITY REPORT 2012-2013

Remanufacturing plants like this one in Juárez, Mexico, use innovative techniques to keep parts and engines in service and out of landfills. Learn more about innovation at Cummins on page 14. ABOUT THIS REPORT CONTRIBUTORS

Cummins’ 2012-2013 Sustainability Report This report relies on the writing, editing, is presented in the spirit of the Global design and technical expertise of many Reporting Initiative (GRI). The goal of the Cummins employees. Contributors this GRI is to develop a consistent way for year included: Marsha Allamanno, Cory companies around the world to voluntarily Brandt, Carole Casto, Karen Cecil, David report on the environmental, social and Clark, Sarah Clark, Laurie Counsel, Anna economic components of their business. Dickerson, Roe East, Bill Fak, Scott Field, The Coalition for Environmentally Joy Fischer, Angela Flood, John Forte, Responsible Economies created the GRI Emily Foster, Clint Garrett, David Goggin, in 1997 and works today in collaboration Elena Grimm, Colleen Hahn, Elliot Hayden, with the United Nations Environment Sheah Hilton, Molly Howard, Joann Jones, Program and the U.N. Secretary Melina Kennedy, David Koeberlein, Philip General’s Global Compact to promote Kuhl, Christine Kuo, Carol Lavengood, the importance of sustainability reporting. Yangnan Liu, Annie Mack, Sara McAninch,

Cummins takes a broad view of Zack McCrory, Paul Miller, Jon Mills, Steven sustainability, including such things Nendick, Andy Pajakowski, Pramod Palat, as safety, diversity, leadership and Brian Pence, S. Ravichandran, Alan Resnik, governance along with environmental Meredith Sanders, Stephen Sanders, practices, community involvement and Rosann Scatttoloni, Ernie Smith, Grant financial performance. The Company Suchotzky, Todd Swingle, Janet Williams, believes that it can’t be sustainable Matt Weilhamer, Blair West, Stacy Wyatt without a firm financial foundation that and Jackie Yeager. enables investment in everything from product development to building ABOUT THE COVER stronger communities. Cummins Fuel Systems’ plant in Juárez,

As a global company, Cummins Mexico, restores nearly a million injectors, wants to make a difference for all of its pumps and Electronic Control Modules stakeholders, today and in the future. each year, using innovative technology to This report was published in May 2013 return them to useful life. Cummins’ Karina and is the Company’s 10th annual edition. Meza Sosa holds a fuel injector that the plant is remanufacturing. Read more about the innovative things happening all across Cummins on page 14.

millions forJamestown,N.Y., plant...... Strategic approach toenergysaves stewardship around theworld...... Practicing environmental wise useofwater...... Mexico plantsmaking Practices...... global wastefootprint...... Cummins innovatestoreduce the past,looktofuture...... New Londonbusescelebrate stationary dieselgenerators...... Early tomarketforISX15and Products...... ‘SuperTruck’ off toimpressive start...... Environment The future ofinnovationatCummins..... Cummins’ innovativegiants...... Problem solvingthrough innovation...... Keeping thespiritofinnovationalive..... Innovation Our recognition...... values andprinciples...... mission, Vision, Our history...... How wedoit...... Who weare...... Cummins around theworld Letter from thechairman...... Introduction Table ofcontents ...... 44 28 56 54 53 42 41 40 26 24 22 20 14 12 10 9 7 6 4 2 Web toolhelpsputsafetyfirst...... Ergonomics inaction...... Ergo Cupcompetition...... Cummins holdsfirstCompany-wide distracted drivingamongteens...... Engine businesstackles Cummins’ sustainability...... Health andsafetykeyto Safety Foundation leadership...... and skillsthrough philanthropy...... Supporting employeepassions toserve...... Born designing abettercookstove...... CES putsskillstowork Students takeapathlesstraveled...... Coalition forprogress...... the DandelionSchool...... Hope blossomsat is aglobalsuccess...... Environmental Challenge deficit around theworld...... TEC program addresses skills in record numbers...... Building stronger communities responsibility Corporate environmental sustainability...... Charting aplanfor with naturalgasengines...... Fleet reduces globalwarming Partnerships andpolicy...... SUSTAINABILITY2012–2013 REPORT 100 58 99 98 97 94 93 88 86 84 82 80 78 71 70 66 65 64 key tosustainability...... Developing newleaders Diversity Procurement goesglobal...... inclusive workenvironment...... Employee groups create Pursuing diversityinIndia and inclusion...... The powerofdiversity relations Employee supply chain...... Committed toaglobal in wakeofSandy...... Putting customersfirst celebrates majormilestones...... Ram-Cummins partnership slows Cummins...... Global economicslowdown Financial Ensuring Cummins’voiceisheard...... keeping employeessecure...... Managing risks, independent judgment...... Board exercises New codeguidesethicalbehavior...... GOVERNANCE 3 ...... 104 110 108 106 102 128 126 124 122 120 118 116 112

INTRODUCTION Letter from the chairman “Innovative. Engaged. Sustainable.” The title of this year’s 2012-2013 Sustainability Report describes our Company well. In fact, Cummins was founded on innovation 94 years ago when Clessie Cummins first obtained a license to use Rudolf Diesel’s technology and then had the ingenuity

INTRODUCTION and vision to build on Diesel’s work over time.

Today, our Company is the only and function, and everywhere in between. independent diesel engine maker that They are producing the best products, remains from the more than 100 other delivering outstanding customer service, original Diesel licensees. And the continued shrinking the Company’s environmental innovation driven by the engagement of our footprint and building stronger communities more than 46,000 employees across the around the world. globe will secure the long term sustainability We define innovation, one of Cummins’ of our Company into the future. six core values, as using the “creative This year’s Sustainability Report starts out ingenuity necessary to make us better, by appropriately celebrating Cummins’ faster, first.” Here are just a few examples innovative giants over time – such as of the kinds of innovation stories that Clessie, Dr. Julius Perr and Dr. Alyn Lyn – you’ll find in this year’s report: who collectively laid the foundation for a »» Our Corporate Responsibility lot of our success today. Their stories are Environmental Challenge initiative inspiring and remind us of the tremendous where teams of Cummins employees contributions they made, embedding join together using their creativity, innovation in everything they did to meet skills and talents to carry out existing customer needs and earn new community involvement projects customers by helping ensure their success. to improve the environment.

I’m pleased to report that their legacy lives »» Our Health, Safety and Environment on. You’ll see in this year’s report that our employees’ leadership in finding ways heroes of innovation can be found all across to reduce the amount of solid waste Cummins every day and everywhere, from created at our facilities around the world, the engineers designing our products, to which has resulted in recycling almost the shop floor employees making it happen 90 percent of the waste that the in our facilities across the world, to office Company creates. employees serving every business unit

2 SUSTAINABILITY REPORT 2012–2013 10 or20yearsdowntheline. thinking aboutthenextbiginnovation in mature markets,ourteamsmustbe emissions approach near-zero levels regulations around theworld.Asengine meeting increasingly stringentairemissions of ourinnovationhasbeentiedcloselyto Cummins. Overthepast20years,much to thefuture oftechnicalinnovationat This year’s report alsolooksahead » » » » » » another Companycore value,diversity. within Cumminsforwomen,promoting additional economicopportunities create innovativewaystoopen up Our Indiaemployees’efforts to unsafe situations. best practicesharingtoavoid commitment tosafety, itincreases employees tomakeapersonal Not onlydoesthetoolencourage problems theydiscoverand resolve. employees toeasilyrecord thesafety create anewwebtoolthat enables Our SafetyandITstaffs’ joint workto homes were cold,darkand wet. first atatimewhenmanyoftheirown cases, theyputtheircustomers’needs Storm Sandyinthefallof2012.Inmany United Statesdelivered duringSuper employees alongtheEastCoastof The superiorcustomerservicethatour “Our ongoingcommitmenttoinnovateandengage and BeattheCompetitiontoIt! employees toSeetheFutureFirst innovation andbetterengageour across Cumminsin2013topromote To thisend,weare launchingacampaign Cummins Inc. Chairman andChiefExecutive Officer Tom Linebarger our 2012-2013SustainabilityReport. employees intheworld.Ihopeyouenjoy commitment anddedicationofthebest and abrightfuture ahead, thanks tothe Company witharichlegacyofinnovation it isanhonorandprivilegetoleada As ChairmanandChiefExecutiveOfficer, now andintothefuture. of ourCompanyforallstakeholders success andultimatelythesustainability do willensure ourcustomers’ longterm to innovateandengageineverythingwe unspoken needs.Ourongoingcommitment and servicestomeetboththeirspoken in innovationanddeliverthebestproducts continue todependonCumminslead Looking forward, ourcustomers will Tom Linebarger Chairman andCEO and intothefuture.” of ourCompanyforallstakeholdersnow long termsuccessandultimatelythesustainability wedowillensureourcustomers’ in everything SUSTAINABILITY2012–2013 REPORT

™ 3

INTRODUCTION Angola UNITED kingdom Huddersfield – Deputy Prime Minister Nick on Technologies Clegg visited Cummins Turbo Heat Jan. 17, 2013, to tour the Engine Waste The British Programme. Recovery Research government the initiative a £1.478 awarded million grant to push the technical boundaries been achieved in the field. already of what’s UNITED STATES Seymour – Members of the crew from the boat from of the crew Seymour – Members the Time show television Bandit on the reality Cummins several “The Deadliest Catch” toured facilities in Southern Indiana including the Seymour The Hillstrand family was Engine Plant in June 2012. fishing boat the old engines on their crab replacing with two new QSK19 engines. United kingdom Brazil Itatiba – Site preparation continued on a Itatiba – Site preparation new Cummins campus in Brazil in 2012. A water pipeline has been extended to the site that will be home to Cummins Power Generation and a Cummins Global A formal Logistics Distribution Center. planned for July 2013. is groundbreaking SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 4

globe over the past year. developments across the developments look at just some of the look at just some for Cummins. Here’s a Here’s for Cummins. the world 2012-2013 It was a busy around Cummins This map includes Cummins plants, offices and distributors. Brazil

INTRODUCTION UNITED kingdom

London – Cummins played a significant role in the Summer Olympics in 2012. The International Media Center in the heart of London was equipped with a Cummins natural gas generator for backup power and a significant number of the 30,000 Cummins- powered buses in the country ferried fans to and from the games. CHINA

Wuxi – Wuxi Cummins Turbo Technologies Co. Ltd. (Wuxi CTT) produced its 7-millionth Qatar turbocharger in December of 2012. Plant leaders held a small ceremony to celebrate Doha – Less than a year after it started business the achievement. in January 2012, Cummins Qatar LLC held its first Community Involvement Team activity. Thirty-four of Cummins Qatar’s 37 employees helped clean up one of the most visited seashores in Qatar on Nov. 23, 2012. INTRODUCTION

Australia

Cummins announced in January 2013, that Australia Angola India would be the first market in the world to offer the ISXe5 Luanda – Cummins Angola Lda Phaltan – The fifth facility at the Cummins heavy-duty truck engine. officially opened its doors for business on Megasite, the Phaltan MidRange Upfit Center, The engine meets Euro Nov. 15, 2012. The joint venture partnership was inaugurated on March 26, 2013, by 5 emissions regulations is ideally situated to develop significant Chairman and CEO Tom Linebarger and Anant through Cummins’ proven power generation, mining, marine and Talaulicar, Managing Director, Cummins India. SCR technology. filtration opportunities in Angola. The state-of-the-art facility is designed to manufacture 80 engines per day in two shifts.

Qatar

United kingdom China

SUSTAINABILITY REPORT 2012–2013 5

dealer locations. FOUNDED in 1919 WEB SITE www.cummins.com 6,500 and territories that 160 500 ranking (2013) Fortune (traded on NYSE)

company-owned and independent distributor on revenues of on revenues

Cummins reaches through a network of more than a network of more through Cummins reaches CUSTOMERS located in approximately customers are The Company’s 190 countries 600 STOCK SYMBOL CMI locations and approximately

SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 6 $17.3 billion. In 2012, Cummins earned $1.65 billion 46,000 people. of the 60 percent than More employees are Company’s located outside the U.S. EMPLOYEES approximately Worldwide, Sales / Earnings World Headquarters 500 Jackson Street Columbus, Ind., 47201 Cummins Inc., a global power leader, is a corporation of is a corporation of leader, Inc., a global power Cummins complementary manufacture, units that design, business servicedistribute and technologies, engines and related air handling, filtration, systems, controls, including fuel electrical power generation systems. emission solutions and Who we are Who

INTRODUCTION How we do it Cummins is organized into four business units:

Cummins engine business The Engine Business manufactures and markets a complete line of diesel and natural gas-powered engines for on-highway and off-highway use. Markets include heavy- and medium-duty trucks, buses, light-duty trucks and industrial uses such as agricultural, construction, mining, marine, oil and gas and military equipment.

Cummins power generation business Power Gen is a global provider of power generation systems, components and services in standby power, distributed INTRODUCTION power generation, as well as auxiliary power in mobile applications. It also provides a full range of services including long-term operation and maintenance contracts and turnkey and temporary power solutions.

Components business

Cummins Emission Solutions designs and manufactures exhaust aftertreatment technology and solutions for the medium- and heavy-duty, and high-horsepower engine markets.

Cummins Filtration designs and builds heavy-duty air, fuel, hydraulic and lube filtration, chemicals and exhaust system technology products.

Cummins Fuel Systems manufactures new fuel systems.

Cummins Turbo Technologies designs and builds turbochargers to boost engine power and related products.

Cummins Electronics designs and procures electronic hardware, develops base controls software and tools, and rebuilds Electronic Control Modules.

Cummins distribution business Cummins Distribution sells and services the full range of Cummins products for over 20 application segments in over 190 countries around the globe.

SUSTAINABILITY REPORT 2012–2013 7 In addition to being a tireless innovator, INTRODUCTION Clessie Cummins was a promotional genius, making cross-country trips on cars, buses and trucks to demonstrate the power and durability of diesel engines. He even sponsored race cars at the Indianapolis Motor Speedway powered by diesel engines.

BELOW J. Irwin Miller was a visionary leader whose views on diversity, corporate responsibility and ethics are still part of how Cummins does business today.

8 SUSTAINABILITY REPORT 2012–2013 America’s first diesel-powered automobile. businessman W.G. Irwinforaridein and onChristmasDayin1929 took engine inausedPackard limousine Company. Cumminsmountedadiesel Cummins (page20)helpedsavethe a stroke ofmarketinggeniusbyClessie After adecadeoffitsandstarts, two decadesearlierbyRudolphDiesel. unproven enginetechnologyinvented to seethecommercial potentialofan Cummins. Cumminswasamongthefirst Company, for itsnamesakeClessieLyle Ind., in1919astheCumminsEngine The CompanywasfoundedinColumbus, while maintainingstrongtiestoitsIndianahome. customersaroundtheworld operates andserves Cummins isaglobalFortune500companythat Our history approximately 6,500dealerlocations. independent distributorlocations and of more than600Company-ownedand Company reaches through anetwork in approximately 190countriesthatthe Today, Cummins’customersare located increasingly stringentemissionsregulations. producing cleanerrunningenginestomeet its reputation asatechnologyleader, power generationbusinesswhilegrowing The Companyeventuallyexpandedintothe U.S. basedcompanies. the 1960sand1970s,faraheadofother expanded intoBrazil,IndiaandChinain Under Miller’s leadership,theCompany looking beyonditstraditionalborders. the UnitedStates,Cumminsalsobegan As theCompanycontinuedtogrow in a uniquenationwideserviceorganization. reputation forhighqualityproducts and first profit in1937andsoon developeda its four decades.Cumminswouldearn prominenceinternational overthenext and wentontoleadtheCompany Irwin, becamegeneralmanagerin1934 J. IrwinMiller, great-nephew ofW.G. and durability. that demonstratedtheengine’s power endurance records inthecomingyears helped fuelanumberofspeedand Irwin’s muchneededinfusionofcash SUSTAINABILITY2012–2013 REPORT 9

INTRODUCTION Personality Decisive. Driven to win. Agile. Passionate. Caring. principles Strategic Businesses Leverage Complementary of complementary Cummins is a family for our value businesses that create relationships customers by leveraging technology and applying innovative business boundaries. across Value Shareholder Increase Cummins’ financial success is measured will value. We in shareholder by growth focus on ROE / ROANA and Earnings as the Revenue Growth) (not Growth value. principal drivers of shareholder Growth Seek Profitable by growth Cummins will seek profitable leveraging our assets and capabilities to segments with favorable in market grow Cummins industry dynamics and where can establish an advantage. Relentlessly Pursue Cost Leadership Cummins will pursue an operational strategy of cost leadership. Lead in Critical Technologies Cummins will be the market leader in technologies most critical to our customers’ performance. success and our Company’s Environment the Right Work Create that the physical Cummins will assure is and cultural work environment conducive to excellent performance and continuous improvement. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 10 Motivating people to act like owners, Motivating people to act like owners, working together. Exceeding customer expectations by always being the first to market with the best products. Partnering with our customers they succeed. to make sure do leads Demanding that everything we safer environment. healthier, to a cleaner, wealth for all stakeholders. Creating » » » » » alues Integrity Strive to do what is right and what we say we will do. Innovation ingenuity necessary to make us Apply the creative first. faster, better, Deliver Superior Results Exceed expectations consistently. Responsibility Corporate the communities in which we live. Serve and improve Diversity Embrace the diverse perspectives of all people and honor both with dignity and respect. ment Global Involve Seek a world view and act without boundaries. V We unleash the Power of Cummins by: We » » » » » VISION lives better by Making people’s the Power of Cummins. unleashing mission, Vision, principles and values MISSION

INTRODUCTION and 34in2010. were completed,upfrom 48in2011 106 CommunityImpactSixSigmaProjects and address majorproblems. In2012, community partnersimprove theirefficiency community involvementwork,helpingits The CompanyalsousesSixSigmainits » » » Six SigmahasmeanttoCummins: Here’s aquicklookatwhat business situations. wide rangeofmanufacturingand to identifydefectsandvariationina Six Sigmausesdata-basedanalysis develop newproducts and processes. employees tosolveproblems and a commonlanguageforCummins The business-improvement toolcreated facing somesignificantfinancial problems. in 2000atatimewhentheCompanywas Cummins’ successsinceitwasinitiated Six Sigmahasplayedakeyrole in Six igmaat Cummins » » » by Cummins’customerssince2005. An estimated$858millionwassaved the program wasinitiated. been identifiedatCumminssince Almost $4.35billioninsavingshave since theprocess wasinitiated in2000. how touseSixSigmatoolsatCummins 14,000 peoplehadbeentrainedin As oftheend2012,approximately 10 9 8 7 6 5 4 3 2 1 to improvecustomersatisfaction. develop commonpracticesandapproaches The CumminsOperatingSystemhelps Cummins Operating System SUSTAINABILITY2012–2013 REPORT process improvement method. Use SixSigmaastheprimary solving techniques. Follow commonproblem- Treat preferred suppliersaspartners. Establish therightenvironment. Create functionalexcellence. are availableandcapable. Ensure equipmentandtools promote teamwork. Involve peopleand step oftheprocess. Design qualityinevery physical andinformation). Synchronize flows(material, and provide real value. Put thecustomerfirst 11

INTRODUCTION The Company was honored for its all for The Company was honored including to sustainability, approach around efforts. its extensive environmental RESPONSIBILITY CORPORATE AND ETHICS Cummins was named to the Civic 50, a list of companies that “best use their to improve time, talent and resources the quality of life in their local communities and beyond” in 2012. The list is compiled by Bloomberg, the National Conference on Citizenship and the Points of Light Foundation. Cummins ranked 25th on the list. The Company was named one of the Most Ethical Companies by the World’s Institute in 2013. The Institute Ethisphere evaluates companies’ commitment to ethical leadership, compliance practices This was and corporate responsibility. the sixth consecutive year Cummins was named to the list. Corporate Responsibility magazine named Cummins to its 2012 list of the world’s 100 Best Corporate Citizens. It was the 12th time in the last 13 years that the Company has been named to the list. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 12 ENVIRONMENTAL Cummins was again named to the Dow Jones Sustainability Index in 2012 for The index an eighth consecutive year. of the the top 10 percent represents most sustainable companies world’s rated by Dow Jones over a range of and social economic, environmental factors. responsibility The Company was named to Newsweek’s Rankings list announced in 500 Green Top 2012. The Company finished 64th in the U.S. rankings and 134th in the magazine’s global rankings. That was up 108 spots ranking in 2011. over the Company’s Cummins Limited in India won the Tata Environment 13th Annual Greentech category of the in the silver Award automobile sector in 2013. The award Foundation recognizes by the Greentech waste best practices for effective management and water conservation. Cummins was named Sustainability by Chrysler Group Supplier of the Year LLC during its Annual Strategy Meeting in 2012. Ceremony and Supplier Awards Cummins received recognition in several areas received recognition Cummins including: on sustainability, that touch Our recognition Our

INTRODUCTION of thenation’s mostinnovativeusersof InformationWeek 500,anannuallisting Cummins wasnamedtothe2012 their practicesandpoliciesforwomen. category. WILLevaluatescompaniesfor was theonlywinnerinmanufacturing award withfiveothercorporations,but Forum in2012.TheCompanyshared the for Women inCorporateIndiabytheWILL Cummins IndiawasnamedBestEmployer feedback andinputfrom employers. is developedfrom anonymous employee Cummins ranked20thonthelist,which list ofthe“BestPlacestoWork” in2013. employers, namedCumminstoitsannual Glassdoor Inc.,awebsitethatranks for newhires andsupervisors, andmore. training andaccountabilitymeasures transgender individuals,competency partner benefits,healthcoveragefor for offering equivalencyin spouse and employees. TheCompanywasrecognized gay, bisexual andtransgender(LGBT) U.S. civilrightsorganizationforlesbian, Rights Campaign(HRC),thelargest Corporate EqualityIndexbytheHuman was awarded aperfectscore inthe2013 For theeighthconsecutiveyear, Cummins up from 18thin2012. in 2013.Cumminsranked15thonthelist, magazine foraseventhconsecutiveyear Companies forDiversitybyDiversityInc Cummins wasnamedoneoftheTop 50 WORKPLACE, FINANCIAL they mostadmired from anyindustry. business peopletovoteforthe companies and FarmEquipmentsector. Fortuneasked companies, finishingfourthintheIndustrial magazine’s 2013listofthemostadmired Cummins wasincludedonFortune employees andtheworldatlarge.” success in“servinginvestors,customers, Companies were evaluatedfortheir list ofthe25BestCompaniesinAmerica. named Cumminsatthetopofits2013 special focusonindividualinvestors, investment community”online,witha dedicated tobuildingthe“world’s greatest The MotleyFool,awebsiteforinvestors Cummins wasrankedtopinitscategory. Almost 2,000companiesreceived votes. sell-side analystsparticipatinginasurvey. The Companywasratedbybuy-sideand Institutional Investormagazinein2012. 145 “MostHonored” companies by Cummins wasnamedoneof Cummins wasranked28th. development, trainingandretention. things suchasbenefits,diversity, career a comprehensive questionnaire covering The listiscompiledannuallybasedon to workinInformationTechnology. 2012 asoneoftheTop 100places Cummins InformationTechnology in Computerworld magazineselected innovative usersofinformationtechnology. identifies andhonorsthenation’s most this honorin2007.InformationWeek business technology. Cumminslastreceived SUSTAINABILITY2012–2013 REPORT 13

INTRODUCTION Innovation

Keeping the spirit of innovation alive When a Delaware-based chemical plant was looking for innovative ways to shrink its carbon footprint, it turned to Cummins.

INNOVATION Croda Inc.’s Atlas Point facility will get “This project demonstrates innovation about half the power it needs in 2013 using and environmental commitment by taking a combined heat and power generating a readily available waste product that system from Cummins. The system runs previously served no productive purpose – on methane gas piped in from the nearby in this case landfill gas – and putting it Cherry Island landfill and converts heat to work,” said Delaware Secretary of the produced by the system’s two generators Environment and Energy Collin O’Mara

Construction crews lower a for use in Croda’s operations. at a ground-breaking ceremony in 2012. protective cover around a combined heat and power The project is expected to shrink the The Delaware initiative is merely one generating system at Croda plant’s annual greenhouse gas (GHG) of many innovative projects Cummins Inc., a chemical company in Delaware. The system runs emissions equivalent to removing is working on around the world. on gas from a nearby landfill. 33,000 cars from the road.

14 SUSTAINABILITY REPORT 2012–2013 the Company’s sustainability. for success,innovationiscritical to creating therightworkenvironment program, keepingemployeessafeor through Cummins’CorporateResponsibility products, buildingstronger communities Whether itinvolvestheCompany’s January 2012. and powergenerationsystems,since products, includingengines,components introduced more than60newandupdated at least6percent. Inall,Cummins has capable ofimproving fuelefficiency by of near-market andfuture turbochargers during thesametimeperiodandasuite 3 to6percent fueleconomy improvement with Eatonthatisexpectedtodelivera powertrain packagedevelopedjointly The Companyalsounveiledanew shows inMiamiandShanghai. version oftheQSB6.7duringboat show inMunich,andthenewmarine the QSF3.8andQSM12,atatrade launched twonewoff-highway engines, In thefirstquarterof2013,Company products itconsistentlybrings tomarket. is reflected inthenumber and rangeof Cummins’ commitmenttoinnovation optimizing fueleconomy. boost powerandreduce emissionswhile revolutionary XPIFuelSystems(page16) Variable GeometryTurbochargers and the powertheyneedtosucceed.Cummins’ emissions whileproviding customerswith fuels, recover wasteheatandshrinkGHG generation systemsthatrunonalternative The Companyproduces enginesandpower share oftheheavy-dutyVGTmarket. As aresult, Cumminshasamore than90percent especially wellsuitedforheavy-dutydieselapplications. This makesthedesignmuchmore durableand flow control surface. in thehotgasflow, Cummins’VGThasonemoving simplicity. WhileotherVGTs havemanymovingparts Cummins’ patentedVGTdesignisknownforits exhaust aftertreatment systems. produce heatforchemical reactions criticaltosome economy andcleaneremissions.VGTs alsohelp a broader operatingrange, contributingtobetterfuel Engines withVGTs canachievepeakefficiency over pressure forbetteremissionscontrol. and powertobalanceexhaustpressure againstintake ability tocontrol airflowindependently ofenginespeed Cummins’ Variable GeometryTurbochargers havethe without sacrificingperformance. They haveenabledenginestogetsmallerandlighter air intoenginecylinderstoboostpowerandefficiency. Turbochargers are fan-likedevicesfirstusedtoforce engine emissions. performance andpower, andtoreduce harmful Geometry Turbochargers (VGTs) toimprove engine Cummins hasachievedmanyadvancesinVariable V Innovation inaction SUSTAINABILITY2012–2013 REPORT ariable Geometry Turbochargers 15

INNOVATION ™ “Innovation continues to be fundamental “Innovation continues to be fundamental today and how we are to how we grow said Cummins in the future,” going to grow Tom Chairman and Chief Executive Officer important to really “I think it’s Linebarger. going to sustain the how we are out figure levels of innovation we enjoy today and find new ways to innovate in the future.” BUILDING ON A RICH HISTORY The good news is that Cummins has a rich history of innovation to draw on and the Company has consistently invested and cutting- and development in research edge technology to keep moving forward. Clessie Cummins was an inventor at heart when he started the Company (page 20). A self-taught mechanic who built his first Cummins was awarded car as a teenager, ranging than 30 patents in areas more fuel systems to engine brakes. from most prolific the Company’s Julius Perr, Dr. joined Cummins after fleeing inventor, Communist Hungary in 1956 (page 22). Maintaining something so important to Maintaining something be left to can’t Cummins’ sustainability why in 2013 the Company chance. That’s Cummins to across launched a campaign innovation – one of the Company’s promote being asked Employees are values. six core to See the Future First and Beat the Competition to It! SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 16 in action Innovation XPI Fuel System Cummins’ XPI Fuel System was a significant breakthrough in heavy-duty fuel systems. Perr (page 22) conceived the basic Julius Dr. design, which he originally called the “Flexible Fuel System.” and Efficient fueled At the time, modern heavy-duty engines were originated by “unit injectors” similar to the designs that for with Clessie Cummins – individual fuel injectors combustion takes place. each engine cylinder where being Alternative “common rail” fuel systems, which were more high-speed diesels, were used on some smaller, independently by a powered flexible because they were injection. controlled separate fuel pump with electronically for heavy-duty applications, inefficient But they were fuel economy is a must, and their good where capability was too low for injection pressure emission controls. future common a design that retained Cummins created and efficient rail flexibility but made it much more the maximum increased at the same time greatly was so far above The increase injection pressure. competitors’ capabilities it was named XPI, Injection. high Pressure short for eXtreme XPI allows for a small amount of fuel to be injected the main into the combustion chamber slightly before the chamber noise and prepare injection to reduce for lower emissions. A small injection after the main temperatures. injection can optimize aftertreatment

INNOVATION of approaches. can studyanalmostlimitlessvariety solutions accordingly, Cumminsengineers engineering challengeandthen designing models tofirstanalyzeallaspectsofan By employingsophisticatedcomputer of itstechnicalresearch anddevelopment. which Cumminsusestodayinalmostall foundation forAnalysisLedDesign, That modelingwouldbecomethe modeling ofthedieselengine. was apioneerindetailedcombustion successful entryintoChina,Dr. Lyn to playingakeyrole inCummins’ with theCompany(page23).Inaddition of Research duringhismore than20years Presidentwould becomeCummins’Vice 1968 asaseniortechnicaladvisorand Dr. AlynLyn joinedtheCompanyin including 80stillinusetoday. 300 patentsonengineimprovements, mechanical engineersubmittedmore than Over hismore than40-year career, the even tinyvariations. original designspecificationsto detect engineers cancheckapartagainst the picture ofanenginecomponentso tracker cantakeathree-dimensional The DepartmentofMetrology’s laser of aturbochargerorothercomponents. and weather, totesttheperformance to Columbus,Ind.,includingtraffic a trucktripfrom, say, Denver, Colo., for example,isabletovirtuallyreplicate The Company’s CyberApplicationsLab, highly specializedtoolsatitsdisposal. and theUnitedStatesanumberof Brazil, China,India,theUnitedKingdom Cummins todayhastechnicalcentersin engine inatestcell. of testingthattakesplacewithanactual environment, too,bylimiting theamount the Company. Ithasbeengoodforthe the depthandbreadth ofresearch at Analysis LedDesignhasincreased SUSTAINABILITY2012–2013 REPORT 17 precise measurements. has tomakeextremely of thetoolsCummins a turbocharger. It’s one dimensional pictureof tracker totakeathree- of Metrologyusesalaser the Company’s Department Cummins’ RandyFranklinin

INNOVATION “We have had a very strict schedule have had a very “We requirements of emissions technology Viceover time,” said Cummins President Wall. John Dr. Officer and Chief Technical markets been paced by the leading “We’ve developing markets, and integrated that into and schedule to which gives us a pace delivery. product we now have to “Without driver, that strong own pace for innovation. How do our create we interact with our customers and manage our business to deliver innovative products have that clock ticking on when we don’t the next emissions regulations?” critical than ever believes it will be more Wall Cummins to stay connected to for before engineers its customers so the Company’s even can anticipate their needs and desires when they may not be able to put them into words. to know our markets and need “We individual customers better than anyone need to know our else,” he said. “We technologies better than anyone else and we need to be able to combine those our so we can continue to differentiate in the eyes of our customers.” products has asked Joan Wills, – Director Wall Planning, to work with business Technology units and their leaders within Cummins to capability and culture the processes, create necessary to drive innovation in the future. the importance of listening She is stressing to customers, devoting personnel and and development, to research resources and investing in new technology. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 18 With being engines and components than ever before, asked to do more can be critical. even the slightest variation commitment to research The Company’s unwavering. In 2012, and development is $18 billion in sales from despite a drop midst of a global to $17.3 billion in the the Company economic slowdown, $728 million in invested a record and development, up research 2011. from 16 percent In addition, Cummins and its joint invested over $1 billion in ventures much of it related capital expenditures, to the development of new products. stop investing in technology can’t “We and expect to be in the market in two or Cummins’ said Pat Ward, years,” three – Finance and the Vice President Chief Financial Officer. Company’s FOR INNOVATION CAMPAIGNING Cummins’ campaign for innovation comes at an especially critical time technical function. for the Company’s For most of the past two decades, the biggest driver of technical innovation at the Company has been increasingly in nearly stringent emissions regulations pickup truck engines to every platform, from power generation systems. With emissions levels in most near-zero levels approaching markets, Cummins technical leaders mature thinking a lot about what will drive are innovation over the next 20 or 30 years. assembling work teams. across the organization in across in drawing expertise from in drawing expertise from Act without boundaries DIVERSE TEAM CROSS-FUNCTIONAL concepts evolve. promising concepts as the promising Focus resources on most on Focus resources CAPABLE SORTING CAPABLE RAPID AND and customer opportunities. test understanding of market Test design concepts and Test EVOLUTION AND CONCEPT RAPID PROTOTYPING technical expertise in key areas. develop and sustain deep Visible career paths that Visible career EXPERTISE DEEP TECHNICAL new technologies. to accept and develop Mindset and capacity NEW TECHNOLOGY RECEPTIVE TO profitability for Cummins. profitability Value to customer and Value See product value: See product TECHNOLOGY NEED OPPORTUNITY TO OPPORTUNITY LINK MARKET and market opportunities. Sensing new technology ideas Sensing new technology KS SENSING NETWOR AND INTERNAL EXTERNAL Cummins at Innovation of Seven Enablers INNOVATION will continueforyearstocome.” and thatCummins’legacyofinnovation our globalmarkets.I’mconfidentwecan adapt ourproduct innovationexpertiseto customer-focused approach, wehaveto transition from anemission-toamore all overtheCompany,” said.“As we Wills “We havesomeincredible workhappening the systematchemicalplant. produce nearlytwiceasmuch energyas the treatment plant.Thenew project will Cherry Islandlandfillanddigestergasfrom will befueledbyablendofgasfrom the That system,tobecompletedin2014, waste watertreatment plant. system attheCityofWilmington’s to installacombinedheatandpower on anevenbigger, more complexproject good example.Work isalready underway The Delaware landfillgas project isa extremely bright. and wellatCumminsthefuture is mind thatthespiritofinnovationisalive saidthere isnoquestioninher Wills and wejustcan’t afford toletthathappen.” they cangetpushedtothebackburner crush ofmeetingday-to-daydeadlines, familiar tomany,” said.“Butinthe Wills innovation, sotheseenablerswillseem “Cummins hasarichhistoryofproduct about what’s ahead. leaders andemployeesastheythink (page 18)tohelpguideCompany list of“CumminsInnovationEnablers” andherstaff havedevelopeda Wills heavy-duty dieselenginesbetter thananyoneelse. differently from othersbecausetheCompanyunderstood Geometry Turbochargers, forexample,were designed customers, too.TheCompany’s market-leading Variable Cummins todeliverbetterdesignscomponent The Company’s comprehensive approach enables service systemsandequipmentmanufacturers. They deliverinformationandtakeinputfrom operators, into vehicles,equipment,buildingsandpowersystems. efficiently andtointegrateCummins’enginesgensets Controls are criticaltooperatesubsystemfunctions PowerCommand digitalcontrols. paralleling systems.TheyallcommunicateviaCummins’ and transferswitchestothecontrols, turbochargersand all ofthekeycomponentsforgensets,from thealternator Cummins PowerGenerationdevelopsandmanufactures engines includesadvancedprognostics anddiagnostics. performance. TheInteractSystemonmostCummins ABS brakes,thetransmissionandmore todelivertop Electronic Control Modulescoordinate engineaccessories, needs are met. hand-in-hand withsystemintegratorstoensure customer with noproprietary boundaries. Subsystemdesignerswork Unlike itscompetitors,Cumminscandesigncomponents systems integration. together hasestablishedCumminsastheindustryleaderin The Company’s experiencewithmakingcomponentswork subsystems required tobuildanengineorgensetin-house. Cummins istheonlycompanythatproduces allofthecritical Systems integration Innovation inaction SUSTAINABILITY2012–2013 REPORT 19

INNOVATION Today, Lyle Cummins is working with the Lyle Today, name to Company that bears his father’s The Company Cummins’ history. preserve in the vault of has established an archive acquired a former bank building it recently in Columbus, Ind. documents will hold pictures, The archive and other artifacts, much of it involving the founding of the Company in 1919 and the partnership between Columbus Irwin and Clessie businessman W.G. in 1908. Cummins, the driver Irwin hired formal Cummins said his father’s Lyle education ended in the 8th grade after his family moved to Columbus. Clessie told family members he left of school because he was tired than his teachers. knowing more father was in the barrel-making Clessie’s business and the family moved around a lot. One of the constants in Clessie’s was his fascination with life, however, all things mechanical. He loved finding ways to make rural life easier. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 20 “Almost all of Dad’s unique and creative unique and creative “Almost all of Dad’s that to solve problems ideas were Cummins, said Lyle continually arose,” son. “Thus, his life was one Clessie’s adversity.” of innovating through up watching his father at grew Lyle in what some the height of his career, describe as the golden age of American inventors. Clessie Cummins would sometimes swap stories with Henry liked to keep tabs on what who Ford, his younger colleague was doing. Lyle Cummins and Cummins Lyle Chairman and CEO Tom Linebarger cut the ribbon on new space in a former bank building for the Company’s new archive of historical pictures and documents. Clessie Cummins never stopped thinking about how thinking about how never stopped Clessie Cummins From the moment things work better. he could make to working on a first car as a teenager he built his at his California home in the workshop concept engine (1888-1968) pursued innovation in his 70s, Cummins match. with a passion few could Problem solving through innovation through solving Problem

INNOVATION and anaccomplishedauthor historian. on tobecomeanoutstanding engineer long descents.Lyle Cummins wouldgo compressor toslowtrucksdownduring an engineintoapowerabsorbingair preserves traditionalbrakesbyconverting They developedthe“JakeBrake,”which graduate mechanicalengineeringdegree. after Lyle returnedseveralyearslaterfora in schoolandjoinedforces professionally on carsandotherprojects whileLyle was As aresult, fatherandsonworkedtogether while hepursuedanengineeringdegree. Palo AltosoLyle decidedtoliveathome housing atStanford University innearby of militaryveteransledtoashortage Company. At thesametime,aninflux in1945afterleavingthe to California together. Clessie Cumminsmoved particularly closebecausetheyworked Lyle Cumminsandhisfatherwere diesel-powered trucksand buses. aroundby barnstorming thecountryin power andreliability ofhis diesel engines a promotional genius,demonstrating the himself. ButClessieCumminswasalso continued innovating,holdingmanypatents Irwin’sWith financialbacking,Clessie value toourcustomers.” inside theCompanyandtodeliverreal innovation anddevelopmentprocess alive doing movingforward, tokeep adynamic motto. “Andthat’s whatweneedtobe doing,” Wall said,referring toCummins’ Can DependOn,’that’s whatClessiewas “When wetalkabout‘InnovationYou will beinspired byClessie’s story. He saidgenerationsofCumminsengineers Lyle Cumminstopreserve Companyhistory. delighted theCompanyisworkingwith and ChiefTechnical Officer, saidhe’s Dr. JohnWall, President Cummins’Vice SUSTAINABILITY2012–2013 REPORT 21 to Columbus,Ind. an October2012visit of theCompanyduring engine fromtheearlydays restored Cumminsdiesel Cummins’ son,looksata Lyle Cummins,Clessie

INNOVATION He escaped through Austria, dodging He escaped through guards. border and Soviet patrol from fire camp He eventually made it to a refugee in Austria. He became part of a U.S.-Hungarian him which brought program, refugee degree With a master’s to New Jersey. by a in engineering, Perr was recruited number of automotive companies and eventually chose to join Cummins. settled in Columbus, Ind., where Perr Dr. he was joined by his wife Elizabeth, who escaped Hungary in 1958. He then went to work on a host of engine improvements, most involving fuel systems. His patents dealt with fuel injectors, pumps, valves, nozzles and more. In 1969, he was granted amnesty and That enabled allowed to return to Hungary. Perr to complete his doctorate in Dr. the University mechanical engineering from in Budapest in 1972. of Technology improvements over improvements and engine application than 40-year his more 300 patents on engine Cummins, at career including 80 patents that submitted more than submitted more are still in use today. use today. still in are Dr. Julius Perr (1931-2005) Julius Dr. inventor But the story of how he got to A most prolific SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY the Company almost overshadows his illustrious career at Cummins. illustrious career up during grew Perr was born in Hungary, II and was only a teenager when War World his homeland was taken over by the Soviet Union in 1945. He was 25 when he joined the Hungarian Revolution and in the fall of 1956, he and his countrymen briefly Soviet rule. from enjoyed freedom The Soviets quickly crushed the rebellion, and Perr became a wanted man. however, 22 Clessie Cummins got it all started but he was far from the only but he was far from got it all started Clessie Cummins Alyn Julius Perr and Dr. Dr. innovator at Cummins. remarkable the helping Cummins become played key roles in each Lyn on ways, their impact In many leader it is today. technology not only in their inventions be felt today, the Company can still opened for those behind them. but in the doors they Cummins’ innovative giants innovative Cummins’

INNOVATION and ChiefTechnical Officer Dr. John Wall. industry,” President saidCummins’Vice “Dr. Lyn wasanabsolutelioninthe operations inthecountry. navigate theChinesesystemtoestablish 1970s. HewasabletohelptheCompany successful entryintoChinainthemid- Dr. Lyn alsoplayedakeyrole inCummins’ President ofResearch. He eventuallybecameCummins’Vice his expertisetotheCompanyin1968. authorities onenginecombustion,bringing He wasoneoftheworld’s foremost role inCumminshistory many ways. Dr. AlynLyn (1917-2010)playedacritical A lionintheindustry each yearwiththeDr. JuliusPerrAward.” and that’s whywehonorourbestinventors the spiritweneedtokeepaliveinCummins, boss Ieverhad,”Wall added.“That’s partof “He isthemoststimulatingengineering drawing injectordesignsonnapkins. surrounded byyoungengineers and lunchtime, inhisrumpledbluesuit, unusual toseehiminthecafeteriaat and ChiefTechnical Officer. “Itwasnot Dr. JohnWall, President Cummins’Vice was alwaysinventingandteaching,”recalls “Julius hadaveryactivemind–andhe highest honorfortechnicalinnovation. Dr. JuliusPerrAwards are Cummins’ for younginventors.Today, theannual Patent Office fortheexampleheset Dr. PerrwascommendedbytheU.S. and diversity. of Cummins’core values:innovation at Tsinghua University, buildsontwo scholarship forwomeninengineering The Dr. Lyn Scholarship,thefirst China’s foremost technicaluniversity. female studentsstudyengineeringat outstanding butfinanciallychallenged Beijing. Thescholarshiphelpsacademically by CumminsatTsinghua Universityin on intheDr. Lyn Scholarship,sponsored consultant until1990.Hislegacylives with theCompanyasapart-time Lyn retired in1982althoughhecontinued Cummins andmovedtotheUnitedStates. in theUnitedKingdom.Helaterjoined the firstChineseuniversityprofessor King’s CollegeinLondon,becoming obtained adoctorateofsciencefrom He workedatRollsRoyceandthen of LondonintheUnitedKingdom. mechanical engineeringattheUniversity his master’s degree andhisdoctoratein mechanical engineering,Lyn completed China, withadegree in University inBeijing, from Tsinghua After graduating including me.” combustion, field ofengine working inthe engineers to manyyoung “He wasamentor SUSTAINABILITY2012–2013 REPORT 23

INNOVATION Vehicle fleets and equipment operators are fleets and equipment operators are Vehicle alternative exploring already fuels to reduce operating costs, or adapt emissions, improve is This trend to locally available fuel sources. expected to continue over the next decade. Natural gas has emerged as the most promising alternative fuel for many market segments. expanded New drilling techniques have greatly and have significantly natural gas production fuel costs. reduced For example, in the United States, about of new transit buses and 50 percent 15 percent operate on natural trucks currently new refuse of gas. Meanwhile, industry assessments predict that natural gas adoption rates in the United States for the on-highway truck market may by 2018 with be between 10 and 20 percent further upside beyond that. of natural gas Cummins is a leading producer engines and components for a wide variety of markets, including trucks and buses, oil and and electric power generation. gas production 10 years out Alternative fuels emissions 2 is a key contributor to 2

2 SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 24 emissions and fuel efficiency. CO emissions and fuel efficiency. emissions and fuel consumption. 2 2 emissions and fuel consumption In late 2012, Cummins announced its ISX15 engine had In late 2012, Cummins announced its ISX15 from the U.S. Environmental the first certification received gas (GHG) for new greenhouse Agency (EPA) Protection regulations those rules, a full year before and fuel-efficiency in 2014. The ISX15, the top-selling engine in the take effect fuel heavy-duty truck market, will achieve up to a 2 percent over its predecessor. economy improvement in 2016 and 2017 will to meeting regulations The approach will be new requirements be largely the same as in 2014. There in required diagnostics and further improvements for on-board CO global warming. CO to reduce Possible technology improvements The near future will continue revolving around reducing reducing around will continue revolving The near future CO Reducing CO 5 years out beyond 2017 could include converting waste heat from beyond 2017 could include converting waste heat from to capture hybrid powertrains the engine into useful energy, energy lost in braking and deceleration, advanced combustion, and fuel systems. to the aftertreatment and improvements We asked some of the Company’s technical leaders technical leaders the Company’s asked some of We years five, 10 and 15 at Cummins to look at innovation what they said: a quick look at Here’s into the future. The future of innovation at Cummins of innovation future The

INNOVATION » » Also inthedevelopmentpipeline: on renewable fuels. These engineswillalsobecapableofrunning generation systemsby20percent by2018. improve theefficiency ofnaturalgaspowered Cummins isalsoworkingontechnologyto fuels. significant commitmenttoalternative life, sothesenewproducts represent a $10 millionto$50overtheprogram A newenginerequires aninvestmentof develop severalnewengines. the Companyrecently announced plansto line rangesfrom 50to2,700 horsepower, and Cummins’ current naturalgas engineproduct » » gas derivedfrom agriculturalwaste. and municipalwasteasfeedstock and Engines fueledbygasthatuses sewage 2017 product. from thefuelconsumptionof fuel consumptionby10to15percent Technology toreduce longhaultruck power sources Integrating 15 yearsout a more efficient mannerthanconventional peakingpowerplants. a highpenetration ofrenewable energymuch fasterandin generator setscouldbeusedto “firm”orsupportgridswith Such asystemwouldloweroperating costs.AndCummins’ offer manybenefits. natural gasenginetocreate astandaloneenergysystem could of powerbythemselves.Butusingwindorsolarwithadiesel or andsolar,Wind forexample,cannotprovide acontinuousoutput traditional generatorswithrenewable formsofenergy. at thepointofconsumptionopensuppossibilityintegrating Distributed generationtechnologythatallowsenergyproduction storing anddistributingpowerorconnectedtoestablishedgrids. operating eitherasautonomous“microgrids” capableof including renewable forms ofenergyare onthehorizon, Small powersystemsthatdrawfrom multipleenergysources source offuel. of twokindsenergy–usuallyelectricityandheatfrom asingle systems forsometime.CHP, orcogeneration,istheproduction business, hasbeeninstallingcombinedheatandpower(CHP) Cummins EnergySolutionsBusiness,partofitsPowerGeneration issue in15years.Cumminsispreparing nowtomeetthatneed. wind andsolarisgaininginterest todayandwilllikelybeakey powergeneratedfromHarnessing renewable energysources like SUSTAINABILITY2012–2013 REPORT 25

INNOVATION The truck also includes a system that converts exhaust heat into power delivered that controls to the crankshaft, electronic information to optimize fuel use, use route and lighter- resistance with lower rolling tires weight material throughout. testing “Many of the technologies we are on the concept engine and truck will be integral parts of the trucks of tomorrow,” said David Koeberlein, Principal Investigator at Cummins. program for the SuperTruck by a The Class 8 Peterbilt 587 powered Cummins ISX15 engine averaged 9.9 mpg over 11 runs meeting SAE International test SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 26 The “SuperTruck” achieved a 54 percent achieved a 54 percent The “SuperTruck” averaging nearly in fuel economy, increase 10 miles per gallon during testing along U.S. and Vernon. Route 287 between Fort Worth The truck also demonstrated a 61 percent compared efficiency in freight improvement to a baseline truck driving the same route. result significantly efficiency The freight SuperTruck exceeded the 50 percent goal set by the Department program is efficiency of Energy (DOE). Freight an important metric in the transportation industry that is based on payload weight and fuel efficiency. The concept “SuperTruck” The concept “SuperTruck” outside Peterbilt Motors headquarters Company’s The truck in Denton, Texas. recorded impressive results in fuel economy and freight efficiency. The concept truck featuring a higher efficiency engine higher efficiency engine truck featuring a The concept by Cummins developed tractor-trailer and an aerodynamic Company turned some heads during and Peterbilt Motors on a U.S. highway in Texas. testing in the fall of 2012 : Update start to impressive off ‘SuperTruck’ ment Environ

ENVIRONMENT support comingthrough awarded their SuperTruck program, withcritical in privatefundsoverthefour-year lifeof partners willhaveinvested$38.8million Cummins, Peterbiltandtheirprogram innovation inthetruckingindustry. a public-privateeffort tofurtherstimulate 21st CenturyTruck Partnership,whichis is oneofseveralinitiativesunderthe DOE’s SuperTruck project. SuperTruck one offourteamsparticipatinginthe Cummins isaprimecontractorleading on U.S.roads today. 2 millionregistered tractor-trailers estimates thatthere are about given AmericanTrucking Association greenhouse gasesare enormous, The potentialsavingsinfueland annual greenhouse gasemissions pertruck. translate intoa35percent reduction in 120,000 milesperyear. Itwouldalso fuel pricesforalong-haultrucktraveling $25,000 annuallybasedontoday’s diesel increase infueleconomywould saveabout between 5.5and6.5mpg.The54percent Today’s long-haultruckstypicallyachieve gross weightof65,000pounds. The tractor-trailer hadacombined standards alonga312-mileroute. air conditioningandsmallappliances. but stillneedpowerforsuchthings as including timeswhendriversare atrest the tractor-trailer overa24-hourperiod; Peterbilt 579thatwilladdress useof Testing willcontinuein2013onanew to accomplish.” with whatourteamhasbeenable at Peterbilt.“We’ve beenverypleased Chief EngineerofProduct Development said ScottNewhouse,SeniorAssistant contributor totheefficiency gains,” “Aerodynamics hasbeena significant additional fueleconomybenefits. further enginedownspeedingfor Eaton’s advancedtransmissionfacilitates to thetruck’s aerodynamics. Meanwhile, system andweightreduction inaddition in thedrivetrain,idlemanagement working withitspartnersonimprovements Peterbilt, adivisionofPaccar, hasbeen changes inthecombustionsystem. institutions toalsodevelopnumerous several othercompaniesandresearch powertrain. Theyhavebeenworkingwith on theengineanditsintegrationwith Cummins personnelhavebeenfocused Energy’s Vehicle Technologies Program. matching grantsfrom theDepartmentof SUSTAINABILITY2012–2013 REPORT 27 to Columbusin2012. during aSuperTruck visit Research &Technology, Wayne Eckerle,VicePresident– Principal Investigatorand David Koeberlein,SuperTruck Advanced Engineering; Vehicle ApplicationsLeader– members JonDickson, Cummins SuperTruck team Innovation Points of Environment » » » » » » mark (page26). 10 miles-per-gallon SuperTruck nears its waste(page42). nearly 90percent of Cummins isrecycling water use(page 53). Mexico plantsslash

ENVIRONMENT

market. This approach builds on the market. This approach emissions compliance work Cummins has historically done, but adds a very important, element to all-encompassing regional have the right technology, customers ensure at the right time and in the right places. Engines Cummins on-highway engines have by the U.S. Environmental been regulated and similar Agency (EPA) Protection the world for agencies around regulatory combustion emissions since the 1970s. Regulated emissions include nitrogen oxide (NOx), carbon monoxide (CO), (HC) and particulate hydrocarbons matter (PM), also known as soot. Engines have come a long way in a on- short time period. Today’s relatively highway diesel engines emit 90 percent to emissions less PM and NOx compared than a decade ago. just a little more from SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 28 As the only independent engine with the in-house capability manufacturer all major engine systems, to produce the best solution Cummins can provide all applications. to customers across diverse product The Company’s portfolio meets or exceeds all emissions while delivering superior fuel requirements At the same time, it delivers the economy. and durability that performance, reliability customers demand. environmental is a push for stronger There by governmentsregulations in almost the world. Meeting every country around is a critical element emissions regulations of Cummins’ global success. The Company believes its technical expertise gives Cummins a competitive advantage in this business environment. goal is to develop the best The Company’s technical solutions and business processes to meet customers’ needs in each individual practices and partnerships. This report now takes an in-depth an in-depth report now takes This and partnerships. practices the environment. impact on and their Cummins products look at Cummins pursues environmental sustainability through its products, through its sustainability pursues environmental Cummins // Products Sustainability ental m Environ Cummins is able to provide the most appropriate emissions most appropriate emissions is able to provide the Cummins it servescontrol for each market because of the Company’s research, fuel systems, air- leadership in combustion filtration and aftertreatment. handling systems, electronics, Products

ENVIRONMENT and thePMstandard (0.01g/bhp-hr). brake-horsepower hour(g/bhp-hr)) EPA’s NOxstandard (0.20grams per sold intheUnitedStateshadto meetthe In 2010,allheavy-dutyon-highwayengines PM levelsby90percent compared to2004. world, reducing bothallowableNOxand stringent emissionsregulations inthe Agency hasestablishedthemost The U.S.Environmental Protection ON-HIGHWAY ENGINES Cummins’ highestpriority. and therightthingforenvironment is Doing boththerightthingforcustomers to runona20percent blend ofbiodiesel. engines produced todayare equipped development ofbiodiesel.AllCummins’ The Companyhasalsosupportedthe a keycontributortoglobalwarming. their outputofcarbondioxide(CO highway customers,ultimatelyreducing economy fortheCompany’s on-andoff- has enabledittodeliverexceptionalfuel The Company’s commitmenttoinnovation filtration, airhandling,andaftertreatment. as combustion,controls, fuel systems, of integratedsubsystemtechnologysuch technology, pioneeringthedesignanduse Cummins hasbeenaleaderincleandiesel 2 ), board diagnosticcontrols withadditional but alsothephase-inofadvancedon- near-zero NOxandPMemissions, The 2010regulations notonly required previous industryleadingISX engine. reliability compared toCummins’ and best-in-classdrivability performance, fasterthrottle response greater fueleconomy, stronger The engineprovides upto 6percent heavy-duty commercial tractor-trailers. the ISX15engineforusein18-wheel the Companysuccessfullyintroduced to meetthesenewstandards. In2010, Cummins wasamongthefirstcompanies SUSTAINABILITY2012–2013 REPORT ISX12 29 Louisville, Ky., inMarch2013. Mid-America Trucking Showin 6 percentisdisplayedatthe improve fueleconomyby3to Cummins andEatonthatwill A newpowertrainpackageby ISX15

ENVIRONMENT

® Series automated ™ . The off-highway business has . The off-highway 2 Fuller Advantage transmission with new Cummins ISX15 will ratings. The product SmartTorque2 be available in the fall of 2013 for line- haul and less-than- haul, regional applications. truckload (LTL) ENGINES OFF-HIGHWAY years, the North American In only three industrial markets have and European been faced with the challenge of emissions transitioning to near-zero by 2014. This challenged Cummins to look beyond basic engine technologies to fuel systems, such as high pressure areas and advanced turbocharging, electronics systems to further reduce aftertreatment engine emissions. off-highway innovations not only helped The resulting but also led to meet the latest regulations, that produce products fuel efficient to more less CO For the heavy-duty pickup truck market, pickup truck For the heavy-duty trucks using the 2013 Ram heavy-duty turbo diesel and SCR a 6.7-liter Cummins 10 percent will get at least aftertreatment (depending on duty better fuel economy year 2012 truck. cycle) than a model a The Company also announced for the North new powertrain package truck market in American heavy-duty 2013 that is expected to deliver a 3 to fuel economy improvement, 6 percent maintenance costs, lower preventive total lifecycle cost. and reduce combines an Eaton The new product

2 SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 30 sensors to monitor the effectiveness of of monitor the effectiveness sensors to the engine. systems on emission-control drivers if diagnostics alert The on-board and need to devices fail emission-reduction diagnostics In 2013, on-board be repaired. Cummins’ across have been implemented the for line of on-highway products entire United States. gas greenhouse Beginning in 2014, new rules will take effect and fuel-efficiency for all on-highway engines in the United States. Cummins ISX15 was the first certification engine to achieve EPA – (page 40) for the new standards a full year ahead of schedule. up to 2 percent The engine provides economy than the 2012 fuel greater model year engine, and maintains its best-in-class drivability and reliability. the Cummins XPI fuel The ISX15 features system, the next generation of Exhaust Gas Geometry (EGR), a Variable Recirculation and Cummins Aftertreatment Turbocharger System that incorporates a Diesel Particulate Filter and Selective Catalytic Reduction (SCR) technology to reduce CO emissions. Each ISX15 can reduce emissions by up to 12 metric tons per to a 2007 ISX engine. year compared the new In 2012, Cummins introduced ISX12 engine for the vocational and work- truck market, emergency vehicles and motor coach applications. The engine is designed to deliver better fuel economy, and durability in performance, reliability a compact design. manufacturing capability. environment and local environment requirements, the local service requirements, local product and application local product markets, taking into account power needs of specific be adapted to meet the of technologies that can Cummins has a portfolio understand their needs. listen to customers and approach, but a strategy to approach, This is not a one-size-fits-all market in every global region. market in every global region. the right capability for each cost-effective products with products cost-effective and technologies to deliver Company’s knowledge, tools knowledge, Company’s requirements by using the requirements strategy to meet customer strategy to meet customer Fit for Market is a Cummins Fit for Market is a Cummins Market strategy Cummins’ Fit for ENVIRONMENT from aclean-sheetdesign andfillvery QSF3.8 andtheQSM12were developed 4Finalfrom 49to675hp.Thenew Tier the Company’s fullproduct lineupfor show inMunich,Germany, completing two additionalenginesatamajortrade In Aprilof2013,Cumminsintroduced to meetapplicableregulations. systems thatrequire noactiveregeneration They are equippedwithaftertreatment an impacttothecustomeraspossible. emissions control inmind and asminimal engines were designedwith advanced 4,200 hpwiththeQSK95.Bothofthese down to49hpwiththeQSF2.8andup end ofthehorsepowerspectrum, off-highway poweroffering ateach Since 2011,Cumminsextendedits without anyconstraints. engines, designedfrom thebeginning by launchingmultiple“clean-sheet” emissions andimproving fueleconomy gone beyondsimplyreducing engine greenhouse gasandfuelefficiency rules the agency’s 2013regulations andnew ISX12 Genginefrom theEPA, meetingboth 2013 thatithadreceived certification forits The jointventure announced inearly highway commercial vehicles. provider ofnaturalgasengines foron- partnership astheleadingNorthAmerican bus manufacturers, establishing thejoint options from more than50truckand engines are availableasfactory-installed Cummins Westport’s naturalgas Inc. ofVancouver, BritishColumbia,in2001. was establishedwithWestport Innovations Westport Inc.Thejointventure partnership its enginebusinessandthrough Cummins full lineofnaturalgasengines,boththrough available, Cumminshasbeendevelopinga As naturalgashasbecomeincreasingly NATURAL GASENGINES customer demands. specific powerdensitiestomeet SUSTAINABILITY2012–2013 REPORT 31

show inMunich,Germany. at theBauma2013trade QSF3.8 andQSM12engines stand betweenthenew Growth Program,JerlPurcell, Director oftheHeavy-Duty Linebarger andtheExecutive Chairman andCEOTom

ENVIRONMENT 800 hp to 3500 hp (597-2610 kW) for 3500 hp (597-2610 800 hp to The first in the high-horsepower markets. portfolio, QSK50 Tierproduct 2 for oil and will begin gas well servicing applications, other QSK in mid-2013, with production engines including Series engines to follow, EPA capable of meeting upcoming Tier emissions regulations. 4 Final nearly that by 2020, Cummins projects of its high horsepower engine 30 percent will be natural gas due to the production abundance of the fuel and its increasing low cost. relatively working on a natural Cummins is currently gas version of the QSK95, a 95-liter engine unveiled in 2011 that will be the largest high-speed diesel engine the Company has ever built. The Company is also developing a 15-liter heavy-duty natural gas engine for on- highway applications. That engine is by 2016. expected to be in production SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 32 taking effect in 2014. Limited production Limited production in 2014. taking effect began in April, of the natural gas engine August 2013. to start in with full production Cummins earlier, About five months announced it had started Westport engine, development on another natural gas the ISB6.7 G. The 6.7-liter ISB6.7 engine is based on Cummins gas version diesel engine. The natural by 2015. is expected to be in production by Cummins Westport The engines offered 5.9-liters to the 12-liter range in size from ISX12 G now entering production. Independent of the joint venture, the Cummins Engine Business Unit has been building natural gas engines for many years, especially in the High Horsepower business, Company’s primarily for power generation and gas customers. compression Cummins announced plans Last year, dual fuel engines from to produce These employees are part of the high tech processes Cummins uses to reclaim 50 million pounds of product annually through its remanufacturing initiatives. Remanufacturing requires less energy than producing new parts and keeps Cummins’ product out of landfills.

ENVIRONMENT reductions. Inadditiontotheenergy savings equatetogreenhouse gas chain isfossil-fuelbased,theenergy Cummins andintheCompany’s supply Since mostoftheenergyusedat to makeanewblockiseliminated. transportation, casting,andmachining consumed intheore mining,processing, for example,canbereused, theenergy a brandnewproduct. Ifanengineblock, 85 percent lessenergythanmanufacturing Remanufacturing requires about quality upgrades. “up-cycled” toincludedesignand remanufactured products are often policies andprocedures. Cummins’ guidelines andremanufacturing-specific of salvagetechnology, componentreuse and partsthrough thecommon application The Companyremanufactures engines and 2,000enginepartnumbers. The businessoffers 1,000 components 200 millionpoundsofGHGemissions. pounds ofproduct in2012 andavoided remanufacturing reclaimed 50million approximately $1billionin 2012. Cummins in remanufacturing, withsalesof Cummins isanindustryleader be usedtomanufacture newproducts. and savingenergythatwouldotherwise Company product thatendsupinlandfills use, significantly reducing theamountof useful lifeandreturnsthemtoproductive engines andpartsattheendoftheir Through remanufacturing, Cumminstakes REMANUF ACTURING harmless elements. components into can convertexhaust and innovativetechnology exhaust andhoweffective to understandingengine based onyearsofdedication and off-highway applications products foron-highway The businessdevelopsaftertreatment around theworld. to itscustomers’distinctiveneeds developing emissions-related solutions CES hasquicklybuiltareputation for A subsidiaryofCumminssince2002, no strangertoglobalemissionschallenges. Cummins EmissionSolutions(CES)is CUMMINS EMISSIONSOLUTIONS extended lifeofaremanufactured engine. example, canbeupdatedtomatchthe equipment. Thevehicleandchassis,for extend thelifeofanentire piece of components canalsocost-effectively Finally, theuse ofremanufactured warranties, partsavailabilityandservice. parts andenginescomebackedby remanufacturing process. Remanufactured these upgradesare oftenincludedinthe component wasinitiallyproduced and improvements haveoccurred sincethe and durabilitybecauseoftenproduct Remanufactured partscanimprove power Cummins waterreclamation initiatives. reduces landfillwasteandfurthersupports and GHGsavings,remanufacturing SUSTAINABILITY2012–2013 REPORT 33 emissions tonear-zero levels. reduce harmfulengine systems. Thesystemshelp aftertreatment industry-leading Cummins EmissionSolutions’ dosing unit(above)arepartof This ureasupplyunit(left)and

ENVIRONMENT , designed for engines ™ operating under the stringent requirements operating under the stringent requirements and European of the very latest EPA emissions standards. A first for fuel filtration, NanoNet traps particles at of all hard 98.7 percent – 12 times smaller than the 4 microns smallest particle visible to the human eye. unmatched media provides This proprietary high pressure for today’s protection common rail fuel systems essential to clean emissions. FILTRATION CUMMINS quality, high Cummins Filtration provides filtration high performance integrated equipment, system solutions to protect customers the best possible offering of mindful solutions while remaining to the environment. its responsibilities introduced The business recently based its advanced nanotechnology media, NanoNet SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 34 Cummins Filtration’s User Friendly Filter Cummins Filtration’s first products to is one of the Company’s be developed using full life-cycle analysis, assessing its environmental impact at all life. stages of the product’s In 2012, the Brazilian market saw its Brazilian market saw In 2012, the into regulations come first emissions the V regulations, Equivalent to Euro play. Selective required P-7 regulations Proconve (SCR) technology to Catalytic Reduction Withmeet emissions limits. over 40 billion experience, Cummins miles of SCR system well positioned to Emission Solutions was during this launch. support its customers (diesel SCR systems, coupled with urea exhaust fluid) dosing technologies, convert (NOx), which can cause oxides of nitrogen smog and acid rain, into harmless nitrogen emissions In many mature gas and water. markets such as North America and combined with systems are SCR Europe, a diesel particulate filter and an oxidation of catalyst which aid in the regulation particulate matter (PM), or soot. In the latter half of 2012, CES focused on in its portfolio. integrating a new product The acquisition of Hilite International’s a liquid- SCR division in July introduced dosing system into Cummins only urea line. Emission Solutions’ product Dosing This EcoFit UL2 Liquid-Only Urea additional flexibility and System offers ease of integration to customers.

ENVIRONMENT Entering itssecondyear, theFleetguard does business. environmentally sensitiveinthewayit Cummins Filtrationalsostrivestobe » » » innovations including: that hasresulted inanumberofother Filtration hasakeytechnologyadvantage part ofanenginecompany, Cummins As theonlyfiltermanufacturer thatis responsible. In2012,over670tons customers tobeenvironmentally Filtering Change Filter RecyclingManagementProgram, » » » filters nolonger require painting. volatile organiccompoundsbecausethe maintenance. Thedesignalsoreduces waste materialduringregular fuelsystem the engineandreduces the amountof This provides maximumprotection for then containedwithinareusable housing. two filtersinasinglecartridge,whichis Filter-in-Filter –Thisproduct combines of thisairpollutionsource is critical. 25 percent oftotalemissions, control emissions cancontributeupto fumes. Sincecrankcasehydrocarbon 100 percent ofenginecompartment to 95percent ofaerosol vaporsand filter upto100percent of oil drip,up Crankcase Ventilation –Thesesystems U.S. FoodandDrugAdministration. hazardous andnon-poisonousbythe Propylene glycolisrecognized asnon- amines, phosphatesorsilicates. glycol coolant,itcontainsnonitrites, PG Platinum ™ ™ –ANAPSfree propylene , continuestoenable ®

are discoveringtheycanconvertthese and otherwastefuelsource owners choice. Landfill,wastewatertreatment wasted are of becomingthealternatives Gaseous fuelsthatwouldotherwisebe from waste. and environmentally responsible energy more businessesare producing profitable and maximizecost-efficiency, more and In thedrivetomeetemissionsstandards Waste toenergy comprehensive environmental solutions. that benefitcommunitiesandcontributeto to solvingcustomers’powerneedsinways Cummins PowerGenerationiscommitted Power Generation to produce otherfiltercomponents. the 25,000tonsofmini-millsteelused recycled metalalongwith 80 percent of used toproduce filtershells comesfrom Filtration’s 75,000tonsofintegratedsteel Currently, 20percent ofCummins Cummins Filtration’s sourcing decisions. Recycling contentisimportantto throughout theUnitedStates andglobally. with servicecentersandfleetlocations management program aimedatpartnering manufacturer recycling toinitiateaninternal Cummins Filtrationremains theonlyfilter of greenhouse gasemissions. to about745avoidedmetrictons set byCumminsFiltration.Thisequates more thanfourtimestheyear-end goal were recycled through theprogram, of filters,including546tonssteel, SUSTAINABILITY2012–2013 REPORT 35 be published. after whichafinal report will It issettocontinueforayear testing ona49-footboat. been putinplaceforthefield Development Agreement has A CooperativeResearch and its boats. use 100percent biodiesel in changes wouldbeneededto Coast Guard understandwhat oil. Cumminsishelpingthe animal fatandrecycled cooking sources suchasvegetable oils, made from abroad varietyof Biodiesel isarenewable fuel greenhouse gasemissions. some ofitsvesselstoreduce 100 percent biodieselin Center explored using Research andDevelopment as theU.S.CoastGuard Field testingstartedin2013 biodiesel testing Cummins aidsin

ENVIRONMENT admitted 2 An anaerobic digestion plant on the farm produces the biogas that is then used to power the generator. very low emissions and the system has system that includes a heat recovery exhaust gas heat exchangers. biowaste that otherwise The system reuses would have been disposed in a landfill. of the project The total energy efficiency when is expected to exceed 90 percent fully operational, with some of the electricity sold to the grid. renewable the CO also reduces The project by an estimated into the atmosphere And local farms 7,200 tons per year. output as a natural fertilizer. use the plant’s Cogeneration Cummins’ combined heat and power power to providing (CHP) systems are hospitals, schools, sports complexes the world. facilities around and commercial of two kinds Cogeneration is the production of energy – usually electricity and heat – of fuel. Cogeneration a single source from traditional methods of supplying can replace such as multiple sources energy from SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 36 alternative gaseous fuels into sustainable their and economical electricity – reducing footprint and costs and environmental selling the power generated to create new revenue. low-BTU gas Driving the change are generator sets, which use proven technology to convert these “free” into clean and energy sources economical electricity. example involves an anaerobic A recent farm digestion plant on a 3,500-acre on the east coast of the United Kingdom. Energy Solutions Power Generation’s a system that converts team created renewable mixed biowaste into green, power and heat at Nocton Fen Farm. generator produces The high-efficiency Visiting Cummins employees learn about a high-efficiency Cummins generator that runs on biogas produced from variable biomass feedstock at the Nocton Fen Farm in the United Kingdom.

ENVIRONMENT by BuildingProducts News magazinefor Burgos, Spain.Thehospitalwashonored and TheMuseumofHumanEvolutionin Royal Children’s Hospital,bothinAustralia, at thenewCentre forAgriBioscience and power systems,withrecent installations CCHP (combinedcooling,heatandpower), Cummins alsoprovides trigeneration, or the exhaustandcoolingwaterjacket. recovery systemcapturing theheatfrom to produce electricity, andawasteheat analternator some kindofmachineturning A cogenerationsystemnormallyconsistsof can be30percent ormore. productive useandtotalenergysavings of theenergyinoriginalfuelisputto cogeneration,70to90percent fuel. With to two-thirds oftheenergyinoriginal These more traditionalmethodswasteup heat orsteam. toproduceoil separatelyinafurnace naturalgasor grid whilealsoburning purchasing electricityfrom apower Cummins CorePlus Cummins GeneratorTechnologies expects heavy-duty commercial vehicles. for engineelectrificationinmedium-and Cummins believesthere is astrong market range ofcommercial vehicle applications. technology, designed tobeusedina of itsfirstMotorGeneratorwithCorePlus CGT announcedin2012thedevelopment versatile configurations. robust build,reliable performanceand STAMFORD andAvK –isknownforits (kVA). CGT’s familyofbrands–MARKON, the rangeof0.6to20,000kilovoltamperes offers premium qualityACgeneratorsin Cummins GeneratorTechnologies (CGT) Cummins GeneratorTechnologies healthcare project. levels ofsustainabilityinanAustralian having achievedunprecedented electrification anddriveevengreater will acceleratetheevolutionofengine SUSTAINABILITY2012–2013 REPORT ™ MotorGenerator ™

37 in Burgos,Spain. of HumanEvolutioncomplex and powerforTheMuseum provide heating,cooling gas poweredgenerators Two Cumminsnatural

ENVIRONMENT They continuously monitor the battery monitor the They continuously power restore system and seamlessly fail or a prolonged should battery backup only are Not power outage occur. efficient, fuel more generators generally of the number DC generators reduce fewer batteries onsite batteries needed; issues in fewer environmental result to battery disposal. related Hybrid generators for RVs A hybrid generator set is a great example of how Cummins is using fuel consumption technology to reduce vehicle (RV) owners as by recreational well as noise pollution. By using a combination of inverters, a power unit and coach battery, Cummins Power Generation has been generator fuel consumption able to reduce Power Generation by up to 20 percent. has also been able to cut noise pollution by 5 decibels. While this number might not seem very big, reduction a 40 percent about it represents in audible sound levels. In addition, the hybrid generator weighs up to 374 pounds large diesel less than the Company’s into generators. This translates directly better fuel economy for RVs, which in turn in their carbon footprint. means a reduction SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 38 improvements in vehicle fuel efficiency fuel efficiency in vehicle improvements and emissions reduction. and torque It is available with power, suitable for performance characteristics vehicle designs, hybrid systems, electric and electrical range extender solutions vehicles. These can power generation in commercial a range of be applied across such as buses, vehicle applications vehicles. trucks and off-highway Advanced Medium Mobile Power Sources Cummins’ Advanced Medium Mobile Power (AMMPS) is a new line of mobile Sources power generators for military use whose and logistical benefits include environmental lighter weight, quieter efficiency, fuel greater with a reliability operations and increased lower total lifecycle cost. more 21 percent AMMPS generators are which than their predecessors, fuel efficient saves fuel in both the use of the generators and the transport of fuel to the generators. DC Generators and a cost-effective DC generators offer alternativeenvironmentally-friendly to systems conventional large battery reserve and traditional AC generators used to community access TV, power remote tower sites. telecom and wireless

ENVIRONMENT 2200 3200 100 200 300 400 500 100 200 300 400 500

0 ...... NOx +HC + Hydrocarbons Nitrogen Oxides 2009 20102011 2012 in thousandsofmetrictons Non-road usefulliemissionstotal in thousandsofmetrictons Automotive (on-highway) usefulliemissionstotal NOx Nitrogen Oxides 2009 20102011 2012 produced toEPA standardsfornon-roaduses. The figuresintheoff-highwaychartsarebasedonnumberofmidrange,heavy-dutyandhigh-horsepowerengines number ofengines,bothheavy-dutyandmidrange,manufacturedintheUnitedStatesforon-highwayuseperyear. standards andCummins’estimateofengineemissionsforthepastthreeyears.Estimatesarebasedon The on-highwaychartsforNorthAmericacomparetheestimatedmaximumallowableemissionsbyU.S.EPA Product Emissions CO Carbon Monoxide 2009 20102011 2012 HC Hydrocarbons 2009 20102011 2012 PM Particulate Matter 2009 20102011 2012 CO Carbon Monoxide 2009 20102011 2012

SUSTAINABILITY2012–2013 REPORT ......

. . .

......

. . . 100 150 200 PM Particulate Matter 50 2009 20102011 2012 0 in thousands Diesel enginevolumes (On-highway) Automotive 2009 2010 2011 2012

100 68

109 16 39 144 62

79 68 0 Non-road 2009 2010 2011 2012

24 4 1 Cummins produced EPA allowed

43 9 2 MidRange Heavy-Duty High Horsepower

28 1

11 1 .55

ENVIRONMENT The generator sets range from 680 to The generator sets range from 2,750 kilowatts (kW), and include the industry-leading Mission Critical 2500 kW diesel generator set. The ISX15 is the top-selling engine in the North American heavy-duty truck market. It will deliver higher levels of fuel reliability in 2013. Efficiency and efficiency to the base engine include improvements optimized combustion and high-efficiency fuel and lube pump systems. water, early to market were Cummins’ products outside the United States, too. In September 2012, Cummins unveiled the next generation of diesel and Company’s 6 emissions natural gas engines meeting Euro most stringent is Europe’s 6 Euro standards. to date, applying to emissions standard all new vehicles starting in January 2014. is closely aligned 6 regulation The Euro 2013 standards. with the U.S. EPA’s technology the on build engines 6 Euro “The 2010, enabling EPA and experience from emission products us to develop near-zero running with the best possible fuel efficiency, said Neil Pattison, costs and durability,” – Automotive Engine Business Director the Middle East and Africa. for Europe, SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 40 The ISX15 was the first engine to receive The ISX15 was the first engine to Agency (EPA) Protection U.S. Environmental gas and certification for new greenhouse rules for on-highway engines fuel efficiency in 2014. that take effect The stationary diesel generators, meanwhile, certification for the the EPA’s received and qualify emission standards 4i current under the stricter Tierrequirements 4 Final go into engines that don’t for off-highway 2015. until effect “I am delighted to announce that our Tier 4 interim certified generator sets Tier and fully capable are 4 Final ready of meeting the most exacting EPA years ahead of three requirements Satterthwaite, schedule,” said Tony of the Power Generation President Business and a Cummins Vice President. Cummins’ stationary generators met federal emissions regulations three years early. Cummins’ technical leadership was clearly on display was clearly on display technical leadership Cummins’ engine and the ISX15 the Company’s in 2012 when stationary Generation’s of Cummins Power entire range generators met U.S. EPA high horsepower diesel more early. regulations a year or 15 and 15 and ISX for to market Early diesel generators stationary

ENVIRONMENT reducing carbon emissions. bus ofitskind,improving airqualityand result isthemostenvironmentally friendly pack from theelectricmotors.Theend wasted kineticenergybackinto thebattery Regenerative brakingfeedsotherwise for newelectricdrivemotors. provideswhich inturn electricalcurrent to alithium-phosphatebatterypack, drives ageneratorwhichsuppliesenergy Siemens hybridtransmission.Theengine The Cumminsengineisconnectedtoa buses everplacedinEurope. representing thelargestorder ofhybrid the newbusesovernextfouryears, Wrightbus isexpectedtobuild 600of befitting the21stCentury. by theRoutemastersbutwithfeatures Johnson’s visionofacitybusinspired in keepingwithLondonMayorBoris a contractin2009tobuildprototypes Wrightbus Ireland, inNorthern whichwon Cummins engineersworkedcloselywith hybrid technology. locals andvisitorsusingstate-of-the-art Cummins ISBe4.5-litre engine, hascarried decker Routemastersandpowered bya A newbusinspired bytheoriginaldouble- glimpse of the greener future of London’s iconic bus system. historic VictoriaStationoverthepastyearhavegottena Passengers travellingbetweentheboroughofHackneyand the past,looktofuture New Londonbusescelebrate London andothermajorU.K.cities. there are over400unitsinservice Bus Fundpromoting lowcarbon buses, hybrid buses.SupportedbytheUKGreen Alexander Dennis’Enviro 400 double-deck Cummins’ ISBe4.5-litre engine alsopowers for vehicleoperationsandtheenvironment.” to provide asolutionwhich deliversbenefits the MiddleEastandAfrica.“We are able Automotive EngineBusinessforEurope, project,” saidNeilPattison, Director – and Transport forLondononthisexciting “Cummins ispleasedtoworkwithWrightbus SUSTAINABILITY2012–2013 REPORT 41 Cummins engines. green featuresincluding London butincludesmany Routemaster busesin bus celebratestheiconic This newprototype

ENVIRONMENT Company generated, or just over in 2011. 155,000 metric tons, was recycled Cummins continued at that rate in 2012. “Partners such as Rise along with the dedication and expertise of Cummins we’ve made the reason employees are in our global significant improvements short period waste footprint in a relatively of time,” said Ernie Smith, Corporate Manager for Cummins. Environmental is still much to be done there “However, innovation, creative and it will require a partnerships and most importantly, commitment to avoid waste widespread in all aspects of our operations,” he said. The 2011 analysis showed that about waste profile of the Company’s 60 percent used primarily and steel. Wood, was iron in crates and pallets, accounted for and and general refuse about 14 percent up about 9 percent. each made cardboard Reducing Cummins’ global waste footprint many from effort a focused requires functions within the business. Engineering working on design teams, for example, are the amount of to reduce improvements machining through scrap metal produced and stamping operations. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 42 The Rise employees work on a variety of The Rise employees work on a variety of efforts, recycling tasks including the plant’s recent significantly in which have increased years. Along with other steps, Cummins Power Generation in 2012 eliminated of the solid waste that had 34 percent been going to landfills – an annual cost savings of $28,000. The initiative is just one of many innovative the world ways Cummins facilities around the recycling and reusing reducing, are solid waste the Company produces. study to date The most comprehensive of waste handling at Cummins showed of the waste the that nearly 90 percent Joshua Williams (left) and Matthew Kopacek (right) are two of the workers from Rise, Inc. helping Cummins Power Generation significantly reduce the amount of waste it sends to landfills in the Minneapolis area. In Fridley, Minn., Cummins is making significant strides to significant strides Cummins is making Minn., In Fridley, in part to a partnership waste thanks reduce production helps create job Inc. The local not-for-profit with Rise, who have employment barriers. opportunities for people Cummins innovates to reduce reduce to innovates Cummins waste footprint global

ENVIRONMENT defines azero-disposal site asafacility nearing thataccomplishment.Cummins “zero-disposal” statuswhile othersare Three Cumminsplantshave achieved reduced environmental impacts.” savings, increased productivity and considerable benefitsbywayofcost result, wehavecollaborated toachieve around theworld,”Smithsaid. “Asa suppliers, customersandcommunities (page 51)andhasbeenembracedbyour by ourEnvironmental ManagementSystem “Our focusonwastereduction isdriven paper theyuse,whileincreasing recycling. been workingtoreduce theamountof And office employeesforseveralyearshave incoming products. the amountofpackagingmaterialsusedfor intended toencouragesuppliersminimize sustainable packagingguidelinesthatare Cummins’ purchasing staff isdeveloping intended tominimizethoseimpacts. method usedforagivenwastestream is with wastegeneration,sothemanagement the environmental impacts associated Ultimately, Cummins’ goalistoreduce contains anappropriate energy value. been explored andthewaste material and managementopportunitieshave viable disposaloptiononlyafterreuse wastetocreatethat burn energyasa The Companyconsiderstechnologies » » » The three zero-disposal sitesare: disposed ofbylandfillorincineration. a usefulmanner, leavingnothingtobe that reuses orrecycles allbyproducts in » » » in Quimper, France. The CumminsFiltrationPlant The Darlington(U.K.)EnginePlant The Jamestown(N.Y.) EnginePlant SUSTAINABILITY2012–2013 REPORT 43 can findhardtorecycle. other itemsthatindividuals refrigerators, televisionsand plant parkinglotitemslike residents todropoffinthe they askedColumbus,Ind. by sponsoringadaywhen they extendedthateffort sent tolandfills.In2012, their effortstoreducewaste Engine Plantareknownfor Employees attheColumbus

ENVIRONMENT

Cummins Enterprise Environmental Cummins Enterprise Environmental Management System (EMS) has been the primary driver for environmental and other footprint reductions in Cummins facilities improvements since its inception in 2003 and the global deployment that followed. The Company adopted an innovative to model, deploying a common framework similar look, feel and fundamental a ensure the organization, throughout approach with flexibility to allow individual sites opportunities and businesses to address and risks most important to them. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY Resource conservation Resource Pollution prevention Compliance » » » » 44 » » Cummins is constantly looking for ways environmental to shrink the Company’s footprint and has established a new committee to develop a comprehensive plan with specific goals (page 65). In Company facilities, environmental focused on the are management efforts articulated in Cummins’ areas main three Policy: Corporate Environmental practices and partnerships. This report now takes an in-depth look at an in-depth report now takes This and partnerships. practices stewardship. environmental good practices to promote the Company’s Cummins pursues environmental sustainability through its products, through its sustainability pursues environmental Cummins // Practices Sustainability ental m Environ One way Cummins’ energy leaders save energy is by eliminating inappropriate uses of expensive compressed air and optimizing the efficiency of compressed air systems. Cummins is committed to practicing good is committed to practicing Cummins in keeping with the environmental stewardship mission that “everything we do leads Company’s safer environment.” healthier, to a cleaner, Practices

ENVIRONMENT 100% -70% -50% 50% 0% impact ontheair, landandwater: in 2012toreduce energyuseandits Here’s alookatwhatCumminsdid to trackprogress againstobjectives. support site-levelefforts andscorecards focus areas, thedevelopmentoftoolsto involves improved target-settinginkey Cummins’ emergingeco-efficiency strategy impacts around theglobe. targeting aspecificsetofenvironmental the firstCompany-wideinitiativeofitskind energy andgreenhouse gas represented emissions footprint.Thefocuson Cummins’ comprehensive GHG between 2005and2010basedon a 25percent GHGintensity reduction greenhouse gas(GHG)reduction goal: In 2006,theCompanysetitsfirstformal environmental standards. beyond theISO14001international Cummins’ EMSconformstoandgoes

2005

Normalized GHG Emissions GHG Normalized (intensity)

CMI Revenue (2005 constant $)

2006 Actual GHG Emissions GHG Actual 2007 2008 2009 previously announced goalof40percent This GHGfigure differs from theCompany’s gas (GHG)reduction. equates toa27percent greenhouse reduction from 2005to2015,which a 25percent energyefficiency intensity partner, Cumminshascommittedto more energyefficient by2020.Asa industrial buildingsatleast20percent is tomakeAmericancommercial and The goaloftheBetterBuildingsChallenge reduction strategies. share theresults oftheirenergy to significantly reduce energy useand presidents, andstate local leaders on chiefexecutiveofficers, university a nationalleadershipinitiativethatcalls Buildings Challenge.Thechallengeis is theindustrialcomponentofBetter Buildings, BetterPlantsChallenge,which Department ofEnergy’s (DOE)Better Cummins isapartnerintheU.S. AIR, ENERGYANDCLIMATE CHANGE SUSTAINABILITY2012–2013 REPORT 2010 2011

2012 Normalized Emissions Goal Emissions Normalized 2013 45 been adjusted. in 2008sothe2015goalhas had eliminatedapotentGHG facility wheretheCompany an Ohiolight-dutyfiltration 2005 and2015.Cumminssold (adjusted forrevenue)between emissions by27percent reducing greenhousegas Cummins iscommittedto 2014 GHG reduction goal of-27% 2015

ENVIRONMENT ment Manage Power and procedures Systems savings for energy Lighting “smart” lighting High efficiency operating costs reduces Building Envelope windows, doors, walls Efficient heat gain or loss reduce and roof & Cooling Heating heating, cooling High efficiency systems and recirculation & Equipment Machinery in motors, Substantial improvements air systems pumps and compressed Fuel Usage boilers, Energy efficient burners and test cells Energy Recovery for waste heat Capture use elsewhere productive Improve existing facilities: Improve the energy Cummins has reduced facilities by intensity of the Company’s 2005 to 2012 from almost 34 percent by targeting high-return opportunities. will be more Additional improvements and expensive to implement. difficult Cummins has allocated $20.7 million in capital over 2013-2015 to install sub systems, and meters, expand control equipment. inefficient upgrade or replace Recover test energy: In 2012, the energy use and GHG footprint Company’s somewhat by offset were improvements development testing. product increased will accelerate as Cummins This trend launches high horsepower development mitigate this impact, the To programs. Company has allocated $19.3 million 2013 to 2015 to install test cell from systems at tech energy recovery centers and manufacturing plants. » » » » SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 46 due to the sale of a business in which the due to the sale of a business in which the Company had significantly eliminated GHG. The business, and its associated GHG Cummins’ from was removed reduction, consistent with 2005 baseline inventory, accepted GHG inventory accounting, the Company’s from and therefore 2015 goal accounting. In 2012, global absolute energy consumption at Cummins dropped to 2011, compared by 2 percent gas emissions fell and greenhouse During the by just over 3 percent. global same time period, the Company’s energy intensity (total energy/total revenue) and by almost 2 percent increased GHG emissions intensity (total GHG/total by about 1 percent. increased revenue) investment Cummins has a comprehensive plan designed to achieve the Company’s 2015 energy and GHG intensity goals. in four areas: Cummins is focusing its efforts Conserving at Cummins. issue a key is energy for provide structure seven themes These efforts, energy reduction the Company’s million annually. more than $21 saving How Cummins saves energy saves Cummins How

ENVIRONMENT tons ofCO reduce GHGemissionsby 187,000metric Together, theseefforts are projected to » » geothermal energysystems. compressed airtoimplementing ranging from improvements inhandling were recognized asbest practices, countries. Eightadditionalprojects entered the2012program from nine awards program. Twenty-eight projects is recognized through theCumminsenergy Outstanding energyefficiency performance nearly $16millionperyear. per yearandreduce energycostsby » » Energy Performanceprogram. Department ofEnergy’s Superior North Carolina plantpiloting theU.S. (a fourthisplannedin2014),witha energy standards atthree sitesglobally projects tomeetISO50001 international their sites.Cumminshaslaunchedpilot low andnocostenergyimprovements at and EnergyLeadersare trained tofind Champions program. Energy Champions efficiency through theCompany’s Energy continues todrivesite-levelenergy Energy management:Cummins just meetinglocalbuildingcodes. over whatCumminswouldhavebuilt impact through 2015by21percent improve itsnewconstructionenergy Standards, theCompanyexpectsto with Cummins’GlobalBuilding construction. Byusingthisapproach 189.1 asthedesignbasisforitsnew green building certifications, and ASHRAE most stringentlocallyapplicablecodes, New construction:Cumminsusesthe 2 e (carbondioxideequivalent) * DistributionBusiness Unit wasteincludedonlyin2012totals. establishing formalpackagingguidelines overall wastefootprint.Cumminsis approximately 25percent oftheCompany’s waste isakeytargetbecauseitrepresents through itssupplychain.Packaging improvements inwastemanagement Cummins islookingforcontinued management method. aggressively avoidingdisposalasa waste, increasing recycling ratesand management strategyfocusesonreducing waste footprint.TheCompany’s waste characterized andevaluateditsglobal In 2011,Cumminscomprehensively LAND 10000 15000 20000 25000 in metrictons Total disposedwaste 21,325 MT 18,879 MT 2012 17,708MT 2011 2010 2009 2008 5000 0 SUSTAINABILITY2012–2013 REPORT Metric tons 2008 2009 2010 2011 2012 2010 2009 2008 14,892 MT 18,964 MT

Intensity change to laborhours normalized Disposed waste Total disposedwaste -30% -15% 15% 30% 0% 47

ENVIRONMENT 0.67 0.58 0.73 1.07 1.00 0.82 0.75 0.68 0.87 1.02 104.86 78.52 97.25 103.36 97.25 2008 2009 2010 2011 2012 0 Copper & brass Aluminum Iron 80 60 40 20 120 100 Recycled metals in thousands of metric tons 21 percent reduction in disposal intensity, intensity, in disposal reduction 21 percent over the same normalized to labor hours period. Cummins continued reporting rate. recycling an almost 90 percent Unit waste The Distribution Business but not included in 2012, numbers are prior years. hazardous process Cummins has reduced waste generation in the United States on an absolute basis, by about 48 percent, since 2008. In 2012, Cummins reduced derived hazardous process labor-normalized 2008 levels. from waste by 56 percent 0.43 0.43 0.39 0.58 0.70 0.93 0.80 1.10 1.35 1.26 10.99 8.64 11.49 14.53 16.36 17.87 12.91 17.82 23.58 24.74 2008 2009 2010 2011 2012 0 Paper Wood Plastic Cardboard 50 40 30 20 10 Recycled – non-metals in thousands of metric tons SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 60% 40% 20% 0% -20% -40% -60% 48 and working with internaland working and external size” packaging and suppliers to both “right materials. and recyclable reusable promote focus, of area Scrap metal is another the waste of encompassing 55 percent Company’s in 2012. The Cummins generated groups manufacturing and engineering improve exploring opportunities to are machining of Cummins’ the efficiency and stamping operations. Cummins Using 2008 as a base year, by about 12 percent disposal increased in absolute terms, while experiencing a Total hazardous waste Total Hazardous waste normalized to labor hours Intensity change

198 MT 159 MT Metric tons 2008 2009 2010 2011 2012 0 50 100 150 200 250 2008 2009 2010 97 MT 2011 2012 100 MT 104 MT U.S. process hazardous waste hazardous U.S. process in metric tons

ENVIRONMENT partnerships toreduce waste. employee engagementandsupplier improve wastesegregation andincrease to redesign manufacturingprocesses, Cummins hascompletedmultipleprojects based paints. solvent-based paintswithwater- for example,havesuccessfullyreplaced in paintingoperations.Severalfacilities, management andincreased efficiency waste segregation, improved inventory included product substitutions,improved through amulti-facetedeffort that This substantialreduction wasachieved in billiongallons Total waterwithdrawn 1.05B 1.08B 1.14B 2012 2011 2010 2009 2008 0.0 0.4 0.8 1.2 1.6 2008 2009 2010 2011 2012 2010 2009 2008 Billions ofgallons 1.15 B 1.38 B

Intensity change to laborhours normalized Water withdrawn Total wateruse -50% -30% -10% 10% 30% 50% compared totheirpeers. help sitesevaluatetheirwaterefficiency Company alsodevelopedamethodto metrics. Duringthepastyear, the combining bothleadingandlagging and discharges)waterscorecards exercise thatdefineswaterintakes,uses, conducting facilitywaterbalances(aformal facilities continuetousetoolsthatinclude To sustainthissuccess,Cummins over thatperiod. 47 percent normalizedtolabor hours 24 percent onanabsolute basisor water usereduction isapproximately Over thepastfiveyears,Cummins’total 3.5 percent and2percent, respectively. normalized tolaborhours,byapproximately reduced bothtotalwateruse andwateruse In 2012,theCompanyonceagain Unit (DBU)waterusemetricsin2009. was expandedtouseDistributionBusiness 2008 baselineformanufacturingsitesand data-based decisions.Cumminsusesa metrics thathelptheCompanymake Cummins putsapriorityonanalyzing water management. complexities andchallengesuniqueto to developprograms thatnavigatethe systems, andmore. Cumminscontinues processing, manufacturing,transportation sanitation, powergeneration,rawmaterials that waterisvitaltofoodproduction, sustainability. Theworldisrecognizing for bothenvironmental andsocial Water continuestobeaglobalpriority WATER SUSTAINABILITY2012–2013 REPORT 49

ENVIRONMENT Performing water assessments at 31 select facilities to better define specific water conservation and water risk mitigation opportunities. Embedding water risk management business considerations throughout including site selection, processes building construction, manufacturing selection and supplier process management. for aligning Developing processes water management the Company’s with specific community programs areas. needs, focused on water scarce » » » Using key operating metrics such as operating metrics such Using key and footage, plant population, square heavy as office, type of operations (such manufacturing, manufacturing, light is better able or testing), Cummins internal to understand its greatest improvement opportunities for both and benchmarking. a water The Company has developed strategy consisting of four key components: conservation, business risk, community engagement and supply chain. go well beyond a Cummins’ water efforts conservation focus. In 2011, the Company leading to conducted a global risk screen, assessments at Cummins’ water source highest priority sites located in both India that face water and Mexico, two regions Community efforts challenges. scarcity Wuxi, in water efficiency have promoted China, and water supply development in Manjarsumbha Village, India. Cummins is engaged in several key projects that will further develop the Company’s by: water management efforts » » »

SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY e e e 2 2 50 2 6 7 6 7 7 30 28 29 30 30 81 63 75 74 73 190 171 181 182 177 419 379 414 429 410 115 114 112 115 111 312 278 293 300 279 107 101 121 129 131 2008 2009 2010 2011 2012 2008 2009 2010 2012 2011 0 700 600 500 400 300 200 100

2 U.S. U.S. U.S. Stationary combustion other Electricity, Mobile sources Fugitive SF6, CO Fugitive SF6, Non-U.S. Non-U.S.

U.S. and Non-U.S. GHG emissions in thousands of metric tons CO Total GHG emissions Total tons CO in thousands of metric INDIRECT DIRECT Total GHG emissions Total tons CO in thousands of metric

ENVIRONMENT Cummins GHGemissionsbycountry Cummins GHGemissionsbycountry practice across theCompany. and makeenergyefficiency standard will deliveracommonglobalapproach Energy ManagementStandard, Cummins HSEMS tomeetthenewISO50001 practices andprocedures intothe Beginning in2013,byincorporating registering theirsitesbythe endof2015. and distributors.Theyare committed to encompass manufacturingjointventures HSEMS scopehasbeenextendedto offices aspartoftheHSEMS. Cummins representing 131sitesandcorporate independent auditorcertified82entities, By theendof2012,Company’s Management System(HSEMS). Health, SafetyandEnvironmental Integration tocreate theEnterprise OHSAS SafetyManagementStandard the environment inaccordance with safety processes andprocedures with Cummins hasintegratedhealthand MANAGEENT SYSTE AND ENVIRONMENTAL HEALTH, SAFETY uoe 1% Europe Mexico 4% Other China India 9% 66% United Kingdom United States » » » areas drivespecificactivities suchas: house gases,waterandwaste.Thesefocus along keyresource areas includinggreen- mature, Cumminshasaligned itsefforts As theCompany’s HSEMScontinuesto targets completedtotaled$14.5million. a result ofspecifically-setobjectivesand In 2011,environmental improvements as address site-specificneedsandchallenges. that alignwithCompanyprioritiesbut them toestablishsite-specificobjectives business unitsandsitesthenbuildupon for criticalcorporateinitiatives.Cummins’ the corporateleveltoestablishdirection Broad objectivesandtargetsare setat » » » energy andGHGreduction apriority. the HSEMStoensure sites make Energy: Cumminsleveraged reducing, reusing andrecycling. help minimizewastedisposalby comprehensive wasteinventories to Waste inventories:Sitesdeveloped discharges ofwater. water balancetoidentifykeyusesand Water balances:Sitesdevelopeda 5% 6% 9% SUSTAINABILITY2012–2013 REPORT Cummins GHGemissionsbybusinessunit Cummins GHGemissionsbybusiness 51 msinSltos 2% Emission Solutions Corporate 3% 5% 6% Turbo Technologies Distribution 6% Fuel Systems Filtration 7% 11% 60% Power Generation Engine Business

ENVIRONMENT ICATION PROGRA M FICATION CERTI AUDITOR through measured goals are Environmental party A third audit process. a structured Certification (BVC), Veritas Bureau auditor, enterprise system certifies the Company’s collects. and the data Cummins the audit sampling Cummins supplements conducting annual conducted by BVC by audits using internally trained auditors. Every site is audited on an annual basis. internal Since the launch of the Company’s in 2006, more auditor certification program than 140 HSE and other leaders have been as trained. Of those, 69 have been certified Lead Auditors after successfully completing a series of audits as a team member and audit This structured as an audit leader. validates performance and program a mechanism for HSE auditors provides best practices. to share SAFETY AND HEALTH, ENVIRONMENT AWARDS the Health, In 2005, Cummins created to recognize Awards Safety and Environment employees and sites that excel in the commitment to world class performance stewardship. and environmental their Winners presented of the 2012 awards of Directors to the Cummins Board projects and participated in an exhibition that an opportunity for others in the provided Company to duplicate these best practices. number and quality of the The growing demonstrates that Cummins projects employees embrace and celebrate stewardship. environmental SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 52 For the record as possible about its as transparent Cummins tries to be the Company Over the past year, record. environmental in China and inadvertently installed had a significant spill Ind., at its plant in Seymour, some air handling equipment to the permit then in effect. that did not conform precisely on both cases: is more Here Chongqing spill (CCEC) in The Chongqing Cummins Engine Co. Ltd. an estimated 3,000 to Chongqing, China, released wastewater into the Fenghuang 3,500 gallons of untreated from 2012. Upon discovering the release in March Xi stream immediately tank, plant officials a wastewater treatment plugged source, closed a valve that was identified as the on the site with rainwater outfalls at each transfer station cement and cleaned up the spill. fine in addition to The Company will pay about a $30,000 costs. While the pathway associated cleanup and restoration system has been effectively with the wastewater treatment training at the site to eliminated, Cummins has increased understand the plant’s in key roles personnel ensure impact and how to avoid problems. potential environmental Seymour permit Cummins announced in October 2012 that it paid an $11,250 fine to the state of Indiana because of the technical unit and other non-conformance of a new air-handling Seymour (Ind.) Engine Plant. equipment at the Company’s The equipment installed at the plant as part of a $219 million conform to what was described expansion did not precisely air permit request. in the Company’s Cummins notified the Upon discovery of the discrepancy, Management to inform Indiana Department of Environmental taken to the agency of the issue as well as the measures included Those measures of the problem. avoid reoccurrence Cummins leadership team. environmental the site’s broadening permits for the equipment. has also obtained the proper

ENVIRONMENT swimming poolsperyear. saving theequivalentof10Olympic-sized and theplant’s wastewatertreatment plant, irrigation towhatitcollectsfrom thecistern has beenabletolimitthewateritusesfor She saidsinceJuly2012,theplant irrigation wasonly25percent.” Engineer atthefacility. “In2012, said EdnaEspinoza,Environmental 47 percent ofourtotalconsumption,” “In 2009,waterusedforirrigationwas difference intheplant’s waterconsumption. These stepsandothersare makinga green areas byasmuch50percent. reducing theneedforirrigation in that canabsorbandretain water, with agelthatlookslikegrainsofsugar The planthasalsobeenexperimenting vegetation thatconsumeslesswater. of grasswere replaced withnative Meanwhile, 17,000square meters with acapacityof3,612cubicmeters. They harvestrainwaterfrom acistern to create efficient irrigationmethods. monitoring soilmoisture in green areas in SanLuisPotosí,plantofficials are At CumminsNewandReConParts a varietyofinitiativestousetheresourcewisely. haveimplemented but Cumminsplantsinthecountry Water canbescarceincertain regionsofMexico, wise useofwater Mexico plantsmaking and hisleadershipteam. and GeneralManagerofFuelSystems, Presidentin 2012byRayAmlung,Vice greenhouse, whichwasinaugurated About 20employeescreated the Silva, anemployeeattheplant. and otherlocalinstitutions,”saidAriana eventually donatedtoparks,schools “The trees atthegreenhouse are through atreatment plant. from theproduction lineafteritpasses that isirrigatedwithrecycled water Juárez hasestablishedagreenhouse Meanwhile, theFuelSystemsplantat SUSTAINABILITY2012–2013 REPORT 53 a treatmentplant. line afteritpassesthrough water fromtheproduction that isirrigatedwithrecycled established agreenhouse plant atJuárez,Mexicohas Cummins’ FuelSystems

ENVIRONMENT of Cummins Distribution Business in the Middle East. The new complex is just one example of how Cummins Distribution Business, which sells and distributes Cummins-branded and services all over the world, is products footprint. working to shrink its environmental Australia, for example, the In Sydney, Park distributor won the best Wetherill in Cummins’ annual project energy efficiency competition in 2012. awards environmental its electricity use The distributor reduced gas (GHG) and greenhouse by 44 percent The distributor emissions by 47 percent. implemented facility-wide improvements SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 54 Cummins built its Middle East headquarters Cummins built its Middle East headquarters in Dubai in 2010 and achieved LEED gold certification in 2012 when it finished the Rebuild Center next door – the two by a bridge. Among its connected are sensitive features, many environmentally the complex has its own wastewater oil, fuel and water plant where treatment and water is re-circulated separated are for engine washing. important buildings were green knew “We to Cummins and to the environmental challenges of Dubai, and we wanted to center a model of make our new rebuild zone,” in the free conservation resource said Rachid Ouenniche, Managing Director An engine rebuild is a manufacturing process that includes the complete cleaning, disassembly, inspection and replacing of major components of an engine. Cummins does high horsepower engine rebuilds at its Middle East center. Rebuilding high horsepower engines is an inherently is an inherently high horsepower engines Rebuilding life of an engine. potentially tripling the “green” activity, Horsepower Master High Business Unit’s The Distribution doesn’t stop there in however, Rebuild Center in Dubai, stewardship. practicing good environmental Practicing environmental environmental Practicing world the around stewardship

ENVIRONMENT Electricity useandCO separation andhandlingfacility. improved lightingandabetterwaste of shopoilsandcoolants.Italsohas occur onthesiteandsaferstorage a systemtocapture anyspillsthatmight an environmentally friendly septicsystem, hot waterheater, rainwaterharvesting, The newfacilityfeatures a solar-powered enhance safety. water consumption,prevent pollutionand new branchthatwouldreduce energyand a nearly30-yearoldfacilitytodevelop employees usedtheopportunitytoreplace In Mt.Gambier, Australia,Distribution with lessreliance onportable lighting. the lightinglevelsincreased 70percent it alsoincreased employee satisfactionas New lightingnotonlysavedthesitemoney, as cumulativetotals. electricity generatedeachdayaswell to keepemployeesinformedofthe including asolararraywithLCDdisplays joining theCompany’s energy efficiency Illinois, thedistributor wastednotimein South Dakota,Kansas,Missouri, and States, whichcoversNebraska, Iowa, in CumminsCentralPowerthe United After Cumminsincreased itsownership water usehasdropped 52percent. been reduced by83percent andtotal 2 emissionshave here iseven more precious thanoil.” he said,“andwe oftensaythatwater “Dubai isaverywaterstressed area,” is akeyissue,according toOuenniche. be usedoverandover. Water conservation the cleaningchemicalandrinsewaterto cleaning tankwithareservoir thatenables and anautomatedpartscomponent escaping, reducing energyconsumption, opens andclosestokeepcoolerairfrom things asadeliverydoorthatquickly The Cumminscomplexincludessuch energy efficient buildingsintheworld. the mostrecognized seals ofapproval for Energy andEnvironmental Design),oneof gold certificationfrom LEED (Leadershipin Jebel Alifree tradezonethat hasreceived It isoneofthefewsitesinsprawling That’s certainlytrueatthecomplexinDubai. Cummins employeesaround theworld. environment” isbeingembraced by we doleadstoacleaner, healthier, safer the Company’s mission“thateverything because theybelieveitdemonstratesthat encouraged bywhat’s happening Cummins environmental leaders are and satisfactionsignificantly. Fund, increasing employee engagement Cummins CentralEnergyEfficiency upgrades infivebranchesusing efforts. Ithasimplementedlighting SUSTAINABILITY2012–2013 REPORT 55 Environmental Design). (Leadership inEnergyand certification fromLEED that hasreceivedgold Ali freetradezoneinDubai of thefewsitesinJebel headquarters complexisone The CumminsMiddleEast

ENVIRONMENT Company’s participation in the Department Company’s Better Buildings, Better Plants of Energy’s technical Challenge. The Challenge provides and industrial assistance to commercial building owners. The Company anticipates the energy just the energy efficiency- savings from than will be more in the project measures 61 billion BTUs, which translates into about $604,000 in annual savings. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 56 A “deep energy retrofit” project is underway project A “deep energy retrofit” foot facility at the nearly one million square as part of a corporate-wide commitment The project energy efficiency. to improving combines a suite of energy conservation and necessary infrastructure measures upgrades to achieve significant energy savings and optimal systems performance facility. for the entire Cummins is showcasing the four-year, as part of the $23.8 million project The Jamestown Engine Plant has taken a strategic approach to energy efficiency that combines infrastructure upgrades like a new roof with specific energy efficiency improvements. Major infrastructure upgrades can be very upgrades Major infrastructure capital Engine Plant (JEP) the Jamestown intensive, and over the hadn’t seen many New York in Western changed in 2012, however, last 40 years. All that to energy use. approach including the plant’s Strategic approach to energy saves saves to energy approach Strategic plant N.Y., for Jamestown, millions

ENVIRONMENT controls upgrades.Steamisbeingalmost upgrades, compressed airoptimizationand the project includeheatingandcooling The energyefficiency componentsof equipment were alsoevaluated. and steamusers.Otherpiecesof systems, exhaustfans,dockheaters, air conditioningsystems,ventilation facility basedandincludedairhandlers, significant usesofenergywere primarily thorough siteassessment.Themost Conservation Servicestocompletea with DukeEnergyOneandMazza Prior totheproject, theplant partnered our bestinvestment.” infrastructure improvement project is a phased,wholebuildingenergyand the bestresults. We believeimplementing older equipmentwouldnothavegivenus “Putting energyefficiency upgrades on Myers, facilitiesmanagerforJEP. operational interruptions,”saidRandy incurring significant repair costsand “This equipmenthasbecomeunreliable, heaters andfivesnowmeltsystems. heating andventilatingunits,29dock boilers, related distribution piping,26large This includesthree largegas-fired steam infrastructure withintheplantremains. back to1968.Muchoftheoriginalbase Plant in1974,thoughthefacilitydates Cummins acquired theJamestownEngine roof withimproved thermalinsulation. project’s overallcostwenttowards anew itself inaboutfouryears.Nearlyhalfofthe for energyefficiency isexpectedtopayfor the $3.3millionofproject specifically When allfactorsare takenintoaccount, both sitebeautificationandcarbon capture. and atree plantinginitiativeisachieving more environmentally friendly chemicals annually. Theplanthasmovedtouse saving about4milliongallonsofwater New coolingequipmentwillbeinstalled, goes tothesewerdistrict. treatment effectiveness before thewater contamination andenhancingwastewater water run-off, eliminatingallground JEP’s waterprojects includecontrolling landfill), asignificantaccomplishment. disposal status(nowastedisposedina was thefirstCumminssitetoachievezero Cummins’ environmental mission. Theplant engaged inotherprojects in keepingwith The Jamestownplantisveryactively local variabledemand. small steamgeneratorstomeetlimited processes, however, willrequire three gas units.Afewlocalizedmanufacturing entirely eliminated,replaced bydirect fired SUSTAINABILITY2012–2013 REPORT 57 handlers in2012. four new, moreefficientair user, sotheplantinstalled Air handlerswasonebig significant usesofenergy. to determinetheplant’s most Officials didasiteassessment

ENVIRONMENT

publicly when it was proposed and publicly when it was proposed extensive feedback during provided the comment period. The rule was finalized in August 2011, for that take effect with new standards engines and vehicles starting in 2014. In October 2012, Cummins announced it receive U.S. to was the first manufacturer engine certification for the new GHG EPA one year earlier than required. standards, and industry are Even as regulators in the early stages of implementing the known as Phase 1, work new standards, begun on the Phase 2 rule. has already Cummins is once again taking an active in helping to develop the regulation. role The Company is collaborating with a variety of stakeholders to develop a comprehensive framework of complementary engine building upon and vehicle regulations the solid foundation of the Phase 1 rule GHG and fuel efficiency while recognizing technologies not considered benefits from by the first rule. artnerships SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY Support a balanced global approach. Advocate for incentives to accelerate progress. Promote technology development. Promote Help develop responsible regulations. Help develop responsible » » » » » put into action These principles were during the development of the first-ever gas (GHG) and fuel efficiency greenhouse for heavy-duty and medium-duty standards vehicles in the United States. Cummins was very active in the development of the rule for than four years. The Company formed more with other companies a stakeholder group framework a regulatory wrote in the industry, supported the rule white paper, » 58 » » GLOBAL ENERGY POLICY 10 environmental Four of the Company’s sustainability principles focus on partnerships with legislative and entities to develop sound regulatory Cummins’ public policy to reduce They are: impact on the environment. practices and partnerships. Now this report takes an in-depth look at an in-depth this report takes Now and partnerships. practices how environment. to protect the other groups partners with Company the Cummins pursues environmental sustainability through its products, through its sustainability pursues environmental Cummins // P Sustainability ental m Environ Cummins’ partnerships have helped the Company the Company partnerships have helped Cummins’ use energy more emissions goals, meet its product more. Cummins’ policy advocacy efficiently and much solutions to the has helped bring environmental at just a few examples: a look marketplace. Here’s Partnerships and policy Partnerships

ENVIRONMENT STRATEGY TECHNOLOGY BUSINESS AND ENVIRONMENT DESIGN FOR products around theworld. efficiency regulations for theCompany’s on thepoliciesinvolvingGHGand fuel dedicated resources to focusspecifically regions oftheworld.TheCompanyhas development inEurope, Chinaandother in GHGandfuelefficiency regulatory Cummins isalsobecomingmore involved efficiency improvements. harmonization, GHGreductions andfuel late 2012,keytopicsincludedregulatory At thegroup’s 10thmeetinginTokyo in of heavy-dutyvehiclesandengines. American andJapanesemanufacturers Forum, agroup ofEuropean, North Global Commercial Vehicle Industry the world.Cumminsparticipatesin not onlyintheUnitedStates,butaround principles shapetheCompany’s actions Cummins’ environmental sustainability PRODUCTS IN-USE CUSTOMERS / ENGAGEMENT COMMUNITY EMPLOYEE & & MARKETING EXTERNAL COMMUNICATIONS SUPPLY CHAIN businesses develop new Grow and efficient products Develop clean, employees energy of Harness the C o m p a n y a c t io n s

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ENVIRONMENT The Ultra-Low Carbon Powertrain Carbon Powertrain The Ultra-Low California a partnership with the program, supports Cummins Energy Commission, medium- development of a downsized optimized for E85 duty engine/powertrain a 50 percent target is ethanol. The project a to compared GHG emissions reduction baseline vehicle. diesel-powered » » system-integration Underlying Cummins’ is a valuable portfolio of programs and development collaborative research that team and fund world agreements system at the DOE’s class researchers of national laboratories with their counterparts at Cummins. They jointly work on such things as combustion modeling and diagnostics, materials science and exhaust catalysis fundamentals, biofuels and more. GOVERNMENT RELATIONS Government Relations The Company’s to advocate globally for continues staff and technologies that benefit the products These include fuel efficient environment. generators, combined heat and power systems and natural gas engines. to Cummins is also active in efforts barriers to remanufacturing remove goods globally. and remanufactured In the United States, the Company is leading a coalition whose aim is to continued funding for the Diesel secure Emissions Reduction Act (DERA), which grants or loans to assist local provides governments and others in purchasing engines to meet more diesel-powered or install stringent emission standards systems. emission reduction SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY ARES (Advanced Reciprocating ARES (Advanced Reciprocating Engine Systems) is a multifaceted Cummins is part program research of that involves engine manufacturers, universities and laboratories, research the government. is closing The program in on its final phase of maximum engine and low emissions from efficiency engines natural gas reciprocating for power generation. CHP, a joint Cummins Power Generation/ CHP, is delivering a Engine Business program, packaged natural gas based Combined Heat and Power system for commercial and light industrial applications, than 80 percent achieving more combined efficiency. The ATLAS (Advanced Technology Light (Advanced Technology The ATLAS whose Automotive Systems) project, goal is to develop a new light-duty diesel fuel that achieves at least a 40 percent over a gasoline economy improvement V8 engine that the diesel engine could possibly replace. The SuperTruck initiative (page 26), initiative The SuperTruck the power which demonstrates engine in integrating breakthrough with Class improvements efficiency including 8 truck design improvements, testing During advanced aerodynamics. in 2012, the concept truck recorded gain in freight 60 percent than a more an important metric in the efficiency, transportation industry. » » » » » 60 » » » The Company’s current public-private public-private current The Company’s where involving DOE, except projects noted, include:

ENVIRONMENT to maintainspeed. the downshiftsrequired Smart Torque minimizes maintain fuelefficient habits. features encouragedriversto Cummins’ electronic driver assistance Greater fueleconomy: maintain speed. down shiftsrequired to Smart Torque minimizesthe maximum speed,savingfuel. and CruiseControl limit Road SpeedGovernors driver assistance Greater fueleconomy: other waystheCompanyengagesourcustomerstoimproveperformance. That’s equivalenttotaking185,000carsofftheroad.Hereareafew 88 milliongallonsoffuelandavoided888,336tonsCO customers on94customer-focused SixSigmaprojects,whichsaved Since 2004,Cumminshascollaboratedwithitsendusertruckfleet for betterperformance Collaborating withcustomers parameters, transmission,tires andotherfactors. the bestfueleconomyconfigurationforelectronic Customers canaccessinformationdescribing library tools Fuel economyreference parameters, transmission,tires andotherfactors. the bestfueleconomyconfigurationforelectronic Customers canaccessinformationdescribing library tools Fuel economyreference

fuel economy. systems formaximum communication between with thevehicle,increased through advancedintegration Greater fueleconomy engine fine-tunin Greater fueleconomy: accessory management. powertrain integrationand Cummins canalsohelpwith calibration andhardware. through vehiclespecifications, Greater fueleconomy engine fine-tunin Greater fueleconomy: SUSTAINABILITY2012–2013 REPORT aid drivercoaching. or trucks,lookingfortrends that can data forvariationsbetweendrivers Fleet managerscananalyzeengine Fleet management driver coaching. trucks, lookingfortrends that canaid data forvariationsbetweendriversor Fleet managerscananalyzeengine Fleet management 2 emissions. transmission configuration. to determineproper axleand vehicle weightandenginetype parameters usinginputssuchas correct vehicleandelectronic Helps customersspecifythe PowerSpec transmission configuration. to determineproper axleand vehicle weightandenginetype parameters usinginputssuchas correct vehicleandelectronic Helps customersspecifythe PowerSpec 61

ENVIRONMENT Environmental and technological and technological Environmental programs strategies, compliance as they relate and major projects its products. to the Company and strategies Public policy developments, by the Company and positions taken as well as to safety, with respect and technological environmental matters that significantly impact the Company or its products. of strategic environmental Progress and policies. programs » » » and the technical leadership and the technical of Cummins regarding: » » » ACADEMIC PARTNERSHIPS of Cummins partners with hundreds the world to assist the universities around and development. Company with research For example, the Massachusetts Institute Benign Environmentally of Technology’s is investigating Manufacturing Group how Cummins uses energy to make engine components. and manufacture the university is looking at Specifically, different the energy used to manufacture camshaft designs to understand just how energy much design decisions can affect will use. The steps taken in this process a design-for-low-energy be used to create complete with Life Cycle methodology, Assessment tools for designers to use to make energy-conscious decisions during the first stages of engine design. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY Dr. Harold Brown, former U.S. Secretary U.S. Secretary former Brown, Harold Dr. of the of Defense and former President California Institute of Technology. Chairman Dr. Gerald Wilson, Chairman Dr. former Dean of Engineering at the Massachusetts Institute of Technology. » » 62 » Other senior international and scientists invited to participate as engineers are advisors depending on the topic. and Technology Environment The Safety, of Committee of the Cummins Board also advises senior leaders Directors » SCIENCE AND TECHNOLOGY AND TECHNOLOGY SCIENCE COUNCIL ADVISORY its Science and from Cummins seeks advice Council in developing Advisory Technology standards, to comply with various products environmental the Company’s reduce demands. footprint and meet customer in 1993, has given the The Council, formed some of the country’s Company access to leading scientific experts and policymakers worlds of academia, industry and the from government. The Council was restructured in 2010 to make it easier to access a of international specialists group broader and align their expertise with the specific by the Council topics being addressed at a particular time. The permanent council members are:

ENVIRONMENT americanenergyinnovation.org. by privatefirms.TheURLishttp://www. investments inresearch anddevelopment environment thatisfavorabletolong-term candotomakeapublic policy government and developmentoperationswhat driven businessesstructure theirresearch howinnovation- the studywastolearn at innovativecompanies.Thegoalof dozen research anddevelopmentleaders Technical Officer, among more thana Dr. JohnWall, President Vice andChief Another casestudyinterviewedCummins’ production andadvanced diesel engines. topics suchasunconventionalgas Recent staff casestudiesinvolved mutual success. is themosteffective wayto ensure prosperity andenvironmental protection leadership, energysecurity, economic working togethertoaddress technological andbusiness believes thatgovernment role inthisgroup. Cummins,likeAEIC, has continuedCummins’leadership Current ChairmanandCEO Tom Linebarger Chairman andCEOofGeneralElectric. Microsoft founderBillGatesandJeff Immelt, competitiveness. Othermembersincluded energy toboostthenation’s economic group advocatingfordevelopmentofclean the AmericanEnergyInnovationCouncil,a leaders servingasfoundingmemberson SolsojoinedseveralkeyU.S.business Tim In 2010,thenCumminsChairmanandCEO INNOVATION COUNCIL AMERICAN ENERGY Well byDoingGood.” report, includingthe2013report “Doing to theRoundtable’s annualsustainability Cummins hasbeenaregular contributor the environment andtheeconomy. that measurablyimprove society, adopt businessstrategiesandprojects companies toleadbyexampleand initiative, whichencouragesmember Environment andEconomy) Change Business Roundtable’s S.E.E.(Society, In addition,Cumminsisamemberofthe use ofenergyandplanningforthefuture. markets andregulatory environment, their to theimpactofclimatechangeontheir on theircarbonemissions,response CDP askscompaniestoprovide details among companies. greater publicenvironmental reporting consortium thatseekstoencourage Project (CDP),aninstitutional investor has participatedintheCarbonDisclosure For thepasteightyears,Company companies toshare bestpractices. to thepublicandworkwithother report onitsenvironmental performance Cummins takesanumberofstepsto SUSTAINABILITY REPORTING Freight Efficiency. and theNorthAmericanCouncilfor the CleanAirActAdvisoryCouncil, Council ofResources fortheFuture, Cummins alsositsonthePresident’s SUSTAINABILITY2012–2013 REPORT 63

ENVIRONMENT emitted 2 ), a key contributor 2 fuel expense by more than 60 percent. fuel expense by more “This partnership demonstrates our commitment to the communities we serve to global warming. estimates the transition to natural Monarch the CO gas engines will reduce into the atmosphere by 1,500 tons per year. into the atmosphere natural gas. The natural gas option is especially attractive to local and regional companies whose trucks return home they at the end of the work day where can be refueled. which serves parts of Indiana, Monarch, expects to Ohio, Illinois and Kentucky, have 100 trucks fueled by natural gas, its consumption of diesel fuel reducing by 800,000 gallons annually and its a cleaner, and our commitment to creating said Jim healthier and safer environment,” Inc. Cummins Westport Arthurs, President, 2012 announcement was The December, gleaming distribution made at Monarch’s center on the eastside of Indianapolis. A two-story inflatable globe stood to the one ton of side of the stage representing carbon dioxide (CO SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 64 The Monarch Beverage Company is The Monarch partnering with Cummins and several which other companies on the project, will include an on-site compressed natural gas fueling station. “As a family-owned Hoosier company, excited to partner with such we are innovative companies to strengthen natural of compressed the presence vehicles in Indiana,” said gas powered Beverage. CEO at Monarch Phil Terry, on the leading The decision puts Monarch edge of the movement in the United States truck fleets fueled by compressed toward ). The move will 2 Monarch Beverage CEO Phil announces his company Terry will convert most of its fleet of trucks to compressed natural gas engines from Cummins The large inflatable Westport. globe in the background represents one ton of carbon dioxide (CO Indiana’s largest beer and wine distributor announced beer and wine distributor largest Indiana’s of its heavy-duty convert 85 percent in 2012 it will fueled by Westport engines to Cummins truck fleet gas. compressed natural warming global reduces Fleet gas engines with natural save 1,500 tons per year.

ENVIRONMENT reduces its expenses. and itsproduction ofwaste,theCompany By reducing Cummins’ownuseofenergy Company helpscustomerssave money. customers saveonfuel,forexample, the sustainability atCummins.Byhelping clear businesscaseforenvironmental Beyond thesocietalbenefits,there isa and intheircommunities. to makeadifference atwork,home a passionfortheenvironment andwant Cummins’ employees,meanwhile,have and hasalmost6millioninoperationtoday. 1 millionenginesayeararound theworld environment. TheCompany sellsmore than make asignificantimpactonimproving the Cummins hastheabilityandglobalreach to Environmental Strategyand Compliance. Brian C.Mormino,ExecutiveDirector – more thatcanandshould be done,”said functions atCummins,butthere ismuch “Environmental workisembraced bymany Cummins’ environmental footprint. and isdefiningaglobalstrategyto reduce the Company’s impactontheenvironment at Cummins.Thecommitteeevaluated businesses, allfunctionsandlocations (ACES) Sustainabilityinvolvesall The ActionCommitteeforEnvironmental global planforenvironmentalsustainability. independent environmentalinitiativesintoacoherent Work isunderwaytointegrate theCompany’s many environmental sustainability Charting aplanfor in nextyear’s SustainabilityReport. Cummins willpublishthosegoals Environmental SustainabilityPlan. collectively beCummins’Global and ahigh-levelroadmap thatwill Each area willestablishitsowngoals » » » » » » The environmental stakeholder areas are: stewardship mindset. establishing anenvironmental while theothersplayakeyrole in opportunities across product lifecycle, areas address theCompany’s greatest included andcoordinated. Thefirstthree and relevant areas ofthebusinessare ensure thatallaspectsofthe environment Environmental Stakeholder Areas to The ACESteamisdividedintosix our businessistheenvironment.” Mormino said.“Inaveryreal sense, tied toenvironmental sustainability,” “Our sustainabilityasabusinessis » » » » » » External CommunicationsandMarketing External Employee andCommunityEngagement Business andTechnology Strategy Design forEnvironment Customers /In-UseProducts Supply Chain SUSTAINABILITY2012–2013 REPORT 65 STRATEGY TECHNOLOGY BUSINESS AND ENVIRONMENT DESIGN FOR PRODUCTS IN-USE CUSTOMERS / ENGAGEMENT COMMUNITY EMPLOYEE & go topage59. To seealltheprinciples, engagement andtechnology. from advocacytocommunity The principlescovereverything Sustainability Principles. Cummins’ 10Environmental Sustainability’s workis Committee forEnvironmental Foundational totheAction & MARKETING EXTERNAL COMMUNICATIONS SUPPLY CHAIN businesses develop new Grow and efficient products Develop clean, employees energy of Harness the C o m p a n y a c t io n s

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ENVIRONMENT In India, employees celebrated Cummins’ 50th anniversary in the country by launching an environmental education campaign designed to reach 75,000 school children. » who helped Dr. Martin Luther King, Jr., Martin Luther King, Jr., who helped Dr. on Washington. organize the 1963 March “Cummins has long been committed our communities,” said to strengthening – Global Community Director Gwen Langley, gratifying to extremely Engagement. “It’s value in see our employees living this core the world.” such a meaningful way around than 50 years, Cummins has For more communities believed building stronger markets for the helps build stronger dating back to products, Company’s Cummins’ visionary CEO J. Irwin Miller, been a year like But seldom has there 2012, not just in terms of the hours invested by Cummins employees, and depth of but also in the breadth they worked the community projects few: just a are on. Here » SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 66 More than 27,000 Cummins employees than More worked on community service projects over increase in 2012, a 68 percent the 16,472 employees who participated in 2011. than 221,000 hours Employees worked more on community involvement activities in of about 90,000 hours 2012, an increase over the 130,000 hours logged building about communities in 2011. That’s stronger over the year before. increase a 70 percent To celebrate the Company’s celebrate the Company’s To 50th anniversary in India, Cummins India employees launched an environmental education effort to reach 75,000 children. Cummins employees invested a record number of hours a record number of employees invested Cummins around the world in 2012, in building stronger communities to Responsibility Value Corporate living the Company’s “serve the communities in which we live.” and improve Building stronger communities communities stronger Building numbers in record responsibility Corporate

CORPORATE RESPONSIBILITY pays foremployeestoworkon community Community (EEEC)program, theCompany Under Cummins’EveryEmployee Every led CommunityInvolvementTeams (CITs). global networkofmore than200employee- community involvementworkthrough a The Companycarriesoutmostofits EMPLOYEE ENGAGEENT Habitat buildinHenryville,Ind. a ceremony markingtheendof Pickup /Van Business,speakingat Company’s GeneralManager–Global here today,” saidJeff Caldwell,the fact, butnevermore thanI amstanding 30 years;I’vealwaysbeenproud ofthat “I’ve beenaCumminsemployeeforover » » » » massive tornadoes earlierintheyear.massive tornadoes 10 homesforfamiliesdisplacedby for Humanity“buildingblitz”tobuild participated inaweek-longHabitat Indiana,aroundIn Southern 600employees more than90librariesaround thecountry. reaching 80,000booksdistributed to to donatebooksruralChineselibraries, milestone withtheirmulti-yearcampaign Employees inChinaachievedamajor of theCompany’s 15bestoftheyear. formal judgingtoberecognized asone communities. Theysubmitprojects for environmental intheir concerns CITs competeastheyaddress Environmental Challengewhere Company hassponsored Cummins’ For eachofthepastfouryears, » » » skills andpassion: they canespeciallyaddknowledge, priority areas where Cumminsbelieves to focustheirefforts onthree global The Companyencouragesemployees to besuccessful. the kindofworkersCumminsneeds markets, alsohelpsattractandretain in additiontobuildingstronger business vigorous employeeengagement program Cummins strongly believes thata time withthepermissionoftheirsupervisor. Employees canworkmore onCompany projects foratleastfourhoursperyear. » » » Social justice/equalityofopportunity Environment Education SUSTAINABILITY2012–2013 REPORT 67 tornadoes earlierintheyear. for familiesdisplacedby to build10homesinaweek Ind.,in2012 blitz” inHenryville, Habitat forHumanity“building employees participatedina More than600Cummins Innovation Points of Corporate Responsibility » » » » » » (page 66). participation record Employees setEEEC begins (page70). education initiative New globalvocational record (page 71). Challenge tops GHG

CORPORATE RESPONSIBILITY The Challenge was once again a huge was once again The Challenge than more success in 2012, drawing in Cummins employees 100 entries from The 15 winners 19 countries (page 71). The from a $10,000 grant each received for the charitable Cummins Foundation their choice. community partner of UNITED WAY 2012 economy, Despite the sluggish year for Cummins’ was also a record participation in the United Way. Cummins employees pledged a record increase $2.66 million in 2012, a 6 percent was record over 2011 when the previous set with employees giving $2.51 million. The Cummins Foundation matches so social pledges dollar for dollar, service organizations in the communities employees live and work Cummins where a total of $5.32 million in 2012. received 9,000 employees participated. than More allows contributors to The United Way designate their funds to specific qualifying so in many cases employees programs, their donations to able to direct were the activities they worked on through EEEC program. Company’s mostly program While the United Way involves the United States, Cummins has started matching gift programs outside the country. In 2011 and 2012, Cummins launched in India, China matching gift programs region and and parts of the Asia Pacific in place to add others in the plans are next 12 to 18 months. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 68 Jean Blackwell, then Cummins’ Executive Vice President of Corporate Responsibility Jean Blackwell, then Cummins’ Executive Vice President talks to Principal Zheng and Chief Executive Officer of The Cummins Foundation, Hong at the Dandelion School outside Beijing, China. The school focuses on migrant children. During a 2010 visit, Blackwell toured the former factory that home. Blackwell retired from Cummins in 2013. is the school’s Transitions started at Cummins in 1997 and Jean Blackwell, who Chief Financial Officer, including served in several roles the Company’s in 2013 as announced her retirement Corporate Responsibility of Executive Vice President of The Cummins Foundation. and Chief Executive Officer efforts Blackwell led Cummins’ Corporate Responsibility grew program since 2008 and the size and scope of the globally. significantly during those years, especially also community involvement efforts The Company’s closely aligned to the business under became more the leadership, and she strengthened Blackwell’s ties with all of Cummins’ business units. department’s by Mark Levett, who since 1999 served She was replaced – High as Cummins’ General Manager and Vice President – Corporate new title is Vice President Levett’s Horsepower. and CEO of Responsibility and Community Relations Company in 1973. The Cummins Foundation. He joined the

CORPORATE RESPONSIBILITY United KingdomandChina. agencies liketheCourageCenterin globally, establishing partnershipswith expand theassistivetechnologyprogram Cummins PowerGenerationisworkingto household devicesforthecenter’s clients. volunteered theirtimetoadapt toysand employees inFridley, Minn.,havelong disabilities. CumminsPowerGeneration spinal cord injuriesanddevelopmental for example,helpsthosewithbrainand The Minneapolis-basedCourageCenter, 2013, addressing arangeofconcerns. several significantpartnershipsin2012- Cummins continuedtofinanciallysupport PHILANTHROPY SIGNIFICANT PARTNERSHIPS / whose causesare meaningfultothem. are abletosupportlocalnon-profits Cummins employeesintheseregions Through voluntarypayroll deductions, employees are already activelyinvolved. to supportinitiativeswhere Cummins’ focus. Financialdonationsare used part ofCummins’corporateresponsibility Dollars, however, haveneverbeenacentral corporate foundationsintheUnitedStates. Cummins Foundation,oneoftheoldest efforts, including$14.1million toThe $30.7 millioninitscorporateresponsibility In 2012,Cumminsinvestedmore than Foundation (page88). foundations suchastheCumminsIndia as TheCumminsFoundationandrelated others through itsbusinessesaswell Cummins supportstheseinitiativesand in thefieldofengineering. who havelongbeenunder-represented would imply, thecollegeserveswomen Nagpur, India(page80).Asitsname Engineering forWomen inPuneand support fortheCumminsCollegeof The Companyalsocontinuesfinancial SUSTAINABILITY2012–2013 REPORT 69 a cleanupproject. in SouthAfricaconduct Cummins employees

CORPORATE RESPONSIBILITY Transport in Morocco, there are now TEC are there in Morocco, Transport operating in China and India. programs “One of the goals of TEC is to test different “One of the goals of TEC is to test different to technical education so approaches what we learn,” we can share said Mary of Global Cummins’ Director Chandler, Strategic Programs. started in 2012 The TEC program that a lack of when Cummins recognized employable skills is a key barrier to success for many people and the communities in for which they live. In addition to the Center include effective All TEC programs guidance teachers and trainers, career and a curriculum that meets labor market needs, combining workplace learning learning. Forging with classroom partnerships with business, government and community organizations is also success. critical to TEC’s In 2013, TEC will continue in Morocco, China and India as well as other new global locations, testing a variety of and identifying best practices approaches a global approach prior to recommending to community technical education. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 70 The OFPPT’s (Office de la Formation (Office The OFPPT’s du et de la Promotion Professionnelle is one of the Center for Transport Travail) Technical first school partners in TEC: Education for Communities. TEC is a Cummins initiative to increase vocational access to good jobs through education, teaching industry-relevant skills such as bus and truck maintenance, in high demand in North Africa. which are Cummins is partnering with the OFPPT (Office de la Formation Professionnelle et de la Promotion du Travail) to open a vocational education program in Casablanca, Morocco, in 2013. The organization sponsors vocational education in the country. TEC program addresses skills addresses TEC program the world around deficit city of Casablanca traveled to the Moroccan People have students, new start. For 112 looking to make a for centuries in September 2013 at a vocational that journey could begin in part by Cummins. education program sponsored : Update

CORPORATE RESPONSIBILITY WINNER WINNER AWARD AWARD to theCompany’s facilities inthecityand The road isoneofthemainapproaches aware ofthecongestionalongKarveRoad. Cummins IndiaemployeesinPune are well Pune, India TAMING PUNE’STRAFFIC 2012 Challenge.Here are theirstories: received specialrecognition inthe partner oftheirchoice.Three projects Foundation tobeawarded tothecharitable a $10,000grantfrom The Cummins Each ofthe15winningCITs received a newrecord. emissions byanestimated4,300tons– Challenge reduced greenhouse gas(GHG) 2011 to12,000employees.The2012 Participation increased 20 percent over from 19countriesinthe2012 competition. More than100entrieswere submitted 15 bestenvironmental projects oftheyear. (CITs) competetodeveloponeofthe than 200CommunityInvolvementTeams Under theChallenge,Company’s more recycling andmuchmore. skills toworkreducingtraffic,plantingtrees,increasing year ofimpressiveresultsin2012,asemployeesputtheir Cummins’ 4thEnvironmentalChallengeproducedanother is aglobalsuccess Environmental Challenge BEST technical BEST environmental impact Janwani, a non-governmental organization Janwani, anon-governmental Employees workedinpartnership with and theDistributionBusinessUnit. Business Unit,CumminsEmission Solutions Technologies, CumminsIndustrialEngine and Technology Institute,CumminsTurbo Business Unit,theCumminsResearch participated intheinitiative:TheAutomotive Road. Employeesfrom sixCumminsentities along a1.3kilometerstretch ofKarve The project focusedonfivetraffic signals volume oftraffic.” Pune Traffic Policebecauseofitsheavy Karve Roadwasalsorecommended by a lotofairpollution.Andthisstretch of the mentalstress, traffic congestioncreates to improve theflowoftraffic. “Apart from team ofmore than200employees working in Pune,”saidNavdeepSingh,wholeda “Traffic congestionisahugeproblem work tomakethesituationbetter. analysis andproblem-solving skillsto the road eachday. Theyputtheirdata about the148,000vehiclesthatpassalong Employees, however, didn’t justcomplain bicycles, too. motorcycles, motorizedrickshaws and can bejammedwithcars,buses,trucks, SUSTAINABILITY2012–2013 REPORT 71

CORPORATE RESPONSIBILITY collecting data via videos taken in the morning, mid-day and during the evening on selected days of the week. One hundred and forty employees took 68 videos in than 600 Every investing more weeks, three Employee Every Community (EEEC) hours on the initiative. Seventy engineers then analyzed the than 3,000 timing videos and derived more evaluated to determine that were readings signals. the best settings for the traffic to adjusted according The signals were the analysis for conditions in the morning, evening and weekends. the smoothly through now flows more Traffic of Karve Road. The team targeted stretch than 200,000 kilograms of estimates more and annually avoided be will emissions GHG nearly $150,000 in fuel will be saved each fuel prices. year based on today’s will be fewer The team also believes there among those who accidents and less stress Police agree travel Karve Road. Pune Traffic of using the now in the process and are congestion traffic same tool to address in other parts of the city. good return on the team’s a pretty That’s $300. Leaders capital investment of around believe the work they did can of the project not just in Pune but be easily replicated India. around SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY The lack of coordinated traffic signals traffic The lack of coordinated Too many vehicles Too A lack of driver discipline Bunching of vehicles traveling speeds at different » » » » » The team determined that in the short term, signal was traffic it could affect the only area members believed if management. Team was there coordinated, the signals were congestion, GHG an opportunity to reduce emissions and fuel could be saved, too. They designed a methodology to evaluate of Karve Road and began the stretch » 72 » » devoted to community improvement and devoted to community improvement in Pune, as well as sustainable growth Police and the Pune the Pune Traffic Municipal Corporation. cities in Pune is one of the fastest growing in India with a population of about 5 million Many multi-national area. the metropolitan corporations have established operations highly to tap into Pune’s in the area some However, educated workforce. old and centuries are key thoroughfares designed for the volume of never were exists today. that traffic four are The team concluded that there congestion along main causes to traffic Karve Road: Cummins India’s Navdeep Cummins India’s captures Singh, center, video of traffic on Karve Road. He led a team of more than 200 Cummins employees working to improve the flow of traffic.

CORPORATE RESPONSIBILITY WINNER AWARD to promote recycling becameaneffort to forward Environmental Challengeproject That’s howwhatstartedasafairlystraight- a symbolofbadluckinSouthAfrica. a naturalpredator butlong considered encourage thegrowth ofthe owlpopulation, population, theyconcluded,wasto And thebestwaytocontrol therat of smallcats. area’s populationofrats–somethesize they hadtolookforwaysreduce the To really address Alexandra’s problems, not farfrom theCompany’s offices inKelvin. settlement nearJohannesburg,SouthAfrica, recycling inAlexandraTownship, aninformal it wasnotenoughmerely to increase Cummins SouthAfricaemployeesdecided Johannesburg, SouthAfrica RATS, OWLSANDRECYCLING any partofthecountry.” “and thetechniquecanbereplicated in in Cummins’AutomotiveBusinessUnit, very littlecapital,”saidSingh,whoworks “The techniqueswedevelopedrequire New entry

a numberofcountries as abiologicalcontrol in answer. owlsare Barn used owlsmightbeone of barn increasing thepopulation Their research ledthemtolookatwhether students orteachersatrisk. in asustainableway, withoutputting the community’s trashandrodent problems From theoutset,theywanted toaddress with theIthutePrimarySchoolinAlexandra. change, employeesdecidedtopartner Believing thateducationisthekeyto threat toresidents andspreading disease. exploded, presenting both aphysical population ofthatsize.Therat infrastructure wasneverdesigned fora approximately 500,000people, butits the community. Alexandraishometo to theillegaldumpingofsolidwastein Alexandra’s ratproblem hasbeenattributed Team (CIT)LeaderforCumminsSouthAfrica. and Environmental CommunityInvolvement said KholofeloNthane,Project Co-Leader methods ofsolvingtheratinfestation,” Alexandra residents, surpassingtraditional “Now theowlhascometorescue of not justabouttrash,butowls,too. change people’s beliefsandbehaviors, SUSTAINABILITY2012–2013 REPORT 73 for owlsonaschool. installed anestinghouse environmental issuesand raise awarenessabout eco kidsclubstohelp employees helpedstart Cummins SouthAfrica

CORPORATE RESPONSIBILITY BEST continuation Projects Management Corporation, Management Projects environmental a professional that the CIT management company to establish had worked with before, school. eco kids clubs at the intended to create, The clubs are in initiatives green educate and support run by students Eco clubs the community. They will established for every grade. were plan for the put together an environmental community that will be submitted to the CIT for possible collaborations. is much work ahead Though there to eradicate the trash and rat problems, both employees and Alexandra residents finally say after years of struggle, there’s cause for optimism. AN URBAN OASIS CREATING Guarulhos, Brazil The Cummins campus in Guarulhos, Brazil, is near several major highways and São in the international airport. Traffic Paulo’s bumper-to-bumper. is frequently area space is limited. Green years, nearly But over the past three 800 Cummins employees have planted Not only in the area. some 5,000 trees has their work helped beautify the city, dust has been reduced the air is cleaner, down in some areas. are and temperatures “When we communicated that we were the planning an activity to plant trees, engagement of our employees was just amazing because we understand that this AWARD AWARD WINNER

SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 74 including Malaysia, Israel, the United States Israel, the United including Malaysia, Africa. and other parts of South to six rats per day. Adult owls can eat four can consume Eight adults in one family month. And they just over 1,000 rats per using that population without can reduce people. poisons that might harm Owl with the Cummins partnered nesting box for Foundation to build a owls on top of the school. Then, they the cultural issues set about addressing involved in the program. owls as evil, so we had to “Many regard to the harmless the children introduce owls and their purpose to of nature said Ally Dhlamini, rodents,” reduce Co-Leader. Project The Owl Foundation and Cummins South Africa employees gave Ithute students an eco-centric view of owls and their niche not in the food chain while being careful cultural beliefs. to dismiss anyone’s an art As part of this education effort, students drew competition was held where of owls. Members of or painted pictures assigned to different the Kelvin CIT were classes to help, and the winning class with a trophy. was recognized waste management, employees improve To at Ithute. program implemented a recycling Cummins employees assisted with the bins in delivery and set up of recycling various colors to separate glass and tin, and plastic, paper and cardboard organic material. Employees also worked with the school’s teachers and the Abilities environmental

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Participating countries in 2012 19 was first held in 2009 the Environmental Challenge the Environmental gas emissions reduced since gas emissions reduced Estimated tons of greenhouse Estimated tons of greenhouse 9,147 2012 Environmental Challenge 2012 Environmental gas emissions reduced in the gas emissions reduced Estimated tons of greenhouse Estimated tons of greenhouse 4,300 was held in 2009 first Environmental Challenge first Environmental Total employee hours since the Total 200,000 Environmental Challenge Environmental Employee hours in the 2012 numbers from the competition. numbers from 80,000 Here’s a look at a few key Here’s Company’s 90th anniversary. anniversary. 90th Company’s in 2009 to celebrate the in 2009 to celebrate Challenge was first held Challenge was first Cummins’ Environmental Cummins’ Environmental by the Numbers Challenge mental Environ CORPORATE RESPONSIBILITY such asairpurification, noise reduction, “Planting trees provides otherbenefits, the greatest environmental impact. city inwhichtoplantorder toproduce Guarulhos, determinedkeyareas ofthe with theEnvironmental Departmentof planted, andtheemployees,together Nine hundred andfifty more trees were Papazissis, addedyetanotherdimension. employees Alexandre BalistaandPriscila Then, in2012,theproject, ledbyCummins trees throughout thecity. 400 employeesalsoplanted2,000more than 400localschoolchildren. Some component wasadded,reaching more grew whenanenvironmental education The followingyear, thepartnership Cummins campus. employees planted2,100trees nearthe of Guarulhos.Through this partnership, officials andtheEnvironmental Department formed apartnershipwithlocalmunicipal when employeesattheCumminscampus The tree-planting effort startedin2010 project teammember. Leader fortheGuarulhoscampusanda Almeida, CommunityInvolvementTeam quality oflifeforourcommunity,” saidLigia benefits, butcontributestoimproving the generates notjustenvironmental andsocial making inourcommunity,” Almeidasaid. that we,asCumminsemployees, are “We feelproud about the transformation making adifference. Employees saytheyfeellikeare 8 degrees coolerintheshadedareas. on average,temperatures were about data onthosesites.Theresearch showed, new trees andcompared withhistorical Temperatures were takenintheareas with already startingtohaveapositiveimpact. this eco-aisle,whichofficials believeis More than300employees helpedform or “eco-aisle,”betweenthetwoparks. flora bycreating anecological corridor, the migrationofwildlifeandrejoin the The Cumminsproject sought toease and vulnerable. the parkecosystemsbecameisolated the parksbecamemore urbanized, edges ofthecity. Astheareas around locatedonopposite Ecológico Tietê, Estadual daCantareira and theParque Guarulhos hastwomajorparks,Parque and servingasadustbarrier,” Almeidasaid. increasing airhumidity, providing shade habitats forbirds, protecting groundwater, softening theforce ofwindsthatprovide SUSTAINABILITY2012–2013 REPORT 75 in Guarulhos,Brazil. improve theenvironment 5,000 treestohelp in Brazilhaveplanted Cummins employees

CORPORATE RESPONSIBILITY Ahmednagar, India Management Project Ahmednagar, ater SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY Cummins employees established a permanent solution to ensure the sustained availability Cummins employees established a permanent solution to ensure of water for drinking and irrigation in an Indian village. Dandelion Eco School Beijing, China operational expenses energy consumption to reduce Dandelion School’s Employees reduced student living conditions. and improve Pune, India Campaign Education nvironmental Them Young” E “Catch education campaign raised Cummins’ 50 years in India, this environmental commemorate To the environment. of preserving among 75,000 students on the importance awareness ffic Signal Management Pune, India Emissions Reduction through Tra reduce signal management system to a traffic Cummins employees designed and implemented congestion. vehicular emissions and traffic the Poona School and home for Blind Girls Pune, India Balanced Ecosystem at at The Poona School and Home for students a safer environment Cummins employees created in energy and water conservation. improvements for Blind Girls through Hills Pune, India Barren Ecosystem at sustaining an ecosystem to promote carbon by developing and Cummins employees offset prevention. fire water and soil conservation and forest biodiversity, Segment Phaltan, India Agricultural Approach for Popular Innovative impact of sugar cane cultivation by educating the adverse environmental Employees reduced farmers on sustainable practices. Manjarsumbha Village W 76 2012 Environmental Challenge winning projects 2012 Environmental Cummins employees remove underbrush and create gardens to make a safer environment for students at The Poona School and Home for Blind Girls (left, center). The project also included improvements in energy and water conservation.

CORPORATE RESPONSIBILITY 2012 EnvironmentalChallengewinningprojects conservation andCO After wildfires in2011,employeesplantedtrees to restore theecosystemandpromote water Reforestation at CerroSanJuandeGuadalupe SanLuisPotosí,Mexico about theimportanceofenvironmental stewardship. Employees created ecoclubsinthearea andintroduced sustainableactivitiestoraiseawareness Eco ClubsSanLuisPotosí,Mexico This project restored alocalwaterwayafterfloodingcausedseveralhundred chokepointsintheriver. W This project harvestedrainwaterthrough waterpansinthearidSamburuarea, benefiting12,000people. Samburu W an owlboxtocombataratinfestation. Employees establishedstudentecoclubs,implementedarecycling program anderected Ithute RecyclingProjectandOwlBoxesJohannesburg,SouthAfrica air pollutionandenvironmental protection. Employees developedbooksinEnglishandZulutoeducatestudentsonwaterconservation, Environmental Story BooksandLiteracy ProgramJohannesburg,SouthAfrica sorting systemanddevelopedenvironmental educationactivitiesforvillagechildren. Cummins employeestaughtvillageresidents organicagriculture, establishedagarbage Organic Culture Comm unity Chengdu,China , Serving Employees created an“ecologicalaisle”toconnecttwomajor urbanparks. Green IslandandEco-Aisle ProjectGuarulhos,Brazil aterway Restoration ProjectNashville,Tenn. ater P 2 absorption. an ProjectNairobi,Kenya SUSTAINABILITY2012–2013 REPORT

77 University deSanPablo. another wasstartedatthe that 14werecreatedand but theideawassopopular five school-basedclubs, with agoalofestablishing the area.Theeffortstarted environmental activitiesin eco clubstosponsor strengthen anddevelop Potosí, Mexico,workedto Filtration (above)inSanLuis Employees atCummins

CORPORATE RESPONSIBILITY Hans Han. “Cummins has a responsibility Hans Han. “Cummins has a responsibility to help, in whatever way we can.” in rural impoverished regions Families from to leave all that is often forced China are city. of work in the nearest familiar in search small farmers made In many cases, they are obsolete by modern farming practices. schooling suffers Often, their children’s city. because of higher education costs in the The Dandelion School was established in 2005, charging only a nominal fee for tuition to help as many families as and boarding possible. Its operating budget has barely yearly expenses. covered SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 78 But with crumbling plumbing and heating But with crumbling plumbing and heating systems, and outdated electrical wiring, this beacon of hope has been a real challenge to keep going. Then, employees at Cummins Emission Solutions (CES) in Beijing became involved. Using a new Corporate Responsibility they tackled incubator grants program, structural problems some of the school’s is much brighter. and today the future “Dandelion is helping needy children change their lives, but they face so many leader challenges,” said CES project Cummins employees used the incubator grants program to help improve the infrastructure at the former factory that is home to the Dandelion School. Housed in an abandoned factoryHoused in of Beijing, in the suburbs city middle school in the School is the only the Dandelion migrant from low-income for children created specifically to find work. families moving to Beijing Hope blossoms at at blossoms Hope School the Dandelion

CORPORATE RESPONSIBILITY reduce waste. for improvement andcreated aplanto water andelectricityusetofind areas report. Together withtheCIT, theystudied and puttogetherawaterenergy and Environment teamvisitedtheschool Members ofCummins’Health,Safety the first recipient ofanincubatorgrant. The CESproject withDandelionwas to solveenvironmental problems. or replicated andthatapply technology is placedonprojects thatcan bescaled Corporate Responsibilityprojects. Emphasis help nurture innovativeand high-potential Incubator grantsprovide start-up fundsto protection andaccess. efficiency andwaterconservation, projects intwocategories: energy employee-led communityenvironmental Launched in2012,theprogram supports newly created IncubatorGrants Program. a grantfrom TheCummins Foundation’s (CIT) partnered withtheschool toapplyfor The CESCommunityInvolvementTeam benefits foryearstocome.” our students,Cumminswillhelp ussee consumption andeducational training for the improvements inourschool’s energy school PrincipalZhengHong.“Thanksto makes theworldabetterplace,”said nurtures achild’s character, whichultimately “At Dandelion,webelievethateducation Cummins’ 2012Environmental Challenge. to itbeingnamedoneof15winnersin use ofwater. Theproject’s successled in additionto20percent more efficient 20 percent declineinenergy consumption and lightingattheschool,resulting ina The teamalsoimproved the insulation gardens attheschool. with thepurifiedwaterbeingusedon be collectedandtreated by theequipment, and re-use rainwater. Waste water canalso downspouts attheschool,tocollect,filter developed asystem,installedunderneath thegrantsupport,team conditions. With a totalof720hoursworkingtoimprove One hundred andeightyemployees spent SUSTAINABILITY2012–2013 REPORT 79 migrant families. for childrenfromlow-income China, createdspecifically middle schoolinBeijing, Dandelion School,theonly Students lineupatthe

CORPORATE RESPONSIBILITY

“I’m particularly proud of the active roles of the active roles “I’m particularly proud taking in this initiative, Cummins leaders are since their engagement is critical to our efforts.” corporate responsibility from a funding and an advisory capacity. and an advisory capacity. a funding from President Pamela Carter, Vice President of the Distribution Business Unit, currently of Directors. Board serves on the coalition’s Vice retired Mark Gerstle, the recently of Community Relations, also President and played an integral serves on the board the goals of the CEC in furthering role at Cummins. during his 25-year career “Cummins is pleased to be a partner in this important work as we strive to bolster our said educational systems in the region,” of Corporate Mark Levett, Vice President Responsibility and Community Relations member of the CEC. Board and current The coalition has tackled a wide variety improving of education initiatives, from education to upgrading higher pre-school education opportunities in the Columbus in Southernarea Indiana. One such undertaking is the iGrad program, in the community a collaborative approach high school graduation rates to improving pairs The program in Bartholomew County. out with students at risk of dropping SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 80 One success story in the Company’s One success story in the Company’s headquarters community has become other Cummins cities a model for three country. the across The Community Education Coalition (CEC) in Columbus, Ind., is a nationally recognized partnership of education, business and community leaders focused on aligning community and integrating the region’s learning systems with economic growth and a high quality of life. The CEC is a organization founded in 1997, nonprofit in part with Cummins’ help. The Company and its leaders have a long history of collaborating with the CEC, both Cummins employee Jim Burke tutors a student at East High School in Columbus, Ind. as part of the iGrad program sponsored by the Community Education Coalition to improve high school graduation rates. Cummins strongly believes that leadership engagement is leadership engagement strongly believes that Cummins of community improvement in the success a crucial factor impact aim to have a high those that projects, particularly goals. with sustainable Coalition for progress for Coalition

CORPORATE RESPONSIBILITY together educators andindustryleaders the coalitionhas focusedonbringing engineering andeducation.Over time, nursing, computertechnology, mechanical community infieldssuchasbusiness, aligned withtheneedsofbusiness master’s degree programs thatbetter development oftwo-year, four-year and Initially, theCECfocusedon community,” hesaid. to dosomethingIlikethatalsohelpsthe that Cumminshasgivenmetheopportunity discuss anyquestionsshehas.“I’mhappy her homeworkproblems and quizzesand East HighSchoolandtogethertheyreview Once aweek,hemeetswithhisstudentat so thisprogram struckachord withme.” Burke said.“Ienjoyedthatinteraction, as myfourchildren were growing up,” “I didalotofcoachingandschoolactivities the program sincethebeginning of2013. He hasservedasamentorandtutorin Cylinder Team LeaderattheCompany. in theprogram includingJim Burke,Power Many Cumminsemployeesare participating a 100percent graduation rate by2017. adults.iGrad’sconcerned goalisreaching Education CoalitioninColumbus,Ind. another projectsupportedbytheCommunity tours theBusyBeesAcademyinApril2013, Karen Pence,thewifeofIndianaGov. MikePence, where they liveandwork. to makingadifference inthecommunities spearheaded bylocalleaderscommitted Cummins’ involvementinthese efforts is Jamestown, N.Y., andSeymour, Ind. similar programs inRockyMount,N.C., The CEC’s successhasledtothestart of educators andcommunityleaders.” in partnershipwithotherkeybusinesses, develop theCommunityEducationCoalition actively engagedandworkedtirelessly to of theCumminsleadershipteamhavebeen Community EducationCoalition.“Members ChiefExecutiveOfficerJohn Burnett, ofthe develop aregionalsaid system oflearning,” to haveCumminsasapartnerworking “Our communityandregion isveryfortunate University Purdue University Columbus. is offered attheAMCEthrough Indiana degree inmechanicalengineering that support theestablishmentofabachelor’s of thebuildingandhasalsoworkedto Cummins helpedfundtheconstruction and improve manufacturing education. labs andassociatedprograms toupdate part ofanetworkintegratedtechnology Excellence (AMCE)inColumbus.Itis Advanced ManufacturingCenterof The CECalsoworkedtobuildthe community andregional needs. to developashared visionanddefine SUSTAINABILITY2012–2013 REPORT 81 12th grade: Pre-K through Here are justafew: post-secondary programs. initiatives, aswellseveral of pre-K through 12thgrade Coalition supportsanumber The CommunityEducation CEC at aglance » Post » » » » » » » ready forkindergarten. emotionally andcognitively backgrounds whoare socially, by preparing children ofall unique approach toeducation Busy BeesAcademy–Takes a technology career outreach. manufacturing, scienceand Dream It.Do–Advanced more than7,000students. institutions. Thecenterserves and three othereducational Purdue UniversityColumbus shared byIndianaUniversity- 130,000 square footfacility Center– Columbus Learning certified nurses. to address a shortageof to expanddegree programs post-secondary institutions seven hospitalsandfive technical educationcenters, Partnership oftwocareer Health EducationNetwork– -secondary :

CORPORATE RESPONSIBILITY first requirement to participate was to requirement first SAE chapter at the college.” an create Sawant worked with a classmate to SAE chapter and the off-road the create Blitz, which team soon followed. Team now consists of 25 women, spent a year for the event and studying and preparing the 2013 competition. then entered months, they painstakingly Over about three built a car to withstand harsh conditions that and meet the contest requirements vehicles be safe, easily transported, easily maintained and have a speed limit of 60 kilometers per hour. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 82 Team Blitz is made up of students at Team the college in Pune that has long been the supported by Cummins to help increase number of women in engineering. The team vehicle and designed and built an off-road in 2013 became the first CCEW team to compete in the Baja Society of Automotive Engineers (SAE) India competition. I came “During my first year at CCEW, episode of the television program an across about the Baja event held in ‘Overdrive’ Captain Mrunal said Team Pithampur,” it, Sawant. “I had no prior knowledge about and learned that the so I began researching Team Blitz finishes an Team impressive 13th in the Baja Society of Automotive Engineers India competition. Students take a path less traveled take a path Students for College of Engineering at the Cummins Some students way to test their India have found a new (CCEW) in Women endurance racing. skills: off-road : Update

CORPORATE RESPONSIBILITY and Companyofficials say Team Blitz’s Baja competitionforthepastfive years Cummins hasbeenaco-sponsor ofthe Quality competition. 13th andtooksecondplacein theBest Test. Team Blitzfinished animpressive three-hour durationoftheBaja’s Endurance Forty ofthose91teamsranfortheentire addition toenduranceoverrough terrain. inclined roads andmaneuverabilityin evaluated foracceleration,speed,climbing The vehiclesthatactuallystarttheraceare tests thatlastedthree days. only 91survivedrigorous inspections and 260 teamsthatappliedtojointheevent, line isamajoraccomplishment.Ofthe designers. Justgettingtothestarting showcase theirpotentialasautomobile mechanical engineerstheopportunityto The Bajacompetitionprovides budding The CCEWteamcelebratesitsstrongshowing. to seetheirperformance.” practical use,”hesaid.“Iampleased have gainedthrough academicsinreal students toapplytheknowledge they “This istheperfectplatformfor participating teams. at thecompetition.Heapplaudedall in India,wasoneoftheGuestsHonor the CumminsArea BusinessOrganization Paul Sowerby, ChiefTechnical Officer for Convener forSAEBaja2013. of CumminsTurbo Technologies andJoint level soon,”saidLalitkumarSuryavanshi, excited totakethiseventaninternational teams improve overtheyears andweare “It isremarkable toseethe participating stronger everyyear. The Bajacompetitionhasbeengetting performance wastrulyimpressive. SUSTAINABILITY2012–2013 REPORT 83 good human beings.” work ethicsand aboveall technically sound withstrong who are academicallyand “To develop womenprofessionals MISSION in advancedengineeringstudies. Purdue Universityonafellowship The CCEWalsopartnerswith graduate programs inengineering. level programs andtwopost undergraduate degree The collegeoffers five ACADEMICS in PuneandNagpur, India. CCEW hascampuses LOCATION Engineering forWomen. Cummins Collegeof the college,hencename gave adonationtohelpstart The CumminsIndiaFoundation exclusively forwomenin1991. It startedanengineeringcollege of womenthrough education.” dedicated tothe“empowerment in Indiaformore than100 years, renowned educationalinstitution Samstha (MKSSS)hasbeena Maharshi KarveStree Shikshan HISTORY Engineering forWomen: the CumminsCollegeof Here’s aquicklookat CCEW at aglance

CORPORATE RESPONSIBILITY about 1.6 million people around about 1.6 million people around to the according the globe annually, Organization (WHO). Health World half of these deaths occur than More the health five or younger, among children organization says. In developing countries with high mortality rates, indoor air pollution ranks fourth among the risk factors that contribute to death and disease. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 84 “In reality they are used in towns and cities they are “In reality the world,” said Marion, who is throughout based in Columbus, Ind., and is a member one of 27 employee of team Nuv Vida Four, teams that submitted designs in the competition. “So the idea of being part the lives that can improve of a project of millions of people was very enticing.” of Nuv Vida Four will Marion and the rest get to see their stove design built and tested after their team was named one of five competition finalists in April 2013 and General by CES Vice President Manager Srikanth Padmanabhan. will be built using each of the Prototypes finalists’ designs and then tested by the Beijing (China) University of Chemical stove testing center. Technology One design will be selected to go into in partnership with India- production, based Prakti Design, one of the leading stove makers in the world. Indoor air pollution generated mostly and poorly ventilated cook by inefficient for the deaths of stoves is responsible Cummins Emission Solutions Cost Analyst David Emmons, a member of team Boiling Point, studies one of stoves. Prakti’s Cassie Marion, a Customer Support Excellence Coordinator Excellence Coordinator a Customer Support Cassie Marion, thought (CES), had always Emission Solutions for Cummins used in other fuels were only that burn wood or cook stoves in extremely remote locations around daily food preparation became part of a CES competition to the world. Then, she build a cleaner stove. CES puts skills to work work skills to puts CES stove a better cook designing

CORPORATE RESPONSIBILITY hazards causedbythetraditionalcook “All ofusare aware of the serioushealth Monitoring –wassoonoff andrunning. (and design),Education,Applicationand Project S.T.E.A.M. –Standards, Testing surveyed onwhatwouldinterest them. CES’ 1,400employeeswhowere The cookstoveissueresonated with of 2012. stove designcompetitioninthesummer intended whentheylaunchedthecook project wasprecisely whatCESleaders business-wide corporateresponsibility backgrounds from across theglobeina Bringing togetheremployeeswithdifferent is expectedtowrapupinmidlate2013. FourfromVida Columbus.Thecompetition Marktheidenfeld, Germany, andteamNuv India. Theothertwocomefrom CESin Three ofthefivefinalteams are from the UnitedKingdomandStates. China, Germany, India,theNetherlands, proposals from CumminsteamsinBrazil, the 27designsdownto10,choosing from theCompanyandPrakti firstwhittled Solutions competition.Ateamofjudges world participatedintheCumminsEmission About 170employeesfrom around the our goal,”Serrarsaid. point toadifferent approach toachieving fresh view…oftheproblem andmaybe who hassomeexpertise,cantakea “We lookforward toworkingwithsomeone and durablewhilestillaffordable. of cookstoves–cleaner, more efficient company developthenextgeneration development supportwillhelphis he hopesCummins’research and Prakti CEOMouhsineSerrarsays in launchingthecompetition. the environment,” Padmanabhan said appropriate thatweshould focuson around theglobe,wefeltthat itwas that reduce harmfulengine emissions “Being adivisionthatproduces products the skillsoftheiremployees. cookstovescloselyalignswith burning CES leadersbelievedesigningcleaner better placetolivein.” very noblecause,tomakethisworlda “We entered thiscompetitionasithada Research andTechnology IndiainPune. High HorsepowerEngineeringatCummins in thecompetition.Vyawahare worksin a memberofteamIgnite,anotherfinalist stoves,” saidEngineerIshaVyawahare, SUSTAINABILITY2012–2013 REPORT 85 the world. Solutions employeesaround webcast toCumminsEmission off thecompetitionthatwas stoves atameetingkicking Serrar talksabouthiscook Prakti DesignCEOMouhsine

CORPORATE RESPONSIBILITY positions including as Vice President Vicepositions including as President of Cummins Power Generation Group of Holset and Managing Director Engineering, which later became Technologies. Cummins Turbo But in many ways, Stoner had been his whole life for his work with preparing he continues where Save the Children, to serve on a volunteer basis. B. Stoner, Stoner is the son of Richard who was Vice Chairman of the Cummins for 20 years and a Directors of Board close associate of visionary Cummins CEO J. Irwin Miller. a belief in father and Miller shared Rick’s the life-changing power of education and a world view that extended far beyond They handed down borders. Indiana’s those beliefs to their own children. influence on “My dad had a tremendous whose father died in me,” said Stoner, 2008. “His values, his sense of fairness all aspects of and his drive to improve me.” community life inspired Stoner joined Yale, After graduating from the Peace Corps, working in Africa. It was an eventful experience for many reasons, among them: he met his wife Elizabeth SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 86 In both places, he worked on improving In both places, he worked on improving systems, strategic and succession planning global collaboration. and strengthening “In some ways Cummins’ business units divisions at Save like the different are who retired said Stoner, the Children,” in October 2012 after 13 years with the as the most recently group, child welfare – Senior Vice President organization’s International and Chief Operating Programs all about working effectively “It’s Officer. a common goal.” toward on what he drew Stoner says he frequently learned than 20 years at during his more he worked in a variety of Cummins where Rick Stoner says his work at the international charitable international charitable says his work at the Rick Stoner might as different as you the Children wasn’t group Save executive. his time as a Cummins think from Born to serve Born

CORPORATE RESPONSIBILITY employee ofthecharitableorganization. left theCompanyandbecame afull-time Children in1999.Then2001,heofficially a CumminsexecutiveonloantoSavethe development workorAfrica.Hebecame But Stonerneverlosthispassionfor Cummins’ generatorbusiness. assignments includingconsolidating taking onanumberofotherexecutive Eventually, hereturnedtoColumbus, Managing Director ofHolset. Daventry EnginePlantbefore becoming roles includingplantmanager atthe lived inEngland,servingavarietyof For thebetterpartof15years,Stoner in the1970s. was livingafterfleeingunrest inEthiopia happened tobewhere his wife’s family operations basedinLondon.Thatjust General ManageroftheCompany’s Africa But hewasapproached about becoming the furthestthingfrom his mind then. Joining Cumminswasjustabout aide tothen-U.S.Rep.LeeHamilton,D-Ind. law schoolatHarvard and laterbecamean there. Uponreturninghome, Stonerwentto his legacyhere.” business,” saidPrice.“That’s definitely thinking andstrategytothenot-for-profit “Rick brought anawfullotofbusiness as avolunteerwithSavetheChildren. he retired from Cummins, butstayedon 18 monthsuntilMarch of2013when Price wasanexecutiveonloanfor the Children, too. his exampleinspired Price tojoinSave of Price’s supervisorsatCumminsand Cummins executive.Stonerwasone to GlynPrice,whohimselfisaformer his timeatSavetheChildren, according Stoner madeahugedifference during Stoner said. “The children are somotivatedtolearn,” as many120studentsinaclassroom. some replacing mudhuts that were serving in theschoolshehelpedtostartAfrica– the Children, healsotakes great pleasure accomplished organizationallyatSave While Stonerisproud ofwhat he SUSTAINABILITY2012–2013 REPORT 87 at age55. colleague whodiedin2002 executives inhonoroftheir donations fromCummins’ The schoolwasbuiltwith executive GeorgeFauerbach. oflongtimeCummins memory dedicated in2005tothe George’s SchoolinEthiopia, Rick Stonerstandsoutside

CORPORATE RESPONSIBILITY three global priorities: education, global three and social justice / the environment equality of opportunity. of the In 2012, about 65 percent spending went toward Foundation’s educational initiatives. Social justice spending accounted and environmental 35 percent. for the remaining grants totaling were In addition, there a Cummins-supported $637,990 from foundation in India. The Cummins India Foundation, established in 1990, supports the environment higher education, energy, projects. and local infrastructure spending is some philanthropic Finally, made by individual business units within Cummins – just over $1.39 million in 2012. A list of Cummins’ larger philanthropic during 2012 contributions and projects is included on the following pages. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 88 But giving dollars is not a central Corporate component of the Company’s Cummins wants Responsibility program. to support employee to use its philanthropy use their skills and passions to to efforts communities. build stronger than $30.7 million Cummins invested more in 2012, efforts in its corporate responsibility including $14.1 million to The Cummins Foundation. The Foundation, in turn, gave out nearly $8 million in grants in 2012. a wide range of Those grants covered lab equipment for science, activities, from engineering and math education technology, of the to restoration in Cookeville, Tenn.; U.K., in Stamford, Mill Stream Stamford that establishes businesses to a program and empowers women in Kenya. The Foundation focuses primarily on Cummins facilities are communities where located and in support of the Company’s Cummins employees in Indianapolis used a grant to improve a playground for one of its community partners – the Concord Neighborhood The improvements Center. included a safer rubberized surface that is now home to a play truck employees built as part of a fundraiser for Habitat for Humanity. The Cummins Foundation is one of the oldest corporate of the oldest corporate Foundation is one The Cummins It has played a critical in the United States. foundations its inception in 1954. of initiatives since role in hundreds Supporting employee passions passions employee Supporting philanthropy through and skills

CORPORATE RESPONSIBILITY Lab equipmentfortheSTEMProgram Putnam CountySchools Safe, eco-friendlyandADAaccessible playground Mineral PointElementarySchool nutritional trainingto15migrantworkerschools SIFE ChinaProvidesafety, healthand Improve mathematicspassrateingrades8-10 Kwa-Bhekilange SecondarySchool ITI PhaltanTechnical EducationforCommunities(TEC) Chhindwara Project SponsorshipforCenterofExcellence improving studentachievement Root causeidentificationandstrategicplanfor Strategic Twin-Counties EducationPartnership The LibraryProject, Inc.ChinaEducationInitiative 4th gradescienceandenvironmentaleducation Charleston CountySchoolDistrict TEC Program–SoftskillsteachertrainingatMoroccosite International Youth Foundation The MindTrust SummerAdvantageProgram Stoughton HighSchool“FabLab”fortechnicaleducation Child DevelopmentCenterandIncredibleYears Program Amherst H.Wilder Foundation Employability schoolforyoungpeople Education BusinessPartnership supporting operationalexpensesandsafetyupgrades Implementation ofasustainabilityplanby Ithemba InstituteofTechnology Early ChildhoodEducationInitiative Community EducationCoalition Graduation CoachesProgram Ivy Tech Foundation Engineering forWomen Educational fundingforCumminsCollegeof Maharshi KarveStree ShikshanSamstha Design, developmentandconstructionofaresourcecenter Falconer’s HillInfantSchool Training andoperationalcostsforReinventaRSE Komatsu CumminsChile Technical EducationforCommunities(TEC) Community CenterJ.IrwinMiller Planning grant Chautauqua CountyEducationCoalition Technical EducationforCommunities(TEC) Phaltan EngineeringCollege Disaster ReliefProgramSupportingEducationinEmergencies Save theChildren Advanced ManufacturingLabandplanninggrant Jackson CountyEducationCoalition Education GRANTEE ORGANIZATION Cookeville, Tenn. Mineral Point,Wis. Shanghai, China Sandton, SouthAfrica Phaltan, India Chhindwara, India Whitakers, N.C. Throughout China Charleston, S.C. Casablanca, Morocco Seymour, Ind. Stoughton, Wis. St. Paul,Minn. Kent, U.K. Johannesburg, SouthAfrica Columbus, Ind. Columbus, Ind. Nagpur, India Northamptonshire, U.K. Quilicura, Chile São Paulo,Brazil Jamestown, N.Y. SUSTAINABILITY2012–2013 REPORT Phaltan, India Various Seymour, Ind. COMMUNITY GRANT ORDONATION $100,000 $100,000 $100,500 $106,112 $125,000 $175,000 $181,818 $187,000 $197,000 $212,000 $125,000 $235,000 $249,744 $250,000 $950,000 $37,075 $40,635 $46,500 $61,630 $75,264 $79,233 $79,989 $90,000 $29,500 $75,000 89 FOUNDATIONS CUMMINS CUMMINS INC.

CORPORATE RESPONSIBILITY CUMMINS INC. CUMMINS FOUNDATIONS $25,000 $25,000 $18,885 $37,309 $32,000 $13,000 $27,000 $88,000 $55,000 $23,868 $40,079 $20,000 $38,500 $17,000 $35,300 $15,000 $32,000 $15,000 $10,200 $10,000 $10,000 $10,000 $250,000 GRANT OR DONATION COMMUNITY Columbus, Ind. Northamptonshire, U.K. Northamptonshire, Florence, Ky. Florence, San Luis Potosí, Mexico Costa Rica U.K. York, Ladson, S.C. Pune, India Columbus, Ind. Beijing, China Beijing, China Beijing, China Cookeville, Tenn. Kenya & South Africa Columbus, Ind. U.K. Stamford, Columbus, Ind. Nashville, Tenn. Columbus, Ind. Sunderland, U.K. Columbus, Ind. Columbus, Ind. Bloomington, Ind. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 90 Columbus Park Foundation Expansion of the People Trails Environment Education – continued Rowan Gate Primary School project Energy efficiency lighting ZATION GRANTEE ORGANI Family Nurturing Center prevention in Northern Kentucky Child abuse education and Regeneración Pro Patronato Juan H. Sanchez A.C. del Parque Improve water quality of Parque Morales Boating Lake Amigos of Costa Rica / Estrategia Siglo XXI Amigos of Costa Rica in Costa Rica Advance science and technology Trust Wildlife Yorkshire Renovation of community farm buildings Ladson Elementary School classroom Greenhouse and outdoor MCCIA Zero Garbage Project Bartholomew Consolidated School Foundation Bartholomew Consolidated Minds on Math Dandelion School Eco-School energy and water efficiency improvement projects Dandelion Middle School Extracurricular programs for students with physical and psychological needs Friends of Nature Public education and recycling campaign Tennessee Tech University Tech Tennessee Purchase of generator for mobile learning lab International Association of the Lions Club – Kenya Installation of two water pans in arid Samburu region Bartholomew Consolidated School Foundation Diversity Awards Rivers Trust The Welland Restoration of Stamford Mill Stream Bartholomew Consolidated School Foundation Book Buddies Program Hands on Nashville Repair flood damaged waterways Bartholomew Consolidated School Corporation Columbus Area Career Connection - Part-time instructor for Engineering Drawing Department Young Enterprise Young Helping children succeed through entrepreneurship Bartholomew Consolidated School Corporation Environmental Challenge grant recipient Heritage Fund of Bartholomew County Dave Galle Scholarship Fund Indiana University Lee Hamilton Fellowship Award

CORPORATE RESPONSIBILITY for newcomputersystem Software licensing,backupandfirewall solutions Community Emergency AssistanceProgram Support vocationaltrainingandhighereducation Maharashtra Arogya Mandal-uktanganGirlsHostel to theresidentsatNorwoodSquareandBrandesPlace -Facilitateadditionalprograms andservices Advantage Services CommonBond Communities Sponsorship fortornadoreliefrebuildproject Habitat forHumanityofIndiana Environmental Challengegrantrecipient Kandu Industries,Inc. Materials tohelpdefineandremodelspace Eastside CommunityCenter Environmental Challengegrantrecipient Housing Partnerships,Inc. Electronic documentmanagementsystem CommonBond Communities Janwani EnvironmentalChallengegrantrecipient Caregiver short break and day care services fordisabledyouth Caregiver shortbreakanddaycareservices Harewood HillLodge City ofElkhartEnvironmentalChallengegrantrecipient Vocational trainingspaceforpeoplewithintellectualdisabilities Especializada A.C. Institución PotosinaPro-Educación On-site viewingplatformandscreenmadefromrecycledplastic Durham Wildlife Trust Warehouse efficiencyproject Second HarvestFoodbankofSouthernWisconsin Housing Partnerships,Inc.Energyefficiencyproject Co-fund purchaseofanewrefrigeratedtruck Food BankofEasternNewMexico Energy efficiencyproject Food BankofEasternNewMexico Build sevenspecializedroomsforchildrenwithcerebralpalsy Wuxi SocialWelfare Center Environmental Challengegrantrecipient Global VillageofBeijing to anationallevelofprominence Courage CenterElevateAssistiveTechnology Program United Way AgenciesU.S.matchingprogram Social Justice Solution forhouseholdwasteandagriculturepollution Global VillageofBeijing Environment –continued GRANTEE ORGANIZATION Brooklyn Park,Minn. Pune, India St. Paul,Minn. Henryville, Ind. Janesville, Wis. Columbus, Ind. Columbus, Ind. St. Paul,Minn. Pune, India Darlington, U.K. Elkhart, Ind. San LuisPotosí,Mexico Tyne &Wear, U.K. Madison, Wis. Elizabethtown, Ind. Clovis, N.M. SUSTAINABILITY2012–2013 REPORT Clovis, N.M. Wuxi, China Beijing, China Minneapolis, Minn. United States Beijing, China COMMUNITY GRANT ORDONATION $2,663,692 $103,552 $123,055 $203,520 $222,270 $29,000 $29,455 $42,600 $50,000 $50,000 $67,120 $72,050 $75,000 $12,250 $12,950 $17,000 $20,000 $24,737 $10,000 $10,000 $10,000 $10,000 91 FOUNDATIONS CUMMINS CUMMINS INC.

CORPORATE RESPONSIBILITY CUMMINS INC. CUMMINS FOUNDATIONS $26,316 $25,000 $25,000 $25,000 $25,000 $20,222 $20,000 $20,000 $20,000 $20,000 $19,400 $17,409 $15,065 $13,500 $13,100 $11,700 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 GRANT OR DONATION COMMUNITY San Luis Potosí, Mexico Walesboro, Ind. Walesboro, Nashville, Tenn. New York, N.Y. New York, Kenya Charleston, S.C. Indianapolis, Ind. Seymour, Ind. Seymour, Carthage, Tenn. Neillsville, Wis. São Paulo, Brazil San Luis Potosí, Mexico Columbus, Ind. Columbus, Ind. Indianapolis, Ind. Quimper, France Quimper, Columbus, Ind. Columbus, Ind. St. Paul, Minn. Pune, India Columbus, Ind. Columbus, Ind. Cookeville, Tenn. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 92 Social Justice – continued a Niños Asociación Mexicana de Ayuda AFIC Philanthropic Awards ZATION GRANTEE ORGANI ood Bank of Indiana, Inc. Backsack Program Gleaners Food Bank of Indiana, Inc. Purchase of 15-passenger van Purchase of 15-passenger Backfield in Motion, Inc. Autism Speaks 2012 Lead Off For A Cure The BOMA Fund empower women in Northern Kenya Establish businesses and Crisis Ministries deep freezer Funding to support 6 Sigma project and purchase a Concord Community Center Concord Increase awareness and visibility of Concord to potential clients and funders Gleaners Food Bank of Indiana, Inc. Backsack Program Upper Cumberland Long Term Upper Cumberland Long Term Relief Recovery Committee, Inc. Tornado Wisconsin Vietnam Veterans Memorial Project Vietnam Veterans Wisconsin Complete a DVD project, roof and building replacement Ecoficina – Youth at Risk Ecoficina – Promote training course using recycled material Promoción Social Integral, A.C. Promoción AFIC Philanthropy Award Developmental Services, Inc. Purchase and assemble five greenhouses Connected Community Partnership services Website to non-profits in Columbus and Seymour Gleaners Food Bank of Indiana Improve client tracking and reporting of data for Gleaners and nine food pantries Secours Populaire Français – Comité de Quimper Secours Populaire Improve safety and storage Columbus Area Chamber of Commerce Foundation Chamber of Commerce Columbus Area Support funding for Executive Administrator for CAMEO, CYP and LBC Partnership Columbus Regional Hospital Foundation Volunteers in Medicine 17th Annual Reverse Raffle for CommonBond Communities Environmental Challenge grant recipient The Poona School and Home for Blind Girls Environmental Challenge grant recipient Love Chapel Environmental Challenge grant recipient Sans Souci, Inc. Environmental Challenge grant recipient The Putnam/Overton County Long Term The Putnam/Overton County Long Term Recovery Committee, Inc. Disaster Relief

CORPORATE RESPONSIBILITY and Manufacturing,Cummins Vice President–GlobalSupply Chain Director LisaYoder President –EngineBusiness,Cummins Vice President Director RichFreeland Chairman –CumminsIndia President –ComponentsGroup Vice President Director AnantTalaulicar Business, Cummins President –PowerGeneration Vice President Director Tony Satterthwaite Officer, Cummins Vice President–ChiefFinancial Director PatWard Administrative Officer, Cummins Vice PresidentandChief Director MaryaRose Member ofCumminsBoardDirectors President –Wallace Foundation Director Will Miller and CommunityRelations,Cummins Vice President–CorporateResponsibility Director MarkLevett Chairman andCEO,Cummins Chairman Tom Linebarger Board ofDirectors by theseofficialsandcommittees: The CumminsFoundationisgoverned Foundation leadership Development, Cummins Director –EMEACorporate Rakesh Gangwani Corporate Development,Cummins Executive Director– Greg Ehlinger and Pensions,Cummins Executive Director–GlobalTreasury Chair GloriaGriesinger Investment Committee Engine Business,Cummins Vice President–Controller, Karen Battin Vice President–InternalAudit,Cummins Luther Peters Vice President–Controller, Cummins Chair MarshaHunt Audit Committee Global StrategicPrograms,Cummins Corporate ResponsibilityDirectorof Secretary MaryChandler Finance Director, Cummins Corporate Responsibility Treasurer MarshaAllamanno and CommunityRelations,Cummins Vice President–CorporateResponsibility Chief ExecutiveOfficer MarkLevett Foundation Officers SUSTAINABILITY2012–2013 REPORT 93

CORPORATE RESPONSIBILITY Safety

Health and safety key to Cummins’ sustainability Building on its record-setting performance in 2011, Cummins improved on several key safety metrics in 2012 while rolling out new initiatives that should SA F ETY enhance safety at the Company in the future.

“I’m very proud of the way so many of our for safety in 2011, meeting all of its targets employees made a personal commitment for key safety metrics for the first time ever. to safety in 2012,” said Michelle Garner- In response, Cummins raised its goals in Janna, Director – Corporate Health and 2012, but nevertheless managed to meet Safety. “Our long term goal is to achieve most of them and record improvements world class performance in health and in several key areas, including: safety. To get to that level, we need to build Two key safety metrics, an interdependent spirit in our organizations »» A 24 percent reduction in the the Incidence Rate Indicator where we care about each other’s safety Severity Case Rate in 2012. and the Severity Case Rate Indicator, have been falling as much as we care about our own.” »» A 12 percent drop in the Incidence over the past decade, Rate compared to 2011. a sign of the Company’s Cummins health and safety leaders went commitment to safety. into 2012 knowing it would be hard to top »» A 6 percent improvement in 2012 2011. The Company enjoyed a record year in the Severity Lost Work Day Rate. Actual Target

Incidence Rate Indicator Severity Case Rate Indicator

3.0 1.2

2.5 1.0

2.0 0.8

1.5 0.6

1.0 0.4

0.5 0.2

0.0 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

94 SUSTAINABILITY REPORT 2012–2013 80 percent since 2003. lost-time cases, decreased more than while theSeverityCaseRate,based on dropped 72percent over thattimeperiod based onrecordable injuries andillnesses, over thepast10years.TheIncidence Rate, Rate andSeverityCaseatCummins in thesteadyreduction intheIncidence employees healthyandsafecanbeseen The Company’s commitmenttokeeping treatment costsforworkrelated injuries. impacts everythingfrom productivity to valuable resource andkeepingthemsafe employees are theCompany’s most Cummins believesstrongly thatits Safety Director. Pramod Palat,CumminsOccupational and supportofallouremployees,”said and safetyteamsactiveparticipation commitment anddiligencebyourhealth “This isreflective ofthehard work, identified and fixed (page100). to report safety problems theyhave reporting toolthatemployeescanuse a personalprioritysuchasweb-based for employeestomakehealth and safety individual businessunitstomake iteasier Other initiativeswere developedby $1.7 million. collectively savedanestimated drew more than70entriesthat competition (page98).The first-ever, Company-wideergonomics like the about specificsafetyconcerns Some are designedtoraise awareness 2012-2013 toimprove health andsafety. Cummins initiatedseveralprograms during Corporate SafetyManager. said GuillermoCastillo,Cummins improvement inoursafety programs,” commitment tosafetyandcontinuous “Those numbersreflect both a SUSTAINABILITY2012–2013 REPORT 95 and toolkittoguardagainstaccidents. out anewhoistandcranesafetypolicy health andsafetyteamin2012rolled Plant inColumbus,Ind.TheCompany’s operates ahoistattheColumbusEngine Cummins employeeKimMillersafely Innovation Points of Safety » » » » » » continue falling(page94). Key safetymetrics (page 98). saves $1.7million Ergo Challenge (page 100). makes safetypersonal Team’s newwebtool

SAFETY the Institute believes EHS is at the core the core believes EHS is at the Institute sustainability, of business vitality and excellence and intrinsic to operational and financial performance. charter Some of the Institute’s Chemical members include: Dow Exxon Mobil Corporation, Company, Petrochemical General Motors, Gulf States United Industries Company, Steel Corporation, United Technologies and the Whirlpool Corporation. participating in the believe “We Campbell Institute is both a tremendous honor and a wonderful opportunity to learn other leaders in health and from said Kelli Smith, Cummins’ safety,” Occupational Health Director. AUBURN UNIVERSITY with Auburn Cummins partnered University in Auburn, Ala., in 2012 to look at how the certain assembly Company approaches an ergonomic perspective. tasks from “Both the university and the Corporate saw this as a Health and Safety Group opportunity because it provided great students a hands-on, ‘live’ opportunity to assess assembly tasks and it gave Cummins ergonomic support from said Chris an external point of view,” Shieldsmith, Corporate Ergonomist at Cummins. in a thoughtful The partnership resulted solution that Shieldsmith says should help the way Cummins approaches improve certain assembly tasks. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 96 The Company also rolled out a new Crane out a new Crane also rolled The Company with groups and partnered Safety Toolkit identify best practices outside Cummins to adopt in the future. the Company should CRANE SAFETY and cranes are At Cummins, hoists used to lift heavy objects frequently pounds a few hundred weighing from to several tons. Sometimes familiarity can breed Employees may forget that complacency. all hoists and cranes should be operated with caution simply because of the potential if a load falls. damage that can result often injuries are Crane-related pose an important hazard and severe for employees and operators alike. In 2012, Cummins consolidated the crane implementation of a re-designed safety policy and a toolkit aimed at these types of accidents. preventing has reduced effort The cross-functional than incidents by more crane-related since its implementation. 60 percent CAMPBELL INSTITUTE In October 2012, Cummins was invited to become a member of the Campbell Institute (www.thecampbellinstitute.org), which is the Center of Excellence for Health and Safety Environmental, (EHS) at the National Safety Council. The Institute fosters healthy and high- the performing workplaces through identification and sharing of best practices. and cutting-edge, Impact-driven, rigorous

SAFETY safety. Forexample, theCompanyhas Cummins hastakenaleadingrole indriver specially prepared course. with aprofessional racecar driverona opportunity todriveanewMiniCooper course where teendrivers had the The dayincludedadistracteddriving gooddrivinghabits. help teenslearn and featured anumberof attractions to parking lotattheColumbusEnginePlant The rallytookovertheCentralAvenue students drivingtipstokeeproads safe. host thetraining-and-educationalfairtogive Trucking Association andlocalsponsorsto Cummins partnered withthe American in August2012Columbus,Ind. Smart 2012Teen DriverSafetyRally The businessunitsponsored theStart safety problemofdistracteddrivingamongnewdrivers. Cummins Heavy-DutyEngineBusinesstookaimatthe distracted drivingamongteens Engine businesstackles drivers around thematrisk.” It’s puttingthemselvesandother distracted byphonesorloudmusic. “Many are drivingtoofast and are often even intheschoolparkinglot,”Beansaid. “Teens everywhere are notdriving safely– potential consequencesofdistracteddriving. staff toproduce ofthe avideowarning project workedwiththeCompany’s video School student,whoforhersenioryear up withSaraBean,aColumbusEastHigh In additiontotherally, Cumminsteamed inside andoutsidetheUnitedStates. the-job injuriesacross allindustries both Car crashesare aleading cause ofon- business forthepasttwoyears. cell phoneswhiledrivingonCummins prohibited employeesfrom usingtheir SUSTAINABILITY2012–2013 REPORT 97 prepared course. racecar driveronaspecially Cooper withaprofessional opportunity todriveanewMini Ind. Teen drivershadthe August 2012inColumbus, Teen DriverSafetyRallyin inaugural StartSmart2012 Business sponsoredthe Cummins Heavy-DutyEngine

SAFETY “I am really pleased by the quality of “I am really said Chris Shieldsmith, these projects,” Cummins’ Corporate Ergonomist. “I hope next year so we this competition will grow outstanding even more will be able to share ergonomic best practices and solutions with Cummins employees.” in work Ergonomics is the study of efficiency and lifting Bending, reaching environments. a it’s ways is not only inefficient, in awkward of injuries at the Company. leading source judged on innovation, Contest entries were cost savings, ergonomic risk and simplicity, The winning team, Cummins presentation. Power Generation China, developed to significantly an innovative hoist fixture the level of risk for multiple people reduce while enhancing efficiency. at the Jamestown and a project That project accepted into Engine Plant were (N.Y.) an international ergonomics competition. the redesigned The Jamestown project to carts to avoid secured way engines are of pulling on straps with the old process force. tremendous won, just being While neither project part of the international competition about the importance raised awareness of ergonomics. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 98 The three-month competition resulted competition resulted The three-month Cummins 70 entries from than in more the world. Employees locations around suggested ways to adjust work tasks to align with the natural movement safely more saved The 70 projects of the human body. the Company an estimated $1.7 million in costs avoided and lost productivity. said the contest inspired Safety officials Cummins employees to think about ways ergonomics in new and creative encouraged an ergonomics and greatly the Company. throughout culture Cummins Power Generation China won the Company’s first Ergo Cup competition, developing an innovative hoist fixture to significantly reduce risk for multiple people while enhancing efficiency. The Corporate Health and Safety team launched Cummins’ team launched Cummins’ Health and Safety The Corporate fall of 2012 to promote Cup competition in the first Ergo across the Company. ergonomics Cummins holds first Company-wide first Company-wide holds Cummins Cup competition Ergo

SAFETY including, butnotlimitedto,awristorbackstrain.” could leadtomultipletypesofmusculoskeletalinjuries said. “Thecombinationofforce andpoorposture activate thebuckleonstraptwice,”Shieldsmith postures whileexertingup to70poundsofforce to cart requires theoperatortobendincompromising “The taskofstrappingtheenginetobuild BEFORE Ergonomist atCummins,totelluswhatheseesintheteam’s pictures: take secondplaceinthecompetition.We askedChrisShieldsmith,Corporate The Jamestownteamredesignedthewayitsecuresenginestobuildingcarts why ergonomicsissoimportanttoemployeesafety. Engine Plant’s applicationincludedsomeexcellentphotosthatillustrate As partoftheCompany’s firstErgoCupcompetition,theJamestown Ergonomics inaction SUSTAINABILITY2012–2013 REPORT that were associatedwith the jobaswell.” bending, effectively eliminating anyposturalrisks also kepttheoperatorstandinguprightwithminimal exertion thatwasrequired tolockthestrapsand “The newprocess completely eliminatedtheforceful and hookstheenginetocart,”Shieldsmithsaid. them withamechanismthatisboltedtotheengine to holdtheenginebuildcartandreplaced “The solutioneliminatedthestrapsthatwere used AFTER 99

SAFETY

and corrected. Some locations award gift Some locations award and corrected. other prizes to the employees and cards the or teams of employees that resolve most problems. encourages Safety leaders say the program Cummins workers to take a personal only in their own safety but in the not interest establishes it safety of their co-workers. And a framework so employees can talk about with their co-workers safety problems without appearing critical or confrontational. identified during safety The safety problems month in 2013 included such things as storage of hand tools and engine improper guards carts, the absence of protective of equipment, pieces rotating around equipment with sharp metal edges and potential obstacles in the way of workers One employee walking the plant floor. even identified and fixed an unsafe traffic condition in the parking lot at his workplace. Safety leaders like seeing employees extend their concernplant walls for safety beyond an indication that they are because it’s incorporating safety into their daily lives. Stacy Wyatt, Health and Safety Engineer at the Columbus Engine Plant, said the tool SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 100 Observance of the EBU’s April Awareness April Awareness Observance of the EBU’s took safety to Event in 2013, however, a new level thanks to safety leaders, at the staff the Information Technology Columbus Engine Plant and the EBU’s Corporate IT staff. an easy-to- they created together, Working use, web-based tool as part of the EBU’s “Find It, Fix It” campaign. The tool enables employees, whether at home or at work, of a computer with a few strokes to report any health or safety concern keyboard that they identified and fixed. With out to rolled the new tool in place and the world, reports EBU employees around than doubled in April 2013, from more year to 28,449. 13,386 the previous “The main purpose of this initiative is to behavior to get them to change people’s decide ‘I will get this fixed and I will get it Health, said Bertrand Piredda, fixed now,’” of EBU Director Safety and Environment Global Operations. The Find It, Fix It campaign adds a little safety friendly competition to the EBU’s the as employees strive to report efforts identified most health and safety problems Safety month each April was already a big hit within the a big hit within each April was already Safety month in the Cummins, resulting Unit (EBU) at Engine Business thousands of unsafe and repair of literally identification 2010. it was initiated in worldwide since acts or conditions Web tool helps put safety first safety put helps tool Web

SAFETY safety, employee meetingsonsafety, of significantemployeecontributionsto messages from seniorleaders, recognition The Aprilsafetymonthalsoincludesvideo Me” campaign. of theCompany’s “SafetyBeginswith tools likeFindIt,FixItisakeycomponent a personalcommitmenttosafetythrough environment. Gettingemployeestomake safety toestablishaworld-class must takepersonalresponsibility for Cummins believesstrongly thatemployees safety intothelivesofouremployees.” she said.“Ithinkitwillreally helpusembed easier toreport, collectandanalyzedata,” “This computerprogram makesitsomuch associated withsafetyauditingprograms. also reduced administrativetaskstypically more stepintherightdirection,” Piredda said. for onemonth,butourAprilinitiativeis Environment) isnotastatus weachieveonly “World-class HSE(Health Safety andthe business unitsacross the Company. tool are beingmadeavailable toCummins of thesafetymonthandnewcomputer Corporate safetyofficials say EBU’s version everyone’s responsibility. the businessunitrecognize thatsafetyis practice. Now, shesays,employeesacross confront someoneengagedinanunsafe Unit. Employeeswere initiallyreluctant to floor culture withintheEngineBusiness other stepshavehelpedtochangetheplant Wyatt saystheAprilAwareness Eventand Safety andHealthatWork. and acelebrationofWorld Dayfor SUSTAINABILITY2012–2013 REPORT 101 safety monthinApril2013. Engine BusinessUnit’s a safetybannerforthe and RayBatemenhang employees DannyLeckron Columbus EnginePlant

SAFETY Employee relations

The power of diversity and inclusion Cummins has long believed in the power generated by bringing together people with diverse backgrounds

E M PLOYEE RELATIONS to solve a problem or meet a challenge.

But leveraging the full benefit of a diverse who helped Dr. Martin Luther King with his workforce doesn’t end with representation. 1963 March on Washington when Miller Cummins believes inclusion, the creation was president of the National Council of of an atmosphere where employees feel Churches. Miller, who led Cummins for safe to share their full opinions and even some 40 years before retiring in 1977 disagree on occasion, is key to tapping and served on the Board of Directors until into the power of diversity. his death in 2004, was practicing diversity before the term had even been coined. “We don’t ask employees to always agree with each other,” said Andre “Character, ability and intelligence are not Goodlett, Cummins Diversity Relations concentrated in one sex over the other, nor Director. “Embracing diversity in the in persons with certain accents, or in certain workplace means treating each races, or in persons holding degrees from other with dignity and respect when some universities over others,” Miller said expressing or receiving different in a quotation still prominently used across perspectives. It’s in competing ideas the Company. “When we indulge ourselves that we truly see the power of diversity.” in such irrational prejudices, we damage ourselves most of all and ultimately assure Cummins’ Global Diversity Department ourselves of failure in competition with will be focusing on inclusion over the next those more open and less biased.” year, working with various departments and business units to embed diversity into their It’s a philosophy shared by current business strategies. The department wants Chairman and CEO Tom Linebarger to be a resource where business leaders who took over as leader of Cummins can go to learn how to develop a workplace in January 2012. where ideas flourish. “Cummins’ success today would not be Fortunately, the department has more than possible without our deep commitment 50 years of history to build upon, dating to diversity,” said Linebarger, who joined back to legendary CEO J. Irwin Miller, the Company in 1994.

102 SUSTAINABILITY REPORT 2012–2013 demographic group toseniorleaders. oftheirparticular the concerns development whilealsorepresenting focus onrecruiting, retention andcareer employees. Thesegroups typically gay, bisexualandtransgender(LGBT) women, African-Americansandlesbian, represented attheCompanysuchas specific demographictraitsunder- Affinity Groups are organizedaround diversity-related initiatives. to upholdandenhancetheCompany’s resource groups chargedwithhelping The staff supportsmore than100employee full benefitofdiversityinseveralways. the rightenvironment forleveraging the The GlobalDiversitystaff helps tocreate and success.” results thatwillsustainour future growth customers around theworld anddeliver “Diversity willhelpusbetterserveour tomorrow’s businesschallenges,”hesaid. employees driveinnovationforsolving diverse ideasandperspectivesofour inclusive workenvironment where the “At Cummins,wewanttocreate an exciting conversationtobehaving.” workforce,” hesaid.“That’s avery competitive advantagefrom ourdiverse now abouthowwegetthemaximum “At Cummins,theconversationis to thenextlevel. poised totakeitsdiversityinitiatives Goodlett believestheCompanyis U.S. Affirmative Actionprograms. compliance expertisetoCummins’ oversight, infrastructure, and Finally, thedepartment provides to changeanother’s pointofview. beliefs butdoesnotpermitattempting appropriate expressions ofindividual in theworkplace.Thestatementsupports the expression andexercise ofreligion released apolicystatement clarifying For example,in2012theCompany and procedures related todiversity. works onspecialprojects, policies The GlobalDiversityDepartmentalso or challengestositeleadership. identify anydiversity-related issues promote diversityingeneral andto are site-basedgroups designedto Local DiversityCouncils,meanwhile, SUSTAINABILITY2012–2013 REPORT 103 of diversityattheCompany. this forumtodiscussthestate Cummins leadershaveused Local DiversityCouncil. by theCorporateandCBS hall meeting in 2013 sponsored Linebarger addressesatown Chairman andCEOTom Innovation Points of Employee Relations » » » » » » (page 104). opportunities forwomen Cummins Indiacreates for success(page106). the rightenvironment Employee groups set (page 110). generation ofleaders Company prepares next

EMPLOYEE RELATIONS parents of job candidates to dispel their of parents fears about working at the plant. the government to “Getting permission from have women work in the second shift was said Ashwath Ram, a major breakthrough,” next “This is the Cummins JV Leader. Tata step in our continued pursuit to have more in the workplace.” women representation Cummins leaders have been working hard the shop floor diversity from to increase ranks, and then to professional the through leverage the power of diversity to improve have Company performance. Their efforts been noticed by the news media in India. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 104 Women are now working from 2 to 10 p.m. now working from are Women in the plant at Cummins’ Megasite, about two hours southeast of Pune. They normally to work past 7 p.m. but not allowed are Cummins is one of a select number Tata given permission by the of manufacturers government to allow women to work the second shift. The plant has taken a number of steps to help women who want to work that shift, at the appointing female security guards ensuring safety while traveling to facility, self-defense the plant, providing and from In some cases, training and more. even met with the Company officials Women can now be seen can Women working on the shop floor at Cummins’ Megasite in Phaltan, India after 7 p.m. Cummins India is working hard to increase opportunities for women. For much of the past year, workers on the second workers of the past year, For much 2 in Phaltan have Limited Plant Cummins shift at Tata on a shop floor in something rarely seen witnessed 7 p.m. Women. India after Pursuing diversity in India diversity Pursuing

EMPLOYEE RELATIONS Gupta said. growing womenleadersatCummins,” about growing representation aswell “Being awoman,Ifeeldeeply passionate business organization’s DiversityLeader. Group andnamedPriyadarshiniGuptathe India re-launched theWomen’s Affinity 2004 to27.5percent in2011.Cummins increasing dramatically, from 4percent in jobs atCumminsfacilitiesinIndiahasbeen The numberofwomeninprofessional Conference inMumbaiOctober2012. award atthefifth Women inLeadership Employer forWomen inCorporate India Cummins oneoffivewinnersitsBest in leadership,noticed,too.Itnamed The WILLForumIndia,aforumforwomen into theworkforce inaseparate piece. Cummins’ efforts tobring more women however,The Times, hasalsonoted of thecountrytoworkatCumminsfacilities. recruiting ofpeoplefrom different regions That particularstoryfocusedonthe of Indiain2012. Human Resources Leader, toldTheTimes Nagarajan Balanaga,CumminsIndia’s are differently wired, (and)thinkdifferently,” around thetableandthinking –peoplewho “It’s goodtohavediversepeoplesitting second shiftatTata Cummins. meetings withthewomenon The Affinity Group hasalsosetup their worklifewithhomelife. to beleadershelpingwomenintegrate and coachingwomenwiththepotential from childcare solutionstomentoring working onanumberofissuesranging The Women’s Affinity Group hasbeen in leadershipwillbenefittheCompany.” and womenbothintheworkplace “I believehavingagoodmixofmen “Cummins inIndiabelieves SUSTAINABILITY2012–2013 REPORT Cummins andseeaclear We recognizethisis thought bringstobusiness. Cummins IndiaArea an importantvalueat of diversegroups.” Business Organization Diversity Leader– priyadarshini gupta in thevaluethatdiversity better representation business caseinhaving 105 providing self-defensetraining. to andfromplants guards, providingsafeescorts appointing femalesecurity India havetakenstepslike work, Cumminsfacilitiesin To aidwomenwhowantto

EMPLOYEE RELATIONS Cummins has two different kinds of Cummins has two different In addition to groups. employee resource the Company has Local Groups, Affinity site-based Diversity Councils, which are an inclusive with creating charged groups at a particular location. work environment 51 Local Diversity Councils and are There the Company across Groups 50 Affinity African-Americans, representing employees with disabilities, Latinos, bisexual and transgender lesbian, gay, employees; veterans, women and more. Affinity has come from Most of the growth and much of it has followed Groups in 2010 and 2011 to Company efforts embed diversity in Cummins operations outside the United States. New groups have been established in Africa, Australia, Brazil, China, India and the United Kingdom years. in recent Sarah Wyllie, an HR Generalist at Cummins Power Generation in Kent, U.K., joined the Company in the May of 2012. A few months she helped start ROAR – Recruiting, later, Advancing and Retaining. Onboarding, SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 106 “In Southern Indiana, there are about “In Southern are Indiana, there 1,500 Cummins employees under 30,” said Su, an Account Specialist at Cummins Emission Solutions in Columbus, Ind. units business in different “But they are departments and they and different need a way to meet.” Mandala, which Su and others created the Indian language loosely translated from focuses The group of Sanskrit means circle. for employees on completing the circle one of under 30 in Southern Indiana. It’s groups number of resource a growing by employees over the last three created and retention recruiting, years to address development of under-represented career at Cummins. demographic groups “The chartering of employee resource by almost has been growing groups per year since 2010,” said 10 percent Goodlett, who oversees the groups Andre “We’re as the Diversity Relations Director. outside the United especially seeing growth embrace States as our business units really Cummins’ diversity value.” Chang Su had already put together a successful singles a successful singles had already put together Chang Su saw a need for younger group. So when he networking Indiana to meet and employees in Southern Cummins he didn’t hesitate to organize share common interests, a new Affinity Group. create groups Employee work environment inclusive

EMPLOYEE RELATIONS speeches onovercomingchallenges.Here,heshakeshandswithChairmanandCEOTom Linebarger. withtheU.S.Marinesin2006.Now,during apatrolinIraq.Hewasserving Bleilldeliversinspirational jointly sponsoredaspeechbyJoshBleill,wholosthislegswhenanimprovisedexplosivedevicedetonated Indiana SpecialNeedsandAbilitiesAffinityGroupthe Worldwide Veterans andSupportersAffinityGroup Affinity GroupsoftensponsorspeechesandpresentationsattheCompany. 2013,theSouthern InFebruary opportunities includingonewhere ROAR hassponsored various networking might notgetthatopportunity.” who workinverysmalldepartments about 550people.“Butthere are others of theoperationsatKentwhichemploy to meetawiderangeofpeople,”shesaid “I’m lucky, I’minapositionwhere Iget careers attheCompany. which willallowthemtodeveloptheir and aimstoprovide asupportnetwork less thantwoyearsnavigateCummins who havebeenwiththeCompanyfor The group isfocusedonhelpingemployees need tobesuccessful.” inclusive workenvironment we “They helpuscreate thekind of role atCummins,”Goodlett said. “These groups playaveryimportant aboutotherdepartments. and learn to meettheleadershipteamatsite The group isalsoorganizingevents person whosenumberwasonit. and pledgetohavecoffee withthe airplane thatwasn’t theirown Participants hadtopickupan with theiremployeeIDnumbers. participants flewpaperairplanes SUSTAINABILITY2012–2013 REPORT 107 of California’s law. decision onthe constitutionality pending theSupreme Court’s lawmakers postponedaction the amendmentwhileIndiana down Minnesota votersturned couples from marrying. which prohibits same-sex Proposition 8inCalifornia, U.S. Supreme Courtopposing amicus curiaebrieffiledwiththe companies asasignatorytoan joined more than250other And CumminsinMarch 2013 surrounding asimilaramendment. in ateleviseddiscussion shared thesamemessage Communications Carole Casto Executive Director ofCorporate In Indiana,Cummins and brightestjobcandidates. it more difficult to recruit thebest prospective employeesand make welcoming environment” for all in Minnesotawouldcreate a“less only betweenamanandwoman amendment definingmarriageas stating thataproposed state released aletterinOctober 2012 President Tony Satterthwaite Cummins PowerGeneration from marrying. prohibit same-sexcouples in IndianaandMinnesotato past yearagainststateproposals Cummins tookstandsoverthe marriage aendents Cummins opposes

EMPLOYEE RELATIONS increasing competition for its business competition for its increasing with customer needs. It also aligns economic expectations and creates opportunities within all communities employees live and work. Cummins where started as Diversity procurement an initiative primarily pursued by U.S.- years, based companies. But in recent outside the it has started to take root United States. Expanding the scope of diversity internationally is just one procurement goal of Cummins’ Diversity Procurement team. The Company also wants to increase of both the amount and the percentage its spending with diverse suppliers. in The Company made progress in 2012. both of these areas SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 108 Cummins was named 2012 Corporation of Cummins was named Development by Minority Supplier the Year China, which links large corporations and ethnic minority-owned businesses. The Company was also runner up for the 2012 presented award Corporation of the Year by Minority Supplier Development U.K. truly say that diversity procurement can “We is a concept that applies globally,” Cummins Diversity said Michelle Taylor, “But we must be Leader. Procurement develop initiatives that fit our to careful international The last thing regions. we want is to use our North American model as a one-size fits all approach.” Cummins believes diversity procurement is a key business strategy with bottom-line benefits. Developing diverse suppliers gives the Company a competitive advantage by The Cummins team at a diversity procurement tradeshow in Indianapolis in 2012. Cummins’ efforts to take diversity procurement outside procurement outside efforts to take diversity Cummins’ start, but leaders States are off to a good the United is much work ahead. caution there Diversity Procurement goes global goes Procurement Diversity

EMPLOYEE RELATIONS » suppliers inthefuture, including: designed tohelpdevelopmore diverse Cummins isinvolvedinseveralinitiatives REACHING OUT so diversesupplierscanbeready. and advancedmanufacturingneeds the Company’s future technology to engagepurchasing leaders about as subcontractors.Shealsowants suppliers tousemore diverse suppliers Procurement staff challengeitslargest Taylor wouldliketoseetheDiversity a challengingeconomy, aswell.” economy, it’s therightthingtodoin “If it’s therightthingtodoinagood leader Gordon Fykeswho retired in2013. mind,” saidTaylor whoreplaced longtime “The economicclimatedoesn’t matterinmy 13.1 percent in2013. suppliers, from 12.2percent in2011to percentage ofitsspendingwithdiverse The Companyalsoincreased the 91 percent between2007and2012. Diverse spendingatCumminsincreased 2012 –anincrease ofalmost10percent. $810 millionin2011to$890 diverse spendincreased from justover in thesecondhalfof2012,Cummins Despite theglobaleconomicdownturn 2012 PERFORMANCE » a companywith headquartersin This year’s challenge:“Howdoes solutions tovariousbusinesschallenges. black collegeasksstudentsto identify The competitionatthehistorically Owen CollegeinMemphis,Tenn. student competitionatLeMoyne- The Companysponsorsanannual

» » » » spending withdiversesupplierssince2007. The totalamountofmoneyCumminshasbeen in millionsofdollars Spending ondiversesuppliers 200 400 600 800 next three tofiveyears. require capacityplanningoverthe wide growth opportunities that will diverse suppliersonfuture enterprise- effort toengageandprepare successful “Conversations withCummins”inan Development Councilbyco-sponsoring with theNationalMinoritySupplier Cummins willleverageitsmembership owners tosucceed. which helpsempowerwomenbusiness member ofWEConnectInternational, National Council).Cumminsisalsoa WBENC (Women BusinessEnterprise Great Lakescertifyingcommitteeof The Companyisamemberofthe values andcontinuetobeprofitable?” different countrieswithdifferent maintain itsplatformofethicsin the UnitedStatessuchasCummins SUSTAINABILITY2012–2013 REPORT 2007 2008 2009 2010 2011 2012

$464.40 million

$571.60 million

$432.70 million 109 $544.90 million

$810.10 million

$890 million

EMPLOYEE RELATIONS Coach and develop Foster open communications Manage diversity management Talent Think strategically / Set the aim » » » » » in his year-end message to employees message to in his year-end in 2012. “It is also important for ensuring long-term success by our Company’s developing new leaders for the next generation now.” Leaders and managers learn early on that to succeed they must have a development mindset, built on five Cummins believes are key skill areas leadership: essential to great » » » » » SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 110 The effort starts when employees begin starts when employees The effort sessions on their first day on the onboarding performance job. It continues with a robust management system to help them succeed. leadership And the Company believes great a number is especially important, so it offers of initiatives to train and develop Cummins’ next generation of leaders. Linebarger Chairman and CEO Tom has identified leadership as one of the accelerators, five key growth Company’s the right work critical to creating for success. environment “Leadership development is critical for leaders who can motivate and growing the support our employees, who are our success,” Linebarger said for reason Harsh Khandelwal is an engineer at Cummins Center in Technical Columbus, Ind. Cummins never stops working to develop never stops working Cummins workforce. a sustainable Developing new leaders leaders new Developing sustainability key to

EMPLOYEE RELATIONS same wayasa finance employeeinBrazil. the sameskills and isevaluatedinthe finance inIndia,forexample,is acquiring within variousdisciplinessosomeone in achieve consistentfunctionaldevelopment The Companyisalsocontinuing workto are nowinsystem. Approximately 16,000professionals is availablein12different languages. Management System,forexample, development. ThePerformance Company takesaglobalviewofworkforce living outsidetheUnitedStates, more thanhalfofCummins’employees With reports –notjusttheirmanagers. of stakeholdersincludingpeersanddirect That feedbackcomesfrom awiderange they needtodevelopandsucceed. employees withtheconsistentfeedback The systemisbuiltaround providing and howtoimprove. expectations, whattheyneedtoaccomplish to ensure employeesknow theirmanagers’ System, aweb-basedprogram designed Company’s PerformanceManagement Employees are alsointroduced tothe Code ofBusinessConduct. history andculture, aswell asCummins including informationontheCompany’s background theyneedtobesuccessful, provide newemployeeswiththe Weeklong onboarding workshops STARTING OFF and sustainable. development efforts are botheffective day, Cumminsbelievesitsworkforce their managersontheseskillsevery as ensuringemployeesworkwith through structured programs aswell By developingleadersintheseareas

within theirownorganizations. aboutthefivekeyskillstoleaders learned in 2012asparticipantscascaded whatthey created in2009,movedintoanewphase targeting theCompany’s top250leaders The LeadershipCulture Series,aninitiative out inSouthAmericaandAfrica2013. leadership roles. Theinitiativewillberolled Business Organizationsforfuture global employees from oneoftheCompany’s Area prepares approximately 15highpotential in ChinaandIndia.The18-monthprogram Leadership Developmentprogram in2012 Meanwhile, CumminscompleteditsGlobal feedback from theirpeers. their skillsandobtainmeaningful appreciate theopportunity topractice overall program. Participants saythey direct reports isthecenterpieceof 3½ dayclassroom session oncoaching about 4,000leadersglobally. Anintensive in Otherswilleventuallyberolled outto Launched in2011,BuildingSuccess those expectations. as welltodeveloptheskillsfulfill expectations theCompanyhasforthem of professionals betterunderstand the is primarilyfocusedonhelpingleaders in Others”program in2012.Theeffort of theCompany’s “BuildingSuccess Cummins conductednumerous modules various stagesintheircareers. development efforts targetleadersat full potential.That’s whytheCompany’s help hisorheremployeesreach their career-limiting asabadbosswhodoesn’t Cummins recognizes thatnothingisas LEADERSHIP DEVELOPMENT SUSTAINABILITY2012–2013 REPORT 111 WHO as ofApril2013: Company’s 46,000employees Here’s aquicklookatthe global, high-techworkforce. Cummins employsa at aglance Our workforce » » WHAT » » WHERE » » » » » » » » » » 962 (2percent) Information Technology 3,764 (8percent) not inengineering science degreebut Engineering or 7,206 (16percent) Engineers 34 percent Union 66 percent Non-union 38 percent Inside theU.S. 62 percent Outside theU.S.

EMPLOYEE RELATIONS We will follow the law – will follow We diverse will embrace We perspectives and backgrounds and treat all people with dignity and respect. fairly and honestly. will compete We conflicts of interest. will avoid We 1 everywhere. 2 3 4 Cummins periodically updates its Code societal and business changes. to reflect The Code was last updated in 2009. The update was one of the first tasks new completed by the Company’s in 2012. Ethics and Compliance staff by Company The document was reviewed of Directors, leaders and Cummins Board the world as well as employees around borders across it was relevant to ensure and cultures. The updated Code was translated and Intranet site posted on the Company’s in 16 languages. It continues to be built Cummins’ 10 Ethical Principles: around to avoid problems. to avoid problems. problem or get advice problem to report a potential to report there are multiple ways multiple are there numerous reminders that reminders numerous The update also includes at a global company. at a global company. intellectual property intellectual property responsibly to protecting to protecting responsibly from using social media from guidance on everything

The update includes new

1 mmins.com SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY

112 “The updated Code addresses issues “The updated Code addresses our commitment to diversity ranging from each other to how we and how we treat the compete fairly for business around world,” Cummins Chairman and CEO Linebarger said in a note to all Tom employees announcing the update. us of our key and “It also reminds as Cummins unchanging responsibility employees to behave ethically at all times live behavior that doesn’t and to report he added. up to our standards,”

ethics.cu at concerns ethical Report

Ethics Driven — Every Time Every — Driven Ethics Code of Business Conduct Business of Code The updated Code includes new guidance on everything from using social media responsibly to protecting intellectual property at a global company. New code guides ethical behavior guides ethical New code to good governance renewed its commitment Cummins behavior in Januaryand ethical 2013 by releasing Business Conduct. Cummins Code of an updated GOVERNANCE

GOVERNANCE on ethicsandcomplianceissues. assess where Cumminsstandsglobally and professional employeesin2012to the Companyalsosurveyedoffice In additiontoupdatingtheCode, ETHICS SURVEY 10 5 9 8 7 6 for ethicalbehavior. all employeestakeresponsibility We willcreateaculturewhere with honestyandintegrity. We willcommunicate our communities. We willstrivetoimprove are clearandunderstandable. financial recordsandprocesses We willdemandthatour intellectual property. our informationand We willprotectourtechnology, and saferenvironment. we doleadstoacleaner, healthier We willdemandthateverything anonymously where allowedbylaw. They canreport thoseconcerns Cummins EthicsHelpLine(page114). also report problemsto andconcerns staff. Employeesaround theworldcan Department andEthicsCompliance of sources includingtheCompany’s Law Help canbeobtainedthrough anumber employees onethicalissues. about thehelpavailabletoCummins suggested awareness could beraised could improve. Inaddition, thesurvey within theCompanywhere awareness However, the surveyrevealed pockets to thesustainabilityofCompany. and theimportanceofethicalbehavior Cummins CodeofBusinessConduct of employeesare bothaware ofthe The surveyfoundthatthevastmajority About 14,000employeesparticipated. not shared withanyoneat Cummins. responses were anonymousandwere June andJulyof2012.Individualemployee survey wascompletedbyathird partyin The first-everComplianceandEthics SUSTAINABILITY2012–2013 REPORT 113 the school. Pi BusinessFraternityat hosted bytheDeltaSigma Cummins. Thespeechwas Responsibility andEthicsat on thetopicsofCorporate Business wherehespoke University’s KelleySchoolof to studentsatIndiana CEO Tom Linebargertalks Cummins Chairmanand Innovation Points of Governance » » employees (page112). Updated Codeguides

GOVERNANCE TRAINING principles Cummins puts its ethical a comprehensive into practice through targeting program compliance training to employee groups appropriate ethical behavior. promote courses The Company has required Anti-Bribery on topics ranging from Lobbying to and Information Protection and Political Action. Most of the training on-line courses through is delivered available in multiple languages. policies and procedures The Company’s periodically updated are in these areas established and new training initiatives are to help employees stay aligned with Cummins Code of Business Conduct. REPORTING ETHICS VIOLATIONS, AND INVESTIGATIONS Any code of conduct must be enforced Cummins employees are to be effective. that they have an reminded frequently suspected Code of obligation to report Business Conduct violations to protect what makes Cummins a and preserve place to work. great They can do that in a number of ways, senior leaders, their including through their representative, Human Resources the Law Department, the Ethics supervisor, and they can report and Compliance staff it on-line at ethics.cummins.com. They can also call the Cummins Ethics Help Line. Violations at any level of the Company and acted on swiftly and appropriately are investigated. are all reports 99 98 97 98 96 97 99 98 97 98 99 98 98 100 100 PERCENT 572 515 528 322 5,807 23,477 14,454 22,967 18,031 11,689 23,365 23,209 13,625 18,103 98 18,364 Enrolled Complete 183,663 SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 114 Training Communication Careful Code of Business Conduct Conflicts of Interest Export Compliance Global Competition Principles and Practices Information Protection Intellectual Property Lobbying and Political Activity / Records Information Management of Each Other Treatment At Work Act Fair Labor Standards Managing Within the Law Industry Data Payment Card Compliance Security Standards Grand Total Anti-bribery Antitrust and Fair Competition PLIANCE TRAINING MPLIANCE 2012 CO every compliance training of employees receive Thousands figures are accumulated enrollments year at Cummins. These the training courses were first implemented: going back to when

GOVERNANCE an annualreport. of theCumminsBoard ofDirectors reviews receives updatesandtheAuditCommittee Chairman andCEOTom Linebargeralso on reports intheirbusinessorregion. business unitleadersreceive anupdate by Cummins’seniorleaders.Eachquarter, Reported violationsare closelymonitored cases in2012,thesameas2011. The Companyaveraged13daystoclose Relations accountedformostofthecases. those grouped intothecategory ofHuman Reports ofunprofessional behavior and cases resulted inemployee terminations. 40 percent ofthosesubstantiated 54 percent were substantiatedand Of thecasesinvestigatedin2012, reported anonymously. and 26percent ofallcomplaints were came from outsidetheUnited States, Forty-six percent ofthose complaints complaints compared to1,076 in2011. 1,196 CodeofBusinessConduct-related In 2012,Cumminsinvestigated report potentialviolationsanonymously. permitted bylocallaw, employeescan Code violationsmadeingoodfaith.Where negatively affected byreporting suspected No one’s career atCumminscanbe of theworld. has MasterInvestigatorsinmostregions taken inatimelymanner. TheCompany They makesure appropriate actionis responds toreports ofCodeviolations. Cummins’ teamofMasterInvestigators updated in2013. Code ofConductisscheduled tobe in compliance.TheCompany’s Supplier total spending.Allreported theywere receive about80percent ofCummins’ Company’s topsupplierswhocollectively In 2013,Cumminssentitscodetothe and policies. its passionforsustainablepractices do businesswithsuppliersthatshare for employees.TheCompanywantsto rights andproviding asafe workplace child orforced labor, respecting employee The Codeincludesprovisions banning expected tomeet. the worldknowstandards theyare languages toensure suppliers around Conduct hasbeentranslatedintomultiple laws. TheCompany’s SupplierCodeof standard thanjustcompliance withlocal Cummins’ suppliersare held toahigher SUPPLIER CODEOFCONDUCT investigated, according to Company policy. to ensure theywere documentedand Law Departmentreviewed anyexceptions Directors. AuditandCummins Internal including allmembersoftheBoard of completed theirannualEthicsCertification In 2012,17,666employeesandofficers report anyexceptionstoCumminspolicy. and underlyingpolicieseveryyear the Company’s CodeofBusinessConduct Employees certifytheircompliancewith ETHICS CERTIFICATION PROCESS SUSTAINABILITY2012–2013 REPORT 115 54 investigated byCummins cases around theworld Number ofCodeConduct 1,196 by theNumbers Governance Cummins in2012 Ethics Certificationat who completedtheir Employees andofficers 17,666 and Julyof2012 survey completedinJune ever ComplianceandEthics participating inthefirst- Cummins employees 14,000 number ofdaysas2011 cases in2012,thesame to closeCodeofConduct Average numberofdays 13 cases substantiated Percentage ofthose 54 1,196 17,666 14,000 13

GOVERNANCE

Audit Committee Compensation Committee Executive Committee Finance Committee Governance and Nominating Committee and Environment Safety, Committee Technology » » » » » » COMMITTEES of Directors Cummins Board has six standing committees: » » » » » » The Company complies with all New Stock Exchange and regulatory York concerning the requirements membership of certain committees. INTERNAL AUDIT Cummins Internal Audit department members and senior to Board provides leaders independent and objective information on the performance of the The Vice environment. control Company’s – Internal to the President Audit reports of Directors. Audit Committee of the Board In 2012, the Internal published Audit Group and memos. 134 audit reports management has addressed ensure To identified risks and implemented corrective action, Internal follow- Audit has a formal business or The responsible up process. a corrective functional leader must present action plan to the Audit Committee of when a function of Directors the Board an “Unacceptable” or business receives audit grade.

SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY The effectiveness of internal The effectiveness controls and risk management practices. Communications and relationships Communications and relationships with stakeholders. Compliance with all applicable laws and regulations. The performance of senior management. The performance of the Company. » » » » » » » 116 » » » The Board of Directors oversees the of Directors The Board representing of the Company, affairs of Cummins’ the interests and protecting and sound stakeholders. It exercises judgment regarding independent business and operational issues. significant, strategic also advises senior management The Board and adopts governance principles consistent with Cummins’ Vision, Mission and Values. Cummins Chairman and CEO Tom Linebarger is the only Cummins employee The other of Directors. on the Board independent of the are eight directors must stand for Each Director Company. election annually. in fulfilling its takes an active role The Board For example, it traveled to responsibilities. in 2012 to see Cummins’ Nashville, Tenn., meeting with facility, new Customer Care strategy. key Company personnel to review monitors a number of The Board issues, including: Board exercises independent judgment independent exercises Board

GOVERNANCE He joinedtheBoard in1989. K-12 educationandthearts. Wallace Foundationfocused on President oftheNewYork-based William I.Miller He joinedtheBoard in2008. D.C.-based consultingfirm. Partners, LLC,aWashington, Managing Director ofKalorama Robert K.Herdman He joinedtheBoard in2008. the UniversityofNotre Dame. a Professor ofEngineeringat PresidentVice for Research and Robert J.Bernhard He joinedtheBoard in2004. Investment Properties LLC. and President andCOO,Ware Retired Coca-Colaexecutive Carl W serves asLeadDirector. the Board in2001andcurrently consulting company. Shejoined Ventures, LLC,acorporate Chairman andCEOofNew Alexis M.Herman He joinedtheBoard in2009. based inHouston,Texas. spaceflight engineeringcompany Astra RocketCompany, aU.S. Chairman andCEOofAd Franklin Chang-Diaz SUSTAINABILITY2012–2013 REPORT are He joinedtheBoard in2010. project managementservices. construction, maintenance,and that offers engineering,procurement, Corporation, aFortune500company Senior Group President atFluor Stephen B.Dobbs the Board in2009. Officer, Cummins Inc.Hejoined Chairman andChiefExecutive N. ThomasLinebarger She joinedtheBoard in2004. independent consultingfirm. PTI Resources, LLC,an President andCEOof Georgia R.Nelson 117

GOVERNANCE function was shifted in 2012 to Corporate function was shifted The function also underwent Strategy. an audit in late 2012 and early 2013, to and weaknesses. identify both strengths The development of Business Continuity an important responsibility Plans remains of the Risk Management team. BUSINESS CONTINUITY PLANS Business Continuity Plans at Cummins detail step-by-step what has to be done to keep a location operating. The Risk Management team has overseen the than 160 plans over completion of more the past few years and has set a goal of completing a plan for every Cummins location, including all wholly owned and Distribution Business Unit joint-venture sites, by the end of 2014. accomplish this goal, plans for more To than 400 locations will be necessary. The team is working to train a person at each site to complete a plan, significantly the amount of travel necessary. reducing Risk Management leaders believe this sustainable is both more new approach embedding business effective, and more SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 118 Super Storm Sandy, which devastated which Super Storm Sandy, much of the East Coast of the United States in the fall of 2012, was merely of what can happen the latest reminder to businesses that fail to manage risk to (see Cummins’ response effectively Sandy on page 126). its risk Cummins has broadened years, in recent management efforts focusing not just on how to keep particular locations operating in the midst of a crisis, but how to keep global critical functioning that are processes to meeting customer needs in particular the world. of regions The Risk Management team continues for the Cummins a dashboard to prepare and senior leaders of Directors Board outlining the biggest risks facing the is constantly The dashboard Company. changes in and outside updated to reflect Cummins, and the Company frequently assigns teams of employees to develop steps to mitigate specific risks using Six evaluation tools. and Sigma research Underscoring its strategic significance the Risk Management to the Company, Cummins strongly believes that a robust Risk Management a robust Risk Management strongly believes that Cummins of any company. critical to the sustainability program is risks, Managing secure employees keeping

GOVERNANCE pertinent information. websitewith access aninternal information, traveltips,andcanalso to dailyemailswiththelatestsecurity Employees whotravelcansubscribe does business. risk inalllocationswhere Cummins vendors andadvisorstoassessregional workplace. Theprogram worksthrough partners duringbusinesstravelandatthe is designedtosupportemployeesand The Travel Smart Travel Safeprogram number ofinitiativestocarryoutitsmission. Global Securityteamhasestablisheda physical andinformationassets,the Cummins’ employeesaswellits Focusing ontheprotection ofthe the Company. the conceptof“securityfirst”throughout overall sustainability, strivingtoembed an increasingly importantrole inCummins’ The GlobalSecurityfunctionisplaying bigger role Global Securityta kes on their operations. business continuityplanningtoimprove Directors in2013onhowsitescanuse made apresentation before theBoard of Generation’s headquartersinFridley, Minn. plans, employeesfrom CumminsPower To helpbringadditionalattentiontothe earlier intheprocess. every sitebyinvolvinglocalemployees continuity planningintotheculture of environment andasustainablefuture. programs thatpromote asecure long-term successbyimplementing Security isfocusedontheCompany’s Through thiswork,CumminsGlobal managed through normalchannels. Company, or thepublic,cannotbe when anemergencyaffecting the Cummins tomovequicklyandefficiently measured response. CAMPenables in order toachieveanimmediate and monitoring andrapidcommunication CAMP relies onpersistent intelligence communities inwhichCumminsoperates. affect theCompany, employeesandthe teams toquicklyassessincidentsthat local, regional andcorporate response Management Program (CAMP) leverages Implemented in2012,theCrisisAction right processes fortheright levelofsecurity. the program ensures employeesfollowthe Although riskcanneverbefullyeliminated, information securityacross theenterprise. implements, andmanagesCummins Asset Protection Program develops, Company information.TheInformation requires Cumminstoprotect sensitive Ensuring sustainablegrowth encounter issueswhiletravelling. with anemergencyhotlineshouldthey The program alsoprovides employees SUSTAINABILITY2012–2013 REPORT 119

GOVERNANCE POLITICAL CONTRIBUTIONS Cummins bans contributions using corporate funds to candidates, political parties and independent expenditure campaigns. This ban includes contributions to 501 (c) (4) and 527 tax-exempt the United States engaged in groups in political activity. deemed important On ballot measures Cummins interests, to the Company’s is committed to publicly disclosing any to influence payments made directly names the outcome, including recipient and amounts. In the United States, political contributions made by the Cummins Inc. Political are but the Action Committee (CIPAC), committee is funded solely by voluntary makes employee contributions. CIPAC contributions to state and federal candidates on a bipartisan basis by CIPAC’s and approval after review Executive Committee and according to state and federal law. For a complete list of the political action contributions to candidates, committee’s go to www.fec.gov. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 120 The Company maintains an office in The Company maintains an office D.C., but with half or Washington, years sales in recent of Cummins’ more outside the United States, coming from the Company also has government employees in China and India. relations that These employees work to ensure For example, Cummins’ voice is heard. Cummins works extensively to promote globally emissions standards and protect or modification and supports delay from government to establish greenhouse efforts for gas and fuel consumptions standards vehicles. commercial Cummins belongs to a number of trade organizations to further its business These organizations help interests. the Company by leveraging Cummins’ companies on with other resources similar positions. we share issues where with the While Cummins might not agree positions these associations take on every issue, the Company believes participating government helps ensure in these groups Cummins stands on know where officials matters critical to the Company. Cummins has government relations employees around the employees around has government relations Cummins impact have a significant on issues that might world working environmental such as energy policy, on the Company, just a few. to name taxes, trade and transportation legislation, Ensuring Cummins’ voice is heard voice Cummins’ Ensuring

GOVERNANCE annual political contribution report. to theCumminsBoard ofDirectors inan All ofCIPAC’s politicalactivitiesare disclosed » » » » » » on thefollowingcriteria: and politicalorganizationsare based Contributions topoliticalcandidates » » » » policies andbylawsthatstate: CIPAC bycorporate isgoverned » » » » » » » » » » Support fortheCompany’s values. Political leadershipororganization. andeffective constituentservice. Timely to Cummins. Support forissuesofimportance or employees. Representation ofaCumminsfacility Public integrityofthecandidate. an employee’s career inanyway. CIPAC shallnotdisadvantage A decisionnottocontribute other personalpoliticalcontribution. to contributeCIPAC ormakeany Employees willnotbepressured political contributions. employees directly orindirectly for The Companywillnotreimburse strictly voluntary. All CIPAC contributionsare U.S. ChamberofCommerce The NationalAssociationofManufacturers The EngineManufacturers Association $127 The DieselTechnology Forum The BusinessRoundtable The AmericanTrucking Association or otherpoliticalexpenditures. used byeachorganizationforlobbying estimation oftheportionthesedues Listed witheachentityisCummins’ which fellbelowthe$50,000threshold. 2012 andtheU.S.ChamberofCommerce, in excessof$50,000duringcalendaryear organizations towhichCumminspaiddues The followingisalistofU.S.trade LOBBYING SUSTAINABILITY2012–2013 REPORT $8,682 $12,528 $13,750 $15,759 $24,261 121 power usage. have slashedthemilitary’s produced byCummins learn howpowergenerators official, wereattheplantto Department’s topenergy and Burke,theDefense Minnesota intheU.S.Senate, left. Franken,whorepresents President Tony Satterthwaite, Cummins PowerGeneration Sharon Burke,right,and ofDefense Assistant Secretary May 2013.Heisjoinedby Plant inFridley, Minn.,in Cummins PowerGeneration U.S. Sen.AlFrankentoursthe

GOVERNANCE “After a strong start to the year, demand start to the year, “After a strong most geographies declined across and end markets in the second half of 2012 as the global economy slowed,” Cummins Linebarger, said Tom Chairman and CEO. able to deliver “I am pleased that we were margins in the fourth gross improved for the margins gross quarter and record full year despite the weakness in demand,” Linebarger said. “The work we have costs and lower undertaken to reduce inventory should benefit the Company when the global economy improves, is uncertainty surrounding there however, in the timing and pace of improvement end markets in 2013.” of $4.3 billion in Fourth quarter revenue the from decrease 2012 was a 13 percent weakness same quarter in 2011, reflecting in most major markets and geographies. was driven year-over-year The decrease by weaker demand in truck, construction, and oil and gas markets in North America. The Company also experienced lower demand in international for power markets generation equipment and construction, truck and mining engines. $755 million $428 million $1.04 billion $1.85 billion $1.65 billion Net income attributable to Cummins SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 122 Revenues were $17.3 billion compared $17.3 billion compared Revenues were to $18 billion in 2011. Despite the drop, year it was the second best revenue Revenue for 2012 in Company history. over increase a 31 percent represented over 2009. increase 2010 and a 61 percent its dividend by The Company increased quarter of 2012 and in the third 25 percent Fitch Rating Services raised its Long-term Issuer Default Rating and long-term debt A- to A despite ratings for Cummins from the challenging economy. $14.3 billion $10.8 billion $13.2 billion $18 billion $17.3 billion 2008 2009 2010 2011 2012 a glance Financial performance at a summary of Cummins’ performance since 2008. Here’s Sales Year After a record start, revenues slowed considerably considerably start, revenues slowed After a record global a amid half of 2012 for Cummins in the second economic slowdown. Global economic slowdown economic slowdown Global slows Cummins Financial

FINANCIAL Stoughton, Arcadia, BlackRiverFallsand Cummins solditsexhaustoperations in $1.62 billion($8.54perdilutedshare). reported fullyearnetincomeof ($0.02 perdilutedshare), theCompany of theCompany’s exhaustbusiness diluted share) andthegainonsale share), one-timetaxbenefits($0.29per of restructuring actions($0.18perdiluted diluted share) in2011.Excludingthecosts share), downfrom $1.85billion($9.55per full yearwas$1.65billion($8.67perdiluted Net incomeattributabletoCumminsforthe of salesin2011. compared to$2.6billionor 14.2percent was $2.35billionor13.6percent ofsales, for theyear, excluding specialitems, BeforeEBIT (Earnings Interest andTaxes) declines inBrazil,ChinaandEurope. about 15percent, withthe mostsignificant saleswhichdroppedby international America were up9percent butwere offset For theentire year, revenues inNorth of CumminsEmissionSolutions. doser technologywillbecome part Hilite’s selective catalyticreduction control products ofHiliteInternational. the assetsassociatedwithemissions it hadsignedanagreement toacquire Cummins announcedinMay2012 development ofnewproducts. projects, muchofitrelated tothe over $1billionincapitalexpenditure Cummins anditsjointventures invested up 16percent from 2011.Inaddition, $728 millioninresearch anddevelopment, The Company, however, investedarecord non-exempt employees. about equallysplitbetweenexemptand of itsworkforce byabout1,300 people– conditions, includingreducing thesize in response tothedifficult economic actions during2012tolowerexpenses The Companytookanumberof Australia in2011toaprivateequityfirm. andScoresbyViroqua in inWisconsin SUSTAINABILITY2012–2013 REPORT 123 Center –inMarch2013. the PhaltanMidRangeUpfit at theMegasiteinIndia– inaugurate thefifthfacility India AnantTalaulicar Director forCummins Linebarger andManaging Chairman andCEOTom Innovation Points of Financial » » » » trucks (page124). for Rampickup 2-millionth engine Cummins builds (page 126). Super StormSandy first in responding to Team puts customers

FINANCIAL “At Cummins, we take great pride in “At Cummins, we take great each and every engine we build – whether the first or the 2-millionth,” he said. it’s marking the engine In its own news release milestone, Chrysler noted the partnership has benefited both companies. diesel “The Ram Truck-Cummins most partnership is one of the industry’s enduring and certainly fitting of such a and Diaz, President tribute,” said Fred Brand and Chrysler de CEO – Ram Truck Mexico. “Both companies have benefited the but Ram diesel customers are greatly, Every day they experience beneficiaries. real the toughness and capability a Cummins- Ram can deliver.” powered so special about Cummins- What’s the combination It’s Ram Trucks? powered durability and innovation that of power, loyal following has led to an extremely of pickup truck owners. frequently Cummins employees say they are stopped by strangers who upon learning they work tell them: “I just love the where Cummins engine in my Ram Truck.” Diesel powers The Cummins 6.7L Turbo the Ram 2500 and 3500 heavy-duty pickup trucks and is also available in the Ram 3500, 4500 and 5500 chassis cabs. SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 124 Cummins has been building diesel engines Cummins has been building diesel engines since the first engine for for Ram Trucks the line at the Rocky Mount off Ram rolled Engine Plant in Rocky Mount, N.C., in 1988. Over the past 25 years, the Company has than 2 million engines for more produced LLC. Chrysler Group “This milestone build is a significant achievement for Cummins and our employees, and is an accomplishment said immensely proud,” of which we are General Manager – Ripberger, Wayne Vehicle Pickup and Light Commercial Operations. He was speaking after the 2-millionth engine was built for Ram pickups in December 2012 at the Columbus (Ind.) MidRange Engine Plant. To commemorate the To occasion, the 2-millionth engine sported a special edition red breather cover and valve cover. Enduring relationships pass the test of time whether it’s it’s test of time whether pass the Enduring relationships That’s relationship. a friendship or a business a marriage, diesel partnership. of the Ram Truck-Cummins certainly true Ram-Cummins partnership partnership Ram-Cummins major milestones celebrates

FINANCIAL constant: proven Cumminspower. but there isonethingthathasremained improvements totheentire package, engine celebration.“We’ve madegreat Cockell, whoattendedthe2-millionth said RamHDBrandManagerMike “We’ve comealongwaysince1988,” 2014 RamTrucks. building enginesforthemodelyear later in2013whenCumminsbegins The 25thanniversaryofficially comes » » » » » to expect,including: innovation thatcustomershavecome HD trucksfeature thesame kindof The 2013Cummins-powered Ram » » » » » B20 biofuelcapability. a “Smart”exhaustbreak. Improved towingthanksto oil changeinterval. Best-in-class 15,000mile Best-in-class 850lb-ftoftorque. A 10percent fueleconomy improvement. the 2.5-millionthengine.” back here inacoupleyears celebrating Ram trucks,”headded.“We hopetobe the 2013CumminsTurbo Diesel-powered Cummins, andwe’re also excited about “We’re proud ofourheritagewith “This milestonebuildisa SUSTAINABILITY2012–2013 REPORT vehicle operations the firstor2-millionth.” General manager – we build–whetherit’s we takegreatpridein which weareimmensely for Cumminsandour significant achievement accomplishment of each and every engine each andevery employees, andisan wayne ripberger pickup andlight commercial proud. AtCummins, 125 facilities inColumbus,Ind. parts aroundCummins the truckwasusedtomove Prior totherestoration, Turbo DieselinaRamchassis. test theviabilityofaCummins and wasthefirsttruckbuiltto is a1985DodgeRamD350 development truck.Thetruck first CumminspoweredRam of theteamthatrestored and ThomasSalleewerepart Streeval, DavidCrawhorn to right)ClintGarrett,Justin Cummins employees(left partnership withChrysler, To honortheCompany’s

FINANCIAL Steve Philips spent long hours helping Cummins customers from his New Jersey home after Super Storm Sandy flooded his office. Philips wasn’t the only Cummins employee Philips wasn’t who lost sleep after Sandy hit in October 2012, packing 80 mph winds and pushing New a 13-foot surge of sea water toward City that flooded subway tunnels and York electrical systems that the underground An estimated 6 million Street. power Wall lost power. people in the region SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 126 Three hours later, he was back working later, hours Three the phone again, trying to find generators for desperate customers in New York and New Jersey left powerless by the mammoth storm. just gotta try to help everyone you “You can,” said Philips, General Manager – district. Rental Power for the New York He knew first-hand how his customers felt. The power was out at his home and was underwater at Cummins his office Power Systems in Newark, N.J. At the height of Super Storm Sandy, Cummins Power of Super Storm Sandy, At the height hours without sleep, Philips went 21 Systems’ Steve per hour until he finally ringing 40 or 50 times his phone Jersey home, his computer and nodded off at his New cell phone in his lap. Putting customers first first customers Putting of Sandy in wake Scott Patrohay, President – Scott Patrohay, Cummins Power Systems, LLC, points to the water line on a Cummins truck caught in the flood waters left by Super Storm Sandy facilities at the company’s in Newark, N.J.

FINANCIAL or more gratefulfortheirtremendous effort.” Bristol, Penn.“Icouldn’t beprouder ofthem – CumminsPowerSystems,LLC,basedin own lives,”saidScottPatrohay, President in their of themhadsignificantconcerns of ourcustomersfirstatatimewhenmany “So manyofouremployeeswere thinking 200 megawattsofpower. cable andgeneratingmore than collectively deployingnearly30milesof equipment were operating intheregion, 400 piecesofCumminsPowerGeneration Before theworstwasover, nearly as possibleafterthestorm. operations upandrunningasquickly long hourstocleardebrisgettheir Warehouse andservicepersonnelworked they were monitoringona 24-hour basis. customer locationsnexttothegenerators Cummins technicianssleptoncotsat flooded subwaytunnelsduringSuperStormSandy. Pump Trains thatplayedacriticalroleinreopening works ononeofthethreeNewYork CityTransit Authority Cummins PowerSystemstechnicianJoeMagnone minute request forhelp.” they responded soquicklytoourlast- the broken pumptrain.“I’mverygrateful authority’s railyard, saidoftherepair to Carderi, superintendentofthetransit “It wasmuch,muchneeded,”Vince getting thesubwaysystemupandrunning. the pumptrainswouldplayakeyrole in back inserviceandforthenext10days The teamwasabletogettheengine Service SupportTeam forhelp. Cummins PowerSystems’Bronx Engine approached, thetransitauthority called pump trainwouldbeneededasthestorm Friday before thestorm.Realizing every One ofthetrainswasoutservice subway tunnels. gallons ofwaterperminutefrom flooded capable ofpumpingoutthousands contributed inavarietyofotherways. the stormresponse, Cumminsemployees While therental powerplayedavitalrole in country’s largestrental companies. owned andoperatedbymanyofthe of otherCumminspowered generators North Americatohelpout,joininghundreds their fleetsof rental generatorsfrom across Cummins distributorsquicklymobilized City Transit Authority PumpTrains, each engines thatpowered the three NewYork For example,techniciansworkedonthe SUSTAINABILITY2012–2013 REPORT 127

FINANCIAL Cummins’ five-year supply chain Cummins’ five-year in late 2010 and transformation started 2012. was achieved in significant progress the Company’s As part of the journey, supply chain organization committed of sales. costs by 1 percent to reducing The organization identified $85 million cost savings in 2012 and in project as a direct $64 million was realized bottom-line value to Cummins. focused on The majority of the projects the transportation and logistics, where Company was able to better leverage and drive its spending on freight and utilization. efficiency improved “Our vision for supply chain transformation encompasses our Company-wide our environmental commitment to reduce impact, leverage a diverse supply base, said Lisa and develop our talent globally,” – Global Supply Vice President Yoder, Chain and Manufacturing. “Integrated, yet focused, strategies purchasing, have been developed across planning, manufacturing, warehousing, and transportation,” she added. One example of a cost savings was the implemented in project, provider parcel January 2012. With a focus on Cummins’ transportation costs, the Company express expenses its current was able to reduce rates were by $2.9 million. Improved SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY 128 The Company uses a broad definition of definition a broad The Company uses everything from supply chain to include a product orders the moment a customer delivery and beyond. production, through the supply chain is one of Cummins’ Today, accelerators, built around five key growth commitment to customer the Company’s and service while also driving efficiency profitability. to improve cost reduction Cummins wants to develop a Cummins wants to develop highly integrated network of lean, green and flexible plants supply chain. in the Company’s This employee at Cummins Emission Solutions in Mineral Point, Wis., is working on an aftertreatment system. Cummins’ commitment to sustainable growth commitment to sustainable Cummins’ supply chain. fully integrated global relies on a Committed to a global supply chain chain supply global to a Committed

FINANCIAL Company withthesuppliesneeded to its supplychainsnotonlyprovide the Cummins isworkinghard toensure employees liveandwork. where Cumminsdoesbusinessandits – suppliers,customersandthecommunities sites toincludeallelementsofsustainability will expanditsfocusfrom manufacturing supply chaintransformation,theCompany As Cumminscontinuestoexecuteits that enabledthedutytobereclaimed. documentation tofulfillthe requirements Cummins wasabletoprovide thenecessary customer. By workingwiththecustomer, and subsequentlyexportedbythe The product wasimported byCummins to reclaim $1.1millioninimport duties. The Companyalsoworkedwithacustomer residential surcharges. of servicesprovided andreduced its achieved asCumminsreviewed thetypes combined volumes.Furthersavingswere realized byaggregating andconsolidating “Our visionforsupply Company-wide commitment and manufacturing vice president– to reduceourenvironmental Global supply chain supply base,anddevelop our talentglobally.” encompasses our chain transformation lisa yoder impact, leverageadiverse

a cleaner, healthier, saferenvironment.” mission that“everythingwedoleadsto expectations butalsofulfillingCummins’ to notonlyexceedingcustomer strengthen theCompany’s commitment growth. Executingonthis vision will supply chainstoestablishprofitable The Companyenvisionsmarket-driven rather thandiscarded,” Yoder said. materials thatcanbereused orrecycled don’t travelhalfemptyand usingshipping combining shipmentssothatdeliverytrucks packaging onproducts to minimize waste, identifying waystoreduce theamountof “Building sustainablesupplychainsmeans environmental bestpractices. neutral plantswithindustry-leading chain includesafocusoncarbon- The future ofCummins’supply array oflean,green andflexibleplants. network toahighlyintegrated from aninflexibleanddisconnectedglobal Cummins’ long-termvisionistomove its environmental footprint.Partof customer base,butalsowaystoshrink meet thedemandsofitsgrowing SUSTAINABILITY2012–2013 REPORT 5 4 3 2 1 for sustained,profitable growth. Theyare: Cummins hasestablishedfivegrowth accelerators Cummins GrowthAccelerators and highperforming teams. Investing inleadership development Delivering customersupport excellence. Achieving supplychainexcellence. Advancing fromamulti-nationaltoglobalcompany. Adopting agrowthmindset. 129

FINANCIAL

Cummins’ sustainability reporting doesn’t end with this document.

Go to our website – www.cummins.com/sustainability – for regular updates on how we’re meeting the needs of all of our stakeholders and practicing good corporate citizenship.

CONTACTS Production Notes

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