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. and istheCompany’s 10thannualedition. This report waspublishedinMay2013 stakeholders, todayandinthefuture. wants tomakeadifference forallofits As aglobalcompany, Cummins stronger communities. product developmenttobuilding enables investmentineverythingfrom without afirmfinancialfoundationthat believes thatitcan’t besustainable financial performance.TheCompany practices, communityinvolvementand alongwithenvironmentalgovernance as safety, diversity, leadershipand sustainability, includingsuchthings Cummins takesabroad view of the importanceofsustainabilityreporting. General’s GlobalCompacttopromote Program andtheU.N.Secretary with theUnitedNationsEnvironment in 1997andworkstodaycollaboration Responsible Economiescreated theGRI The CoalitionforEnvironmentally economic componentsoftheirbusiness. report ontheenvironmental, socialand companies around theworld tovoluntarily GRI istodevelopaconsistentwayfor Reporting Initiative(GRI).Thegoalofthe is presented inthespiritofGlobal Cummins’ 2012-2013SustainabilityReport ABOUT THISREPORT all across Cummins onpage14. about theinnovativethingshappening plant isremanufacturing. Readmore Meza Sosaholdsafuelinjector thatthe return themtousefullife.Cummins’ Karina each year, usinginnovativetechnologyto pumps andElectronic Control Modules Mexico, restores nearlyamillioninjectors, Cummins FuelSystems’plantinJuárez, ABOUT THECOVER and JackieYeager. Matt Weilhamer, BlairWest, StacyWyatt Suchotzky, Todd Swingle,JanetWilliams, Smith,Grant Rosann Scatttoloni,Ernie Meredith Sanders,Stephen Sanders, Brian Pence,S.Ravichandran,AlanResnik, Nendick, AndyPajakowski,PramodPalat, Zack McCrory, PaulMiller, JonMills,Steven Yangnan Liu, AnnieMack,SaraMcAninch, Kuhl, ChristineKuo,Carol Lavengood, Melina Kennedy, DavidKoeberlein,Philip Sheah Hilton,MollyHoward, JoannJones, Elena Grimm,ColleenHahn,ElliotHayden, Emily Foster, Clint Garrett, DavidGoggin, Joy Fischer, Angela Flood,JohnForte, Dickerson, RoeEast,BillFak,ScottField, Clark, SarahLaurieCounsel,Anna Brandt, Carole Casto,Karen Cecil,David year included:MarshaAllamanno,Cory Cummins employees.Contributorsthis design andtechnicalexpertiseofmany This report relies onthewriting,editing, CONTRIBUTORS 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..... Innov Our recognition...... values andprinciples...... mission, Vision, Our history...... How wedoit...... Who weare...... Cummins around theworld Letter from thechairman...... Introduction Table ofcontents ation ...... 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 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 key tosustainability...... Developing newleaders Diversity Procurement goesglobal...... inclusive workenvironment...... Employee groups create Pursuing diversityinIndia and inclusion...... The powerofdiversity relations Employee 3 ...... 128 126 124 122 104 120 118 116 112 110 108 106 102

INTRODUCTION INTRODUCTION and visiontobuildonDiesel’s workovertime. to useRudolfDiesel’s technologyandthenhadtheingenuity 94 yearsagowhenClessieCumminsfirstobtainedalicense Company well.Infact,Cumminswasfoundedoninnovation year’s 2012-2013SustainabilityReportdescribesour “Innovative. Engaged.Sustainable.”Thetitleofthis Letter from thechairman 2 employees serving everybusinessunit in ourfacilitiesacross theworld,tooffice the shopflooremployeesmaking ithappen the engineersdesigningourproducts, to Cummins everydayandeverywhere, from heroes ofinnovationcanbefoundallacross on. You’ll seeinthisyear’s report thatour I’m pleasedtoreport thattheirlegacylives customers byhelpingensure theirsuccess. new existing customerneedsandearn innovation ineverythingtheydidtomeet contributions theymade,embedding inspiring andremind usof the tremendous lot ofoursuccesstoday. Theirstoriesare who collectivelylaidthefoundationfora Clessie, Dr. Julius PerrandDr. AlynLyn – innovative giantsovertime–suchas by appropriately celebrating Cummins’ This year’s SustainabilityReportstartsout of ourCompanyintothefuture. globe willsecure thelongterm sustainability more than46,000employees across the innovation drivenbytheengagementofour original Diesellicensees.Andthecontinued remains from themore than100other independent dieselenginemakerthat Today, ourCompanyistheonly SUSTAINABILITY2012–2013 REPORT » » you’ll findinthisyear’s report: of thekindsinnovationstoriesthat faster, first.” Here are justafewexamples ingenuity necessarytomakeusbetter, six core values,asusingthe “creative We defineinnovation,one ofCummins’ around theworld. footprint andbuildingstronger communities shrinking theCompany’s environmental delivering outstandingcustomerservice, They are producing thebestproducts, and function,everywhere inbetween. » » Company creates. 90 percent ofthewastethat which hasresulted inrecycling almost created atourfacilitiesaround theworld, to reduce theamountofsolidwaste employees’ leadershipinfindingways Our Health,SafetyandEnvironment to improve theenvironment. community involvementprojects skills andtalentstocarryout join togetherusingtheircreativity, where teamsofCumminsemployees Environmental Challengeinitiative Our CorporateResponsibility 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

INTRODUCTION INTRODUCTION Australia Cummins announced in January 2013, that Australia would be the first market in the ISXe5 the world to offer heavy-duty truck engine. The engine meets Euro 5 emissions regulations Cummins’ proven through SCR technology. 5 China CHINA Wuxi – Wuxi Cummins Turbo Technologies Technologies Cummins Turbo – Wuxi Wuxi its 7-millionth CTT) produced Co. Ltd. (Wuxi of 2012. Plant turbocharger in December to celebrate leaders held a small ceremony the achievement.

SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY India Phaltan – The fifth facility at the Cummins Phaltan – The fifth Megasite, the Phaltan MidRange Upfit Center, 26, 2013, by was inaugurated on March and Anant Linebarger Chairman and CEO Tom Cummins India. Managing Director, Talaulicar, The state-of-the-art facility is designed to 80 engines per day in two shifts. manufacture atar Q atar Q Doha – Less than a year after it started business in January 2012, Cummins Qatar LLC held Team activity. its first Community Involvement 37 employees Thirty-four of Cummins Qatar’s helped clean up one of the most visited 23, 2012. in Qatar on Nov. seashores m UNITED kingdo London – Cummins played a significant played a significant London – Cummins in 2012. in the Summer Olympics role The International in the heart Media Center a Cummins of London was equipped with power and natural gas generator for backup 30,000 Cummins- a significant number of the fans to buses in the country ferried powered the games. and from Angola Luanda – Cummins Angola Lda opened its doors for business on officially partnership 15, 2012. The joint venture Nov. is ideally situated to develop significant power generation, mining, marine and filtration opportunities in Angola. United kingdom 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 INTRODUCTION 7 Cummins Distribution sells and Power Gen is a global provider of Power Gen is a global provider SUSTAINABILITY REPORT REPORT 2012–2013SUSTAINABILITY Cummins distribution business services the full range of Cummins products for over 20 application services the full range of Cummins products the globe. segments in over 190 countries around The Engine Business manufactures and markets a manufactures The Engine Business business Cummins power generation power generation systems, components and services in standby power, distributed and services in standby power, power generation systems, components in mobile applications. It also provides power generation, as well as auxiliary power operation and maintenance contracts a full range of services including long-term and turnkey and temporary power solutions. complete line of diesel and natural gas-powered engines for on-highway and off-highway and off-highway engines for on-highway and natural gas-powered complete line of diesel light-duty trucks and industrial heavy- and medium-duty trucks, buses, use. Markets include marine, oil and gas and military equipment. uses such as agricultural, construction, mining, Cummins engine business Components business exhaust aftertreatment Cummins Emission Solutions designs and manufactures markets. and high-horsepower engine and heavy-duty, technology and solutions for the medium- fuel, hydraulic Cummins Filtration designs and builds heavy-duty air, system technology products. and lube filtration, chemicals and exhaust new fuel systems. Cummins Fuel Systems manufactures designs and builds Technologies Cummins Turbo products. turbochargers to boost engine power and related electronic designs and procures Cummins Electronics and tools, software base controls develops hardware, Modules. Control Electronic and rebuilds How we do it we do How business units: is organized into four Cummins

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 ho we are Who we

INTRODUCTION INTRODUCTION how Cumminsdoesbusinesstoday. responsibility andethicsarestillpartof leader whoseviewsondiversity, corporate BELOW J.IrwinMillerwasavisionary Motor Speedwaypoweredbydieselengines. sponsored racecarsattheIndianapolis and durabilityofdieselengines.Heeven buses andtruckstodemonstratethepower tripsoncars, genius, makingcross-country Clessie Cumminswasapromotional In additiontobeingatirelessinnovator, 8 SUSTAINABILITY2012–2013 REPORT 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 INTRODUCTION Seek aworldview andactwithoutboundaries. Global Invol and honorbothwithdignity respect. Embrace thediverseperspectives ofallpeople Diversity Serve andimprove thecommunitiesinwhichwelive. Corporate Responsibility Exceed expectationsconsistently. Deliver SuperiorResults better, faster, first. Apply thecreative ingenuitynecessarytomakeus Innov Strive todowhatisrightandwesaywilldo. Integrity Values » » » » » We unleashthePowerofCumminsby: MISSION unleashing thePowerofCummins. Making people’s livesbetterby VISION values andprinciples Vision, mission, » » » » » Creating wealthforallstakeholders. to acleaner, healthier, saferenvironment. Demanding thateverythingwedoleads to makesure theysucceed. Partnering withourcustomers with thebestproducts. by alwaysbeingthefirsttomarket Exceeding customerexpectations working together. Motivating peopletoactlikeowners, ation vement 10 SUSTAINABILITY2012–2013 REPORT Agile. Passionate.Caring. Decisive. Driventowin. Personality and continuousimprovement. conducive toexcellentperformance and culturalworkenvironment is Cummins willassure thatthephysical Create theRightW success andourCompany’s performance. technologies mostcriticaltoourcustomers’ Cummins willbethemarketleaderin Lead inCriticalTechnologies strategy ofcostleadership. Cummins willpursueanoperational Relentlessly PursueCostLeadership can establishanadvantage. industry dynamicsandwhere Cummins grow inmarketsegments with favorable leveraging ourassetsandcapabilitiesto Cummins willseekprofitable growth by Seek Profitable Growth principal driversofshareholder value. Growth (notRevenueGrowth) asthe focus onROE/ROANAandEarnings by growth inshareholder value.We will Cummins’ financialsuccessismeasured Increase Shareholder V across businessboundaries. and applyinginnovativetechnology customers byleveragingrelationships businesses thatcreate valueforour Cummins isafamilyofcomplementary Leverage ComplementaryBusinesses Strategic principles ork Environment alue 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 INTRODUCTION that touchonsustainability, including: Cummins receivedrecognitioninseveralareas Our recognition 12 and SupplierAwards Ceremony in2012. LLC duringitsAnnualStrategyMeeting Supplier oftheYear byChryslerGroup Cummins wasnamedSustainability management andwaterconservation. best practicesforeffective waste by theGreentech Foundationrecognizes automobile sectorin2013.Theaward Award inthesilvercategoryof 13th AnnualGreentech Environment Tata CumminsLimitedinIndiawonthe over theCompany’s rankingin2011. global rankings.Thatwasup108spots magazine’s U.S.rankingsand134thinthe 2012. TheCompanyfinished64thinthe Top 500Green Rankingslistannouncedin The CompanywasnamedtoNewsweek’s responsibility factors. economic, environmental and social rated byDowJonesoverarangeof world’s mostsustainablecompanies represents thetop10percent ofthe an eighthconsecutiveyear. Theindex Jones SustainabilityIndexin2012for Cummins wasagainnamedtotheDow ENVIRONMENTAL SUSTAINABILITY2012–2013 REPORT Company hasbeennamedto the list. 12th timeinthelast13yearsthat the 100 BestCorporateCitizens.Itwasthe Cummins toits2012listoftheworld’s Corporate Responsibilitymagazinenamed was namedtothelist. the sixthconsecutiveyearCummins and corporateresponsibility. Thiswas ethical leadership,compliancepractices evaluates companies’commitmentto Ethisphere Institutein2013. TheInstitute World’s MostEthicalCompaniesbythe The Companywasnamedoneofthe on thelist. Foundation. Cumminsranked25th on CitizenshipandthePointsofLight by Bloomberg,theNationalConference and beyond”in2012.Thelistiscompiled the qualityoflifeintheirlocalcommunities time, talentandresources toimprove a listofcompaniesthat“bestusetheir Cummins wasnamedtotheCivic50, AND ETHICS CORPORATE RESPONSIBILITY its extensiveenvironmental efforts. around approach tosustainability, including The Companywashonored foritsall 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

ATION V INNO on gasfromanearbylandfill. Delaware. Thesystemruns Inc., achemicalcompanyin generating systematCroda combined heatandpower protective coverarounda Construction crewslowera it turnedtoCummins. for innovativewaystoshrinkitscarbonfootprint, When aDelaware-basedchemicalplantwaslooking Keeping thespiritofinnovationalive Innov ation 14 33,000 carsfrom theroad. emissions equivalenttoremoving plant’s annualgreenhouse gas(GHG) The project isexpectedto shrinkthe for useinCroda’s operations. produced bythesystem’s twogenerators Cherry Islandlandfillandconvertsheat on methanegaspipedinfrom thenearby system from Cummins.The systemruns a combinedheatandpowergenerating about halfthepoweritneedsin2013using Croda Inc.’s AtlasPointfacilitywillget SUSTAINABILITY2012–2013 REPORT is workingonaround theworld. of manyinnovativeprojects Cummins The Delaware initiativeismerely one at aground-breaking ceremony in2012. Environment andEnergyCollin O’Mara to work,”saidDelaware Secretary ofthe in thiscaselandfillgas–andputtingit previously servednoproductive purpose– a readily availablewasteproduct that and environmental commitment bytaking “This project demonstrates innovation 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 Variable Geometry Turbochargers Innov SUSTAINABILITY2012–2013 REPORT ation inaction 15

INNOVATION

ATION V INNO injection canoptimizeaftertreatment temperatures. for loweremissions.Asmallinjection afterthemain injection toreduce noiseandprepare thechamber into thecombustionchamber slightly before themain XPI allowsforasmallamountoffueltobeinjected short foreXtreme highPressure Injection. competitors’ capabilitiesitwasnamedXPI, injection pressure. Theincrease wassofarabove at thesametimegreatly increased themaximum rail flexibilitybutmadeitmuchmore efficient and Cummins created adesignthatretained common future emissioncontrols. injection pressure capabilitywastoolowfor where goodfueleconomy isamust,andtheir But theywere inefficient forheavy-dutyapplications, separate fuelpumpwithelectronically controlled injection. flexible becausetheywere powered independentlybya used onsomesmaller, high-speeddiesels,were more “commonrail”fuelsystems,whichwereAlternative being each enginecylinderwhere combustiontakesplace. with ClessieCummins–individualfuelinjectorsfor by “unitinjectors”similartothedesignsthatoriginated heavy-dutyengineswereAt thetime,modern fueled and Efficient FuelSystem.” design, whichheoriginallycalledthe“Flexible Dr. JuliusPerr(page22)conceivedthebasic in heavy-dutyfuelsystems. was asignificantbreakthrough Cummins’ XPIFuelSystem XPI FuelSystem Innov ation inaction 16 SUSTAINABILITY2012–2013 REPORT Communist Hungaryin1956(page 22). inventor, joinedCumminsafterfleeing Dr. JuliusPerr, theCompany’s most prolific from fuelsystemstoenginebrakes. more than30patentsinareas ranging car asateenager, Cumminswasawarded A self-taughtmechanicwhobuilthisfirst when hestartedtheCompany(page20). Clessie Cumminswasaninventoratheart edge technologytokeepmovingforward. in research anddevelopmentcutting- the Companyhasconsistentlyinvested rich historyofinnovationtodrawonand The goodnewsisthatCumminshasa BUILDING ONARICHHISTORY find newwaystoinnovateinthefuture.” levels ofinnovationweenjoytodayand figure outhowweare goingtosustainthe Linebarger. “I thinkit’s really importantto Chairman andChiefExecutiveOfficer Tom going togrow inthefuture,” saidCummins to howwegrow todayand howweare “Innovation continuestobefundamental Competition toIt! to SeetheFutureFirstandBeat six core values.Employeesare beingasked promote innovation–oneoftheCompany’s launched acampaignacross Cumminsto chance. That’s whyin2013theCompany Cummins’ sustainabilitycan’t beleftto Maintaining somethingsoimportantto ™ 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

ATION V INNO assembling workteams. across the organization in in drawingexpertise from Act withoutboundaries DIVERSE TEAM CROSS-FUNCTIONAL concepts evolve. promising conceptsasthe Focus resources onmost CAPABLE SORTING RAPID AND and customeropportunities. test understandingofmarket Test designconceptsand EVOLUTION AND CONCEPT RAPID PROTOTYPING technical expertiseinkeyareas. develop andsustaindeep careerVisible pathsthat EXPERTISE DEEP TECHNICAL new technologies. to acceptanddevelop Mindset andcapacity NEW TECHNOLOGY RECEPTIVE TO profitability forCummins. Value tocustomerand See product value: TECHNOLOGY NEED OPPORTUNITY TO LINK MARET and marketopportunities. Sensing newtechnologyideas SENSING NETWORKS AND INTERNAL EXTERNAL Innov Seven Enablersof ation at Cummins 18 innovation overthenext20or30years. are thinkingalotaboutwhatwilldrive mature markets,Cumminstechnicalleaders levels approaching near-zero levelsinmost emissions power generationsystems.With every platform,from pickuptruckenginesto stringent emissionsregulations innearly at theCompanyhasbeenincreasingly the biggestdriveroftechnicalinnovation For mostofthepasttwodecades, for theCompany’s technicalfunction. comes atanespeciallycriticaltime Cummins’ campaignforinnovation CAMPAIGNING FORINNOV Company’s ChiefFinancialOfficer. PresidentVice –Financeandthe three years,”saidPatWard, Cummins’ and expecttobeinthemarkettwoor “We can’t stopinvestingintechnology to thedevelopmentofnewproducts. capital expenditures, much ofitrelated ventures investedover$1 billion in In addition,Cumminsanditsjoint 16 percent from 2011. research anddevelopment,up invested arecord $728millionin economic slowdown,theCompany to $17.3billioninthemidstofaglobal despite adrop insalesfrom $18billion and developmentisunwavering.In2012, The Company’s commitmenttoresearch even theslightestvariationcanbecritical. asked todomore thaneverbefore, enginesandcomponentsbeing With SUSTAINABILITY2012–2013 REPORT ATION and investinginnewtechnology. resources toresearch anddevelopment, to customers,devotingpersonneland She isstressing theimportanceoflistening necessary todriveinnovationinthefuture. create theprocesses, capabilityandculture units andtheirleaderswithinCumminsto Technology Planning,toworkwithbusiness Wall Director – hasaskedJoanWills, products intheeyesofour customers.” so wecancontinuetodifferentiate our and weneedtobeablecombinethose technologies betterthananyoneelse else,” hesaid.“We needto knowour individual customersbetterthananyone “We needtoknowourmarkets and into words. when theymaynotbeabletoputthem can anticipatetheirneedsanddesires even its customerssotheCompany’s engineers before forCumminstostay connectedto Wall believesitwillbemore criticalthanever the nextemissionsregulations?” when wedon’t havethatclock tickingon our businesstodeliverinnovativeproducts we interactwithourcustomersandmanage create ourownpaceforinnovation.Howdo thatstrong driver,“Without wenowhaveto product delivery. which givesusapaceandscheduleto and integratedthatintodevelopingmarkets, “We’ve beenpacedbytheleadingmarkets and ChiefTechnical Officer Dr. John Wall. Presidentover time,”saidCumminsVice of emissionstechnologyrequirements “We havehadaverystrictschedule 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 Innov SUSTAINABILITY2012–2013 REPORT ation inaction 19

INNOVATION

ATION V INNO pictures anddocuments. new archiveofhistorical building fortheCompany’s new spaceinaformerbank Linebarger cuttheribbonon Chairman andCEOTom Lyle Cumminsand with apassionfewcouldmatch. in his70s,Cummins(1888-1968)pursuedinnovation concept engineintheworkshopathisCaliforniahome he builthisfirstcarasateenagertoworkingon he couldmakethingsworkbetter. Fromthemoment Clessie Cumminsneverstoppedthinkingabouthow Problem solvingthrough innovation 20 his youngercolleaguewasdoing. Ford, wholikedtokeeptabs onwhat sometimes swapstorieswithHenry inventors. ClessieCumminswould describe asthegoldenageofAmerican the heightofhiscareer, inwhatsome Lyle grew upwatchinghisfatherat of innovatingthrough adversity.” Clessie’s son.“Thus,hislifewasone continually arose,” saidLyle Cummins, ideas were tosolveproblems that “Almost allofDad’s uniqueandcreative SUSTAINABILITY2012–2013 REPORT ways tomakerurallifeeasier. all thingsmechanical.Heloved finding life, however, washisfascinationwith a lot.OneoftheconstantsinClessie’s business andthefamilymovedaround Clessie’s fatherwasinthebarrel-making knowing more thanhisteachers. school becausehewastired of Clessie toldfamilymembersheleft after hisfamilymovedtoColumbus. education endedinthe8thgrade Lyle Cumminssaidhisfather’s formal Cummins, thedriverIrwinhired in1908. businessman W.G. IrwinandClessie and thepartnershipbetweenColumbus the foundingofCompanyin1919 and otherartifacts,muchofitinvolving The archive willholdpictures, documents in Columbus,Ind. a formerbankbuildingitrecently acquired has establishedanarchive inthevaultof preserve Cummins’history. TheCompany Company thatbearshisfather’s nameto Today, Lyle Cumminsisworkingwiththe 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

ATION V INNO but inthedoorstheyopenedforthosebehindthem. the Companycanstillbefelttoday, notonlyintheirinventions technology leaderitistoday. Inmanyways,theirimpacton Lyn eachplayedkeyrolesinhelpingCumminsbecomethe remarkable innovatoratCummins.Dr. JuliusPerrandDr. Alyn Clessie Cumminsgotitallstartedbuthewasfarfromtheonly Cummins’ innovativegiants 22 however, andPerrbecameawantedman. The Sovietsquicklycrushedthe rebellion, enjoyed freedom from Sovietrule. of 1956,heandhiscountrymenbriefly the HungarianRevolutionandinfall Union in1945.Hewas25whenhejoined his homelandwastakenoverbytheSoviet World War IIandwasonlyateenagerwhen inHungary,Perr wasborn grew upduring illustrious career atCummins. the Companyalmostovershadowshis SUSTAINABILITY2012–2013 REPORT A mostprolific But thestoryofhowhegotto inventor are stillinusetoday. Dr. JuliusPerr (1931-2005) including 80patentsthat submitted more than career atCummins, 300 patentsonengine his more than40-year and engineapplication improvements over of Technology inBudapest1972. mechanical engineeringfrom theUniversity Dr. Perrtocompletehisdoctoratein allowed toreturnHungary. Thatenabled In 1969,hewasgrantedamnestyand nozzles andmore. dealt withfuelinjectors,pumps,valves, most involvingfuelsystems.Hispatents to workonahostofengineimprovements, escaped Hungaryin1958.Hethenwent he wasjoinedbyhiswifeElizabeth,who Dr. Perrsettled inColumbus,Ind.,where eventually chosetojoinCummins. number ofautomotivecompaniesand in engineering,Perrwasrecruited bya to NewJersey. amaster’s With degree refugee program, whichbrought him He becamepartofaU.S.-Hungarian in Austria. He eventuallymadeittoarefugee camp fire from Sovietpatrol andborder guards. He escapedthrough Austria, dodging 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

ATION ATION V V INNO INNO into thefuture.Here’s aquicklookatwhattheysaid: to lookatinnovationCumminsfive,10and15years We askedsomeoftheCompany’s technical leaders The future ofinnovationatCummins and improvements totheaftertreatment andfuelsystems. energy lostinbrakinganddeceleration, advancedcombustion, the engineintousefulenergy, hybridpowertrains tocapture beyond 2017couldincludeconvertingwasteheatfrom CO The nearfuture willcontinue revolving around reducing Reducing CO 5 yearsout Possible technologyimprovements toreduce CO global warming. CO for on-board diagnosticsandfurtherimprovements required in be largelythesameasin2014.There willbenewrequirements The approach tomeetingregulations in2016and2017will economy improvement overitspredecessor. heavy-duty truckmarket,willachieveuptoa2percent fuel take effect in2014.TheISX15, thetop-sellingenginein and fuel-efficiency rules,a fullyearbefore those regulations Protection Agency(EPA) fornewgreenhouse gas(GHG) received thefirstcertification from theU.S.Environmental In late2012,CumminsannounceditsISX15enginehad fuel consumption emissions and 2 2 emissionsandfuelefficiency. CO emissionsandfuelconsumption. 24 SUSTAINABILITY2012–2013 REPORT 2

2 isakeycontributorto 2 emissions gas production andelectricpowergeneration. markets, includingtrucksand buses, oiland engines andcomponentsfora widevarietyof Cummins isaleadingproducer ofnaturalgas further upsidebeyondthat. be between10and20percent by2018with States fortheon-highwaytruckmarketmay that naturalgasadoptionratesintheUnited gas. Meanwhile,industryassessmentspredict of newrefuse truckscurrently operateonnatural 15 percent ofnewtransitbusesand50percent For example,intheUnitedStates,about reduced fuelcosts. natural gasproduction and havesignificantly New drillingtechniqueshavegreatly expanded fuelformanymarketsegments. alternative Natural gashasemergedasthemostpromising expected tocontinueoverthenextdecade. to locallyavailablefuelsources. Thistrend is emissions, improve operating costs,oradapt already fuelstoreduce exploringalternative Vehicle fleetsandequipmentoperatorsare fuels Alternative 10 yearsout » » 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 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 power sources Integrating 15 yearsout SUSTAINABILITY2012–2013 REPORT 25

INNOVATION

ENT ENT M M IRON IRON V V EN EN freight efficiency. in fueleconomyand recorded impressiveresults in Denton,Texas. Thetruck Company’s headquarters outside PeterbiltMotors The concept“SuperTruck” testing inthefallof2012onaU.S.highwayTexas. and PeterbiltMotorsCompanyturnedsomeheadsduring and anaerodynamictractor-trailer developedbyCummins The concepttruckfeaturingahigherefficiencyengine ‘SuperTruck’ off toimpressive start Update: Environment 26 and fuelefficiency. industry thatisbasedonpayload weight an importantmetricinthetransportation of Energy(DOE).Freight efficiency is program goalsetbytheDepartment exceeded the50percent SuperTruck The freight efficiency result significantly to abaselinetruckdrivingthesameroute. improvement infreight efficiency compared The truckalsodemonstrateda61percent Route 287betweenFortWorth andVernon. 10 milespergallonduringtestingalongU.S. increase infueleconomy, averagingnearly The “SuperTruck” achieveda54percent SUSTAINABILITY2012–2013 REPORT over 11 runs meeting SAE International test over 11runsmeeting SAEInternational Cummins ISX15engineaveraged 9.9mpg The Class8Peterbilt587powered bya for theSuperTruck program atCummins. said DavidKoeberlein,Principal Investigator integral partsofthetruckstomorrow,” on theconceptengineandtruckwillbe “Many ofthetechnologiesweare testing weight materialthroughout. tires withlowerrolling resistance andlighter- use route informationtooptimizefueluse, to thecrankshaft,electronic controls that converts exhaustheatintopowerdelivered The truckalsoincludesasystemthat 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 Innov 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 ation

ENVIRONMENT

ENT M IRON V EN handling systems,electronics,filtrationandaftertreatment. leadership incombustionresearch,fuelsystems,air- becauseoftheCompany’scontrol foreachmarketitserves Cummins isabletoprovidethemostappropriateemissions Products look atCumminsproductsandtheirimpactontheenvironment. practices andpartnerships.Thisreportnowtakesanin-depth Cummins pursuesenvironmentalsustainabilitythroughitsproducts, Environmental Sustainability //Products to meetcustomers’needsineach individual technical solutionsandbusiness processes The Company’s goalistodevelopthebest this businessenvironment. Cummins acompetitiveadvantagein believes itstechnicalexpertisegives of Cummins’globalsuccess.TheCompany emissions regulations isacriticalelement every countryaround theworld.Meeting regulations inalmost bygovernments There isapushforstronger environmental customers demand. performance, reliability and durabilitythat economy. At the sametime,itdelivers requirements whiledeliveringsuperiorfuel portfolio meetsorexceedsallemissions The Company’s diverseproduct to customersacross allapplications. Cummins canprovide the best solution to produce allmajorengine systems, manufacturer withthein-house capability As theonlyindependentengine 28 SUSTAINABILITY2012–2013 REPORT from justalittlemore than adecadeago. less PMandNOxcompared toemissions highway dieselenginesemit90percent relatively shorttimeperiod.Today’s on- Engines havecomealongwayin matter (PM),alsoknownassoot. hydrocarbons (HC)andparticulate oxide (NOx),carbonmonoxide(CO), Regulated emissionsincludenitrogen combustion emissionssincethe1970s. regulatory agenciesaround theworldfor Protection Agency(EPA) andsimilar been regulated bytheU.S. Environmental Cummins on-highwayengineshave Engines at therighttimeandinplaces. ensure customershavethe righttechnology, all-encompassing regional elementto historically done,butaddsaveryimportant, emissions complianceworkCumminshas market. Thisapproach builds onthe

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-HIGHW 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 AY ENGINES 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

ENT M IRON V EN manufacturing capability. environment andlocal requirements, thelocalservice local product andapplication markets, takingintoaccount power needsofspecific be adaptedtomeetthe of technologiesthatcan Cummins hasaportfolio understand theirneeds. listen tocustomersand approach, butastrategyto This isnotaone-size-fits-all market ineveryglobalregion. the rightcapabilityforeach cost-effective products with and technologiestodeliver Company’s knowledge,tools requirements byusingthe strategy tomeetcustomer Fit forMarketisaCummins Market strategy Cummins’ Fitfor a compactdesign. performance, reliability anddurabilityin designed todeliverbetterfuel economy, motor coachapplications.Theengineis truck market,emergencyvehiclesand ISX12 engineforthevocationalandwork- In 2012,Cumminsintroduced thenew year compared toa2007ISXengine. emissions byupto12metrictonsper 30 emissions. EachISX15canreduce CO Reduction (SCR)technologytoreduce Particulate FilterandSelectiveCatalytic System thatincorporatesaDiesel Turbocharger andCumminsAftertreatment Recirculation (EGR),aVariable Geometry system, thenextgenerationofExhaustGas The ISX15features theCummins XPIfuel best-in-class drivabilityandreliability. model yearengine,andmaintainsits greater fueleconomythan the2012 The engineprovides upto 2percent a fullyearaheadofschedule. (page 40)forthenewstandards – engine toachieveEPA certification States. CumminsISX15wasthefirst for allon-highwayenginesintheUnited and fuel-efficiency ruleswilltakeeffect Beginning in2014,newgreenhouse gas United States. entire lineofon-highwayproducts forthe have beenimplementedacross Cummins’ be repaired. In2013,on-board diagnostics emission-reduction devicesfailandneedto The on-board diagnosticsalertdriversif emission-control systemsontheengine. sensors tomonitortheeffectiveness of SUSTAINABILITY2012–2013 REPORT 2

The newproduct combines anEaton and reduce totallifecyclecost. lower preventive maintenance costs, 6 percent fueleconomyimprovement, 2013 thatisexpectedtodelivera3 American heavy-dutytruckmarketin new powertrainpackagefortheNorth The Companyalsoannounceda cycle) thanamodelyear2012truck. better fueleconomy(dependingonduty aftertreatment willgetatleast10percent a 6.7-literCumminsturbodieselandSCR the 2013Ramheavy-dutytrucksusing For theheavy-dutypickuptruckmarket, less CO to more fuelefficient products thatproduce to meetthelatestregulations, butalsoled The resulting innovationsnotonlyhelped off-highway engineemissions. aftertreatment systemstofurtherreduce advanced turbocharging,electronics and areas suchashighpressure fuelsystems, look beyondbasicenginetechnologiesto by 2014.ThischallengedCumminsto transitioning tonear-zero emissions been facedwiththechallengeof and European industrialmarkets have In onlythree years,theNorth American OFF-HIGHW truckload (LTL) applications. haul, regional haulandless-than- be availableinthefallof2013forline- SmartTorque2 ratings.Theproduct will transmission withnewCumminsISX15 Fuller Advantage 2 . Theoff-highway businesshas AY ENGINES ™ Seriesautomated ®

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

ENT M IRON V EN product outoflandfills. parts andkeepsCummins’ energy thanproducingnew Remanufacturing requiresless its remanufacturinginitiatives. product annuallythrough 50 millionpoundsof Cummins usestoreclaim of thehightechprocesses These employeesarepart 32 to produce dualfuelengines from Last year, Cummins announcedplans compression customers. primarily forpowergenerationandgas Company’s HighHorsepowerbusiness, for manyyears,especiallyinthe has beenbuildingnaturalgasengines the CumminsEngineBusinessUnit Independent ofthejointventure, ISX12 Gnowenteringproduction. range insizefrom 5.9-liters tothe12-liter The enginesoffered byCumminsWestport is expectedtobeinproduction by2015. diesel engine.Thenaturalgasversion engine isbasedonCumminsISB6.7 the ISB6.7G.The6.7-liternaturalgas development onanotherengine, Westport announcedithadstarted About fivemonthsearlier, Cummins with fullproduction tostartinAugust2013. of thenaturalgasenginebeganinApril, taking effect in2014.Limitedproduction SUSTAINABILITY2012–2013 REPORT expected tobeinproduction by2016. highway applications.Thatengineis heavy-duty naturalgasengineforon- The Companyisalsodevelopinga15-liter has everbuilt. high-speed dieselenginetheCompany unveiled in2011thatwillbethelargest gas versionoftheQSK95,a95-literengine Cummins iscurrently working onanatural relatively lowcost. increasing abundanceofthe fuelandits production willbenaturalgas duetothe 30 percent ofitshighhorsepowerengine Cummins projects thatby2020,nearly 4Finalemissionsregulations. Tier capable ofmeetingupcomingEPA Series enginestofollow, includingengines production inmid-2013,withotherQSK gas wellservicingapplications,willbegin 2foroiland product portfolio,QSK50Tier high-horsepower markets.Thefirstinthe 800 hpto3500(597-2610kW)for 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

ENT M IRON V EN 34 stages oftheproduct’s life. assessing itsenvironmentalimpactatall be developedusingfulllife-cycleanalysis, is oneoftheCompany’s first productsto Cummins Filtration’s UserFriendly Filter ease ofintegrationtocustomers. System offers additionalflexibilityand This EcoFitUL2Liquid-OnlyUrea Dosing Emission Solutions’product line. only urea dosingsysteminto Cummins SCR divisioninJulyintroduced aliquid- The acquisitionofHiliteInternational’s integrating anewproduct in itsportfolio. In thelatterhalfof2012,CESfocusedon particulate matter(PM),orsoot. catalyst whichaidintheregulation of a dieselparticulatefilterandanoxidation Europe, SCRsystemsare combinedwith markets suchasNorthAmericaand gas andwater. Inmanymature emissions smog andacidrain,intoharmlessnitrogen oxides ofnitrogen (NOx),which cancause exhaust fluid)dosingtechnologies,convert SCR systems,coupledwithurea (diesel support itscustomersduringthislaunch. Emission Solutionswaswellpositionedto miles ofSCRsystemexperience,Cummins over40billion meet emissionslimits.With Catalytic Reduction(SCR)technologyto Proconve P-7regulations required Selective play. EquivalenttoEuro Vregulations, the first emissions regulations comeinto In 2012,theBrazilianmarketsawits SUSTAINABILITY2012–2013 REPORT media, NanoNet its advancednanotechnologybased The businessrecently introduced its responsibilities totheenvironment. solutions whileremaining mindfulof offering customersthebestpossible system solutionstoprotect equipment, high performanceintegratedfiltration Cummins Filtrationprovides highquality, CUMMINS FILTRATION clean emissions. common railfuelsystemsessentialto protection fortoday’s highpressure This proprietary mediaprovides unmatched smallest particlevisibletothehumaneye. 4 microns –12timessmaller thanthe 98.7 percent ofallhard particlesat A firstforfuelfiltration,NanoNettraps emissions standards. of theverylatestEPA andEuropean operating underthestringentrequirements ™ , designedforengines 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

ENT M IRON V EN the UnitedKingdom. at theNoctonFenFarmin variable biomassfeedstock on biogasproducedfrom Cummins generatorthatruns learn aboutahigh-efficiency Visiting Cumminsemployees 36 The high-efficiency generatorproduces power andheatatNoctonFenFarm. mixed biowasteintogreen, renewable team created asystemthat converts Power Generation’s EnergySolutions on theeastcoastofUnitedKingdom. digestion plantona3,500-acre farm A recent exampleinvolves an anaerobic economical electricity. energy sources intoclean and technology toconvertthese“free” generator sets,whichuseproven Driving thechangeare low-BTU gas new revenue. selling thepowergeneratedtocreate costs andenvironmental footprint and and economicalelectricity–reducing their gaseousfuelsintosustainable alternative SUSTAINABILITY2012–2013 REPORT energy from multiplesources suchas can replace traditionalmethodsofsupplying from asinglesource offuel.Cogeneration of energy–usuallyelectricityandheat Cogeneration istheproduction oftwokinds and commercial facilitiesaround theworld. hospitals, schools,sportscomplexes (CHP) systemsare providing powerto Cummins’ combinedheatandpower Cogeneration use theplant’s outputasanaturalfertilizer. 7,200 tonsperyear. Andlocalfarms into theatmosphere byan estimated The project alsoreduces theCO renewable electricitysoldto thegrid. fully operational,withsomeofthe is expectedtoexceed90percent when The totalenergyefficiency oftheproject would havebeendisposedinalandfill. The systemreuses biowaste thatotherwise exhaust gasheatexchangers. a heatrecovery systemthat includes very lowemissionsandthesystemhas the biogasthatisthen usedtopowerthegenerator. An anaerobicdigestionplantonthefarm produces 2 admitted 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

ENT M IRON V EN 38 telecom andwireless towersites. power remote communityaccessTV, and traditionalACgeneratorsusedto conventional largebatteryreserve systems environmentally-friendly to alternative DC generatorsoffer acost-effective and DC Generators and thetransportoffueltogenerators. saves fuelinboththeuseofgenerators fuel efficient thantheirpredecessors, which AMMPS generatorsare 21 percent more lower totallifecyclecost. operations andincreased reliability witha greater fuelefficiency, lighterweight,quieter environmental andlogistical benefitsinclude power generatorsformilitaryusewhose Sources (AMMPS)isanew lineofmobile Cummins’ AdvancedMediumMobilePower Power Sources Advanced MediumMobile trucks andoff-highway vehicles. vehicle applicationssuchasbuses, be appliedacross arangeofcommercial power generationinvehicles.Thesecan range extendersolutionsandelectrical hybrid systems,electricvehicledesigns, performance characteristicssuitablefor It isavailablewithpower, torque and and emissionsreduction. improvements invehiclefuelefficiency SUSTAINABILITY2012–2013 REPORT means areduction intheircarbonfootprint. whichinturn better fueleconomyforRVs, generators. Thistranslatesdirectly into less thantheCompany’s largediesel hybrid generatorweighsupto374pounds in audiblesoundlevels.Inaddition,the it represents abouta40percent reduction While thisnumbermightnotseemverybig, by 5decibels. has alsobeenabletocutnoisepollution by upto20percent. Power Generation able toreduce generatorfuel consumption Cummins PowerGenerationhasbeen a powerunitandcoachbattery, By usingacombinationofinverters, well asnoisepollution. by recreational ownersas vehicle(RV) technology toreduce fuel consumption example ofhowCumminsisusing A hybridgeneratorsetisagreat Hybrid generatorsforRVs related tobatterydisposal. result infewerenvironmental issues onsite batteriesneeded;fewer DC generatorsreduce thenumberof generators generallymore fuelefficient, power outageoccur. Notonlyare should batterybackupfailoraprolonged system andseamlesslyrestore power They continuouslymonitorthebattery 100 200 300 400 500 2200 3200 100 200 300 400 500

0 ...... NOx +HC + Hydrocarbons Nitrogen Oxides 2009 20102011 2012 in thousandsofmetrictons Non-road usefulliemissionstotal in thousandsofmetrictons Automotive (on-highw 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 ay) usefulliemissionstotal 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

ENT M IRON V EN three yearsearly. emissions regulations generators metfederal Cummins’ stationary regulations ayearormoreearly. high horsepowerdieselgeneratorsmetU.S.EPA entire rangeofCumminsPowerGeneration’s stationary in 2012whentheCompany’s ISX15engineandthe Cummins’ technicalleadershipwasclearlyondisplay stationary dieselgenerators Early tomarketforISX15and 40 President.Business andaCumminsVice President ofthePowerGeneration schedule,” saidTony Satterthwaite, requirements three yearsaheadof of meetingthemostexactingEPA 4Finalreadyare andfullycapable Tier 4interimcertifiedgeneratorsets Tier “I amdelightedtoannouncethatour effect until2015. for off-highway enginesthat don’t gointo 4Finalrequirementsunder thestricterTier current 4iemissionstandards andqualify received theEPA’s certificationforthe The stationarydieselgenerators,meanwhile, that takeeffect in2014. fuel efficiency rulesforon-highway engines certification fornewgreenhouse gasand U.S. Environmental Protection Agency(EPA) The ISX15wasthefirstengineto receive SUSTAINABILITY2012–2013 REPORT for Europe, theMiddle EastandAfrica. Director –Automotive EngineBusiness costs anddurability,” saidNeil Pattison, with thebestpossiblefuelefficiency, running us todevelopnear-zero emissionproducts and experiencefrom EPA 2010,enabling “The Euro 6 engines build on the technology with theU.S.EPA’s 2013standards. The Euro 6regulation iscloselyaligned all newvehiclesstartinginJanuary2014. emissions standard todate,applying standards. Euro 6isEurope’s moststringent natural gasenginesmeetingEuro 6emissions Company’s nextgenerationofdieseland In September2012,Cumminsunveiledthe outside theUnitedStates,too. Cummins’ products were earlytomarket water, fueland lubepumpsystems. optimized combustionandhigh-efficiency improvements tothebase engineinclude efficiency and reliability in2013.Efficiency market. Itwilldeliverhigherlevelsoffuel the NorthAmericanheavy-dutytruck The ISX15isthetop-sellingenginein 2500 kWdieselgeneratorset. industry-leading MissionCritical 2,750 kilowatts(kW),andincludethe The generatorsetsrangefrom 680to 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

ENT M IRON V EN Minneapolis area. it sendstolandfillsinthe reduce theamountofwaste Power Generationsignificantly Rise, Inc.helpingCummins are twooftheworkersfrom Matthew Kopacek(right) (left)and Joshua Williams opportunities forpeoplewhohaveemploymentbarriers. with Rise,Inc.Thelocalnot-for-profit helpscreatejob reduce productionwastethanksinparttoapartnership In Fridley, Minn., Cumminsismakingsignificantstridesto global wastefootprint Cummins innovatestoreduce 42 that nearly90percent ofthe wastethe of wastehandlingatCumminsshowed The mostcomprehensive study todate solid wastetheCompanyproduces. are reducing, reusing andrecycling the ways Cumminsfacilitiesaround theworld The initiativeisjustoneofmanyinnovative savings of$28,000. been goingtolandfills–anannualcost 34 percent ofthesolidwaste thathad Power Generationin2012eliminated years. Alongwithothersteps,Cummins which haveincreased significantly in recent tasks includingtheplant’s recycling efforts, The Riseemployeesworkonavarietyof SUSTAINABILITY2012–2013 REPORT and stampingoperations. scrap metalproduced through machining improvements toreduce theamountof teams, forexample,are workingondesign functions withinthebusiness. Engineering requires afocusedeffort from many Reducing Cummins’globalwastefootprint cardboard eachmadeupabout9percent. about 14percent andgeneralrefuse and in cratesandpallets,accountedfor was iron andsteel.Wood, usedprimarily 60 percent oftheCompany’s wasteprofile The 2011analysisshowedthatabout in allaspectsofouroperations,”hesaid. widespread commitmentto avoidwaste partnerships andmostimportantly, a and itwillrequire innovation,creative “However, there isstillmuchtobedone Environmental Managerfor Cummins. Smith,Corporate of time,”saidErnie waste footprintinarelatively shortperiod significant improvements in ourglobal employees are thereason we’vemade dedication andexpertiseofCummins “Partners suchasRisealongwiththe Cummins continuedatthatratein2012. 155,000 metrictons,wasrecycled in2011. Company generated,orjustover 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

ENT M IRON V EN of compressedairsystems. and optimizingtheefficiency of expensivecompressedair eliminating inappropriateuses leaders saveenergyisby One wayCummins’energy to acleaner, healthier, saferenvironment.” Company’s wedoleads missionthat“everything environmental stewardshipinkeepingwiththe Cummins iscommittedtopracticinggood Practices the Company’s practicestopromotegoodenvironmentalstewardship. practices andpartnerships.Thisreportnowtakesanin-depthlookat Cummins pursuesenvironmentalsustainabilitythroughitsproducts, Environmental Sustainability //Practices 44 » » » Corporate Environmental Policy: three mainareas articulatedinCummins’ management efforts are focusedonthe In Companyfacilities,environmental plan withspecificgoals(page65). committee todevelopacomprehensive footprint andhasestablishedanew to shrinktheCompany’s environmental Cummins isconstantlylookingforways » » » Resource conservation Pollution prevention Compliance SUSTAINABILITY2012–2013 REPORT and risksmostimportanttothem. and businessestoaddress opportunities with flexibilitytoallowindividualsites approach throughout theorganization, ensure asimilarlook,feeland fundamental model, deployingacommonframeworkto The Companyadoptedaninnovative global deploymentthatfollowed. since itsinceptionin2003andthe improvements inCummins facilities footprint reductions andother the primarydriverforenvironmental Management System(EMS)hasbeen Cummins EnterpriseEnvironmental

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

ENT M IRON V EN saving morethan$21millionannually. the Company’s energyreductionefforts, These seventhemesprovidestructurefor energyisakeyissueatCummins. Conserving How Cumminssaves energy 46 Cummins isfocusing itsefforts infourareas: 2015 energyandGHGintensity goals. plan designedtoachievetheCompany’s Cummins hasacomprehensive investment revenue) increased by about 1percent. GHG emissionsintensity(totalGHG/total increased byalmost2percent and energy intensity(totalenergy/totalrevenue) same timeperiod,theCompany’s global by justover3percent. Duringthe and greenhouse gasemissionsfell by 2percent compared to2011, consumption atCumminsdropped In 2012,globalabsoluteenergy 2015 goalaccounting. and therefore from theCompany’s accepted GHGinventoryaccounting, 2005 baselineinventory, consistentwith reduction, wasremoved from Cummins’ The business,anditsassociatedGHG Company hadsignificantlyeliminatedGHG. due tothesaleofabusinessinwhich SUSTAINABILITY2012–2013 REPORT » » » » centers andmanufacturing plants. energy recovery systemsattech from 2013to2015installtestcell Company hasallocated$19.3 million programs. To mitigatethisimpact,the launches highhorsepowerdevelopment This trend willaccelerateasCummins increased product developmenttesting. improvements were offset somewhatby Company’s energyuseandGHGfootprint Recover testenergy:In2012,the upgrade orreplace inefficient equipment. meters, expandcontrol systems,and in capitalover2013-2015toinstallsub Cummins hasallocated$20.7million difficult andexpensivetoimplement. Additional improvements will bemore by targetinghigh-returnopportunities. almost 34percent from 2005to2012 intensity oftheCompany’s facilitiesby Cummins hasreduced the energy Improve existingfacilities: productive useelsewhere Capture wasteheatfor Energy Recovery andtestcells burners Energy efficient boilers, Fuel Usage pumps andcompressed airsystems Substantial improvements inmotors, Machinery &Equipment and recirculation systems High efficiency heating,cooling Heating &Cooling and roof reduce heatgainorloss Efficient windows,doors,walls Building Envelope reduces operatingcosts High efficiency “smart”lighting Lighting for energysavings Systems andprocedures Power Management 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 -50% -30% -10% 50% 10% 30% 47

ENVIRONMENT

ENT M IRON V EN in metrictons U.S. process hazardous waste 104MT 100MT 97MT 2012 2011 2010 2009 2008 100 150 200 250 50 0 2008 2009 2010 2011 2012 2010 2009 2008 Metric tons 159 MT 198 MT

Intensity change normalized tolaborhours Hazardous waste Total hazardouswaste 48 in absoluteterms,whileexperiencinga disposal increased byabout 12percent Using 2008asabaseyear, Cummins and stampingoperations. the efficiency ofCummins’machining are exploringopportunitiestoimprove manufacturing andengineeringgroups Cummins generatedin2012.The Company’s encompassing 55percent ofthewaste Scrap metalisanotherarea offocus, promote reusable andrecyclable materials. suppliers toboth“rightsize”packagingand andexternal and workingwithinternal -60% -40% -20% 0% 20% 40% 60% SUSTAINABILITY2012–2013 REPORT in thousandsofmetrictons Recycled –non-metals 10 20 30 40 50 Wood Cardboard Plastic Paper 0 2008 2009 2010 2011 2012 2010 2009 2008 17.87 12.91 17.82 23.58 24.74 23.58 17.82 17.87 12.91 14.5316.36 11.49 8.64 10.99 0.93 0.80 1.10 1.35 1.26 1.35 1.10 0.93 0.80 0.70 0.58 0.39 0.43 waste by56percent from 2008levels. labor-normalized process derivedhazardous since 2008.In2012,Cumminsreduced by about48percent, onanabsolutebasis, waste generationintheUnitedStates Cummins hasreduced process hazardous prior years. numbers are includedin2012,butnot The DistributionBusinessUnitwaste an almost90percent recycling rate. reporting period.Cumminscontinued normalized tolaborhoursoverthesame 40 percent reduction indisposalintensity, in thousandsofmetrictons Recycled metals 100 120 20 40 60 80 Iron Aluminum brass Copper & 0 2008 2009 2010 2011 2012 2010 2009 2008 104.86 78.52 97.25 103.36 97.25 97.25103.36 78.52 104.86 .7 .5 .8 0.871.02 0.68 0.75 1.000.82 1.07 0.73 0.58 0.67 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 1.6 0.4 0.8 1.2 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 W ATER SUSTAINABILITY2012–2013 REPORT 49

ENVIRONMENT

ENT M IRON V EN in thousandsofmetrictonsCO Total GHGemissions DIRECT INDIRECT in thousandsofmetrictonsCO U.S. andNon-U.S.GHGemissions in thousandsofmetrictonsCO Total GHGemissions Non-U.S. Non-U.S. Fugitive SF6, CO Mobile sources Electricity, other combustion Stationary U.S. U.S. 2

100 200 300 400 500 600 700 0 2008 2009 2010 2011 2012 2010 2009 2008 2008 2009 2010 2011 2012 20092010 2008 107 101 121 129 131 101121 107 300 279 278293 312 115 111 114112 115 419 379 414 429 410 379414 419 182 177 171181 190 81 63 75 74 73 6375 81 30 28 29 30 2829 30 6 7 6 7 7 76 6 2 50 2 2 e e e SUSTAINABILITY2012–2013 REPORT

» » » water managementefforts by: that willfurtherdeveloptheCompany’s Cummins isengagedinseveralkeyprojects India. Manjarsumbha Village, China, andwatersupplydevelopmentin have promoted waterefficiency in Wuxi, scarcity challenges.Community efforts and Mexico,tworegions that facewater highest prioritysiteslocatedinbothIndia water source assessments atCummins’ conducted aglobalriskscreen, leadingto conservation focus.In2011,theCompany Cummins’ waterefforts go wellbeyonda engagement andsupplychain. conservation, businessrisk,community strategy consistingoffourkeycomponents: The Companyhasdevelopedawater and benchmarking. opportunities forbothimprovement to understanditsgreatest internal or testing),Cumminsisbetterable manufacturing, light type ofoperations(suchasoffice, heavy plant population,square footage,and Using keyoperatingmetricssuchas » » » needs, focused onwaterscarce areas. programs withspecificcommunity the Company’s watermanagement Developing processes foraligning management. process selectionandsupplier building construction,manufacturing processes includingsiteselection, considerations throughout business Embedding waterriskmanagement water riskmitigationopportunities. specific waterconservationand 31 selectfacilitiestobetterdefine Performing waterassessmentsat 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

ENT M IRON V EN has alsoobtained theproper permitsforthe equipment. broadening thesite’s environmental leadershipteam. Cummins avoid reoccurrence of the problem. Thosemeasures included the agencyofissueaswell asthemeasures takento Indiana DepartmentofEnvironmental Managementtoinform Upon discoveryofthediscrepancy, Cumminsnotifiedthe in theCompany’s airpermitrequest. expansion didnotprecisely conformtowhatwasdescribed The equipmentinstalledattheplantaspartofa$219million equipment attheCompany’s Seymour(Ind.) EnginePlant. non-conformance ofanewair-handling unitandother $11,250 finetothestateofIndianabecausetechnical Cummins announcedinOctober2012thatitpaidan Seymour permit potential environmental impact andhowtoavoidproblems. ensure personnelinkeyroles understandtheplant’s eliminated, Cumminshasincreased trainingatthesiteto with thewastewatertreatment systemhasbeeneffectively cleanup andrestoration costs. Whilethepathwayassociated The Companywillpayabouta$30,000fineinadditionto cement andcleanedupthespill. rainwater outfallsateachtransferstationonthesitewith closed avalvethatwasidentifiedasthesource, plugged a wastewatertreatment tank, plantofficials immediately Xi stream inMarch 2012.Upondiscoveringtherelease from 3,500 gallonsofuntreated wastewaterintotheFenghuang Chongqing, China,released anestimated3,000to The ChongqingCumminsEngineCo.Ltd.(CCEC)in Chongqing spill Here ismore onbothcases: that didnotconformprecisely tothepermitthenineffect. some airhandlingequipmentatitsplantinSeymour, Ind., had asignificantspillinChinaandinadvertentlyinstalled environmental record. Overthepastyear, theCompany Cummins triestobeastransparent aspossibleaboutits For therecord 52 SUSTAINABILITY2012–2013 REPORT environmental stewardship. employees embraceandcelebrate projects demonstratesthatCummins The growing numberandqualityofthe Company toduplicatethesebestpractices. provided anopportunityforothersinthe and participatedinanexhibitionthat projects totheCumminsBoard ofDirectors ofthe2012awards presentedWinners their and environmental stewardship. commitment toworldclassperformance employees andsitesthatexcelinthe Safety andEnvironment Awards torecognize In 2005,Cumminscreated theHealth, ENVIRONMENT A HEALTH, SAFETYAND to share bestpractices. provides amechanismfor HSE auditors program validatesperformance and as anauditleader. Thisstructured audit a seriesofauditsasteammemberand Lead Auditorsaftersuccessfullycompleting trained. Ofthose,69havebeencertifiedas than 140HSEandotherleadershavebeen auditor certificationprogram in2006,more Since thelaunchofCompany’s internal Every siteisauditedonanannualbasis. trainedauditors. audits usinginternally conducted byBVCconductingannual Cummins supplementstheauditsampling and thedataCumminscollects. certifies theCompany’s enterprisesystem auditor, Bureau Veritas Certification(BVC), a structured auditprocess. Athird party Environmental goalsare measured through AUDITOR CERTIFICATION PROGRAM W ARDS 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

ENT M IRON V EN at itsMiddleEastcenter. horsepower enginerebuilds engine. Cumminsdoeshigh of majorcomponentsan inspection andreplacing disassembly, cleaning, that includesthecomplete manufacturing process An enginerebuildisa practicing goodenvironmentalstewardship. Rebuild CenterinDubai,however, doesn’tstoptherein The DistributionBusinessUnit’s HighHorsepowerMaster “green” activity, potentiallytriplingthelifeofanengine. Rebuilding highhorsepowerenginesisaninherently stewardship around theworld Practicing environmental 54 said RachidOuenniche,ManagingDirector resource conservationinthefree zone,” make ournewrebuild center amodelof challenges ofDubai,andwewantedto to Cumminsandtheenvironmental “We knewgreen buildingswere important for enginewashing. are separatedandwateris re-circulated treatment plantwhere oil,fuelandwater the complexhasitsownwastewater many environmentally sensitive features, are connectedbyabridge. Amongits the RebuildCenternextdoor–two gold certificationin2012whenitfinished in Dubai2010andachievedLEED Cummins builtitsMiddleEastheadquarters SUSTAINABILITY2012–2013 REPORT implemented facility-wideimprovements emissions by47percent. Thedistributor by 44percent andgreenhouse gas(GHG) The distributorreduced its electricityuse environmental awards competitionin2012. energy efficiency project inCummins’annual Wetherill Parkdistributorwon thebest In Sydney, Australia, forexample,the working toshrinkitsenvironmental footprint. products andservicesallover theworld,is sells anddistributesCummins-branded how CumminsDistributionBusiness,which The newcomplexisjustoneexampleof in theMiddleEast. of CumminsDistributionBusiness 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

ENT M IRON V EN efficiency improvements. with specificenergy upgrades likeanewroof that combinesinfrastructure approach toenergyefficiency Plant hastakenastrategic The JamestownEngine including theplant’s approachtoenergyuse. last 40years.Allthatchangedin2012,however, in Western NewYork hadn’tseenmanyoverthe intensive, andtheJamestownEnginePlant(JEP) capital Major infrastructureupgradescanbevery millions forJamestown,N.Y., plant Strategic approach toenergy saves 56 $23.8 millionproject aspart ofthe Cummins isshowcasingthefour-year, for theentire facility. savings andoptimalsystemsperformance upgrades toachievesignificantenergy measures andnecessaryinfrastructure combines asuiteofenergyconservation to improving energyefficiency. Theproject as partofacorporate-widecommitment at thenearlyonemillionsquare footfacility A “deepenergyretrofit” project isunderway SUSTAINABILITY2012–2013 REPORT about $604,000inannualsavings. 61 billionBTUs,whichtranslatesinto measures intheproject willbemore than savings from justtheenergy efficiency- The Companyanticipatestheenergy building owners. assistance tocommercial and industrial Challenge. TheChallengeprovides technical of Energy’s BetterBuildings,Plants Company’s participationintheDepartment 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

ENT M IRON V EN marketplace. Here’s alookatjustfewexamples: has helpedbringenvironmentalsolutionstothe efficiently andmuchmore.Cummins’policyadvocacy meet itsproductemissionsgoals,useenergymore Cummins’ partnershipshavehelpedtheCompany Partnerships andpolicy how the Companypartnerswithothergroupstoprotectenvironment. how practices andpartnerships.Nowthisreporttakesanin-depthlookat Cummins pursuesenvironmentalsustainabilitythroughitsproducts, Environmental Sustainability //P 58 white paper, supportedtherule in theindustry, wrote aregulatory framework a stakeholdergroup withothercompanies more thanfouryears.TheCompanyformed very activeinthedevelopmentofrulefor vehicles intheUnitedStates.Cumminswas standards forheavy-dutyandmedium-duty greenhouse gas(GHG)andfuelefficiency during thedevelopmentoffirst-ever These principleswere putintoaction » » » » impact ontheenvironment. Theyare: public policytoreduce Cummins’ regulatory entitiestodevelop sound partnerships withlegislativeand sustainability principlesfocuson Four oftheCompany’s 10environmental GLOBAL ENERGYPOLICY » » » » Support abalancedglobalapproach. accelerate progress. Advocate forincentivesto Promote technologydevelopment. Help developresponsible regulations. SUSTAINABILITY2012–2013 REPORT artnerships by thefirstrule. benefits from technologiesnotconsidered while recognizing GHGandfuelefficiency the solidfoundationofPhase 1rule and vehicleregulations buildingupon framework ofcomplementaryengine of stakeholderstodevelopacomprehensive The Companyiscollaboratingwithavariety role inhelpingtodeveloptheregulation. Cummins isonceagaintakinganactive has already begunonthePhase2rule. new standards, knownasPhase1,work in theearlystagesofimplementing Even asregulators andindustry are standards, oneyearearlier thanrequired. EPA certificationforthenewGHGengine was thefirstmanufacturer to receive U.S. In October2012,Cumminsannouncedit engines andvehiclesstartingin2014. with newstandards thattake effect for The rulewasfinalizedinAugust2011, the commentperiod. provided extensivefeedback during publicly whenitwasproposed and

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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N s engines andemissioncontrol technologies. systems basedonadvancedcombustion for commercialization ofvehiclesandpower analytical approaches, speedingupthetime and breakthrough technologiesand and othershaveledtobothevolutionary Previous Cumminsprograms withtheDOE advances inproduct energyefficiency. federal andstateagenciestodevelop Department ofEnergy(DOE)andother longstanding partnershipswiththeU.S. Cummins continuestobuilduponits COLLABORATION RESEARCH ANDDEVELOPMENT with lowerGHGemissions. technologies formore efficient products responsible regulations thatpromote Company’s globalactivitiesindeveloping This willhelpbettercoordinate the

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ENVIRONMENT

ENT ENT M M IRON IRON V V EN EN 60 » » » » noted, include: projects involvingDOE,exceptwhere The Company’s current public-private » » » » for powergeneration. natural gasreciprocating engines efficiency andlowemissionsfrom in onitsfinalphaseofmaximumengine Theprogramthe government. isclosing research laboratories,universitiesand of thatinvolvesenginemanufacturers, research program Cummins ispart Engine Systems)isamultifaceted ARES (AdvancedReciprocating combined efficiency. achieving more than80percent and lightindustrialapplications, Heat andPowersystemforcommercial packaged naturalgasbasedCombined Engine Businessprogram, isdeliveringa CHP, ajointCumminsPowerGeneration/ possibly replace. V8 enginethatthedieselcould economy improvement over agasoline that achievesatleasta40percent fuel goal istodevelopanewlight-dutydiesel Automotive Systems)project, whose The ATLAS (AdvancedTechnology Light transportation industry. efficiency, animportantmetricinthe a more than60percent gaininfreight in 2012,theconcepttruckrecorded advanced aerodynamics. Duringtesting 8 truckdesignimprovements, including efficiency improvements withClass in integratingbreakthrough engine which demonstratesthepower The SuperTruck initiative(page26), SUSTAINABILITY2012–2013 REPORT emission reduction systems. stringent emissionstandards orinstall diesel-powered enginestomeetmore andothersinpurchasinggovernments provides grantsorloanstoassistlocal Emissions ReductionAct(DERA),which secure continuedfundingfortheDiesel is leadingacoalitionwhoseaimto In theUnitedStates,Company and remanufactured goodsglobally. remove barrierstoremanufacturing Cummins isalsoactiveinefforts to systems andnaturalgasengines. generators, combinedheatandpower environment. Theseinclude fuelefficient products andtechnologies thatbenefitthe staff continuestoadvocate globallyfor The Company’s Relations Government GOVERNMENT RELATIONS fundamentals, biofuelsandmore. materials scienceandexhaustcatalysis combustion modelinganddiagnostics, They jointlyworkonsuchthingsas counterparts atCummins. of nationallaboratorieswiththeir class researchers attheDOE’s system agreements thatteamand fundworld collaborative research anddevelopment programs isavaluableportfolioof Underlying Cummins’system-integration » » diesel-powered baselinevehicle. GHG emissionsreduction compared toa ethanol. Theproject targetisa50percent duty engine/powertrainoptimizedforE85 development ofadownsizedmedium- Energy Commission,supportsCummins program, apartnershipwiththeCalifornia The Ultra-LowCarbonPowertrain 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

ENT M IRON V EN 62 Directors alsoadvisesseniorleaders Committee oftheCumminsBoard of The Safety, Environment andTechnology advisors dependingonthetopic. engineers are invitedtoparticipateas scientistsand Other seniorinternational » » The permanentcouncilmembersare: at aparticulartime. topics beingaddressed by theCouncil and aligntheirexpertisewiththespecific broader group specialists ofinternational in 2010tomakeiteasieraccessa TheCouncilwasrestructuredgovernment. from theworldsofacademia,industryand leading scientificexpertsandpolicymakers Company accesstosomeofthecountry’s The Council,formedin1993,hasgiventhe footprint andmeetcustomerdemands. reduce theCompany’s environmental products tocomplywithvariousstandards, Technology AdvisoryCouncilindeveloping Cummins seeksadvicefrom itsScienceand ADVISORY COUNCIL SCIENCE ANDTECHNOLOGY » » California InstituteofTechnology.California of DefenseandformerPresident ofthe Dr. Harold Brown, formerU.S.Secretary Massachusetts InstituteofTechnology. former DeanofEngineeringatthe Chairman Dr. GeraldWilson, SUSTAINABILITY2012–2013 REPORT during thefirststagesofenginedesign. to makeenergy-consciousdecisions Assessment toolsfordesignerstouse methodology, completewithLifeCycle be usedtocreate adesign-for-low-energy use. Thestepstakeninthisprocess will much designdecisionscanaffect energy camshaft designstounderstandjusthow the energyusedtomanufacture different Specifically, the universityislookingat and manufacture enginecomponents. how Cumminsusesenergytomake Manufacturing Group isinvestigating of Technology’s Environmentally Benign For example,theMassachusettsInstitute Company withresearch anddevelopment. universities around theworld toassistthe Cummins partnerswithhundreds of ACADEMIC PARTNERSHIPS » » » of Cumminsregarding: and thetechnicalleadership » » » programs andpolicies. Progress ofstrategicenvironmental the Companyoritsproducts. matters thatsignificantlyimpact environmental andtechnological with respect tosafety, aswell and positionstakenbytheCompany Public policydevelopments,strategies to theCompanyanditsproducts. and majorprojects astheyrelate strategies, complianceprograms Environmental andtechnological 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 INNOV AMERICAN ENERGY ATION COUNCIL 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

ENT M IRON V EN save 1,500tonsperyear. dioxide (CO represents onetonofcarbon globe inthebackground Westport. Thelargeinflatable gas enginesfromCummins trucks tocompressednatural will convertmostofitsfleet Terry announceshiscompany Monarch BeverageCEOPhil compressed naturalgas. truck fleettoCummins Westport enginesfueledby in 2012itwillconvert85percentofitsheavy-duty Indiana’s largestbeerandwinedistributorannounced with naturalgasengines Fleet reduces globalwarming 2 ). Themovewill 64 toward truckfleetsfueledbycompressed edge ofthemovementinUnited States The decisionputsMonarch ontheleading Phil Terry, CEOatMonarch Beverage. gas powered vehiclesinIndiana,”said the presence ofcompressed natural innovative companiestostrengthen we are excitedtopartnerwithsuch “As afamily-ownedHoosiercompany, natural gasfuelingstation. will includeanon-sitecompressed other companiesontheproject, which partnering withCumminsandseveral The Monarch BeverageCompany is SUSTAINABILITY2012–2013 REPORT carbon dioxide(CO side ofthestagerepresenting onetonof A two-storyinflatableglobestoodtothe center ontheeastsideofIndianapolis. made atMonarch’s gleamingdistribution The December, 2012announcementwas Arthurs, President, CumminsWestport Inc. healthier andsaferenvironment,” saidJim and ourcommitmenttocreating acleaner, by 800,000gallonsannuallyandits reducing itsconsumptionof dieselfuel have 100trucksfueledbynaturalgas, Ohio, IllinoisandKentucky, expectsto Monarch, whichservesparts ofIndiana, can berefueled. at theendofworkdaywhere they companies whosetrucksreturnhome especially attractivetolocalandregional natural gas.Thegasoptionis into theatmosphere by1,500tonsperyear. gas engineswillreduce theCO Monarch estimatesthetransitiontonatural to globalwarming. commitment tothecommunitiesweserve “This partnershipdemonstratesour fuel expensebymore than 60percent. 2 ), akeycontributor 2 emitted 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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CORPORATE RESPONSIBILITY RESPONSIBILITY CORPORATE CORPORATE 75,000 children. education efforttoreach launched anenvironmental Cummins Indiaemployees inIndia, 50th anniversary To celebratetheCompany’s andimprovethecommunities inwhichwelive.” “serve living theCompany’s CorporateResponsibilityValue to in buildingstrongercommunitiesaroundtheworld2012, Cummins employeesinvestedarecordnumberofhours in record numbers Building stronger communities Corporate responsibility a 70percent increase overtheyearbefore. stronger communitiesin2011. That’s about over the130,000hoursloggedbuilding 2012, anincrease ofabout 90,000hours on communityinvolvementactivitiesin Employees workedmore than 221,000hours in 2011. the 16,472employeeswhoparticipated in 2012,a68percent increase over worked oncommunityserviceprojects More than27,000Cummins employees 66 SUSTAINABILITY2012–2013 REPORT » on. Here are justafew: the communityprojects theyworked but alsointhebreadth anddepthof invested byCumminsemployees, 2012, notjustintermsofthehours But seldomhasthere beenayearlike Cummins’ visionaryCEOJ.IrwinMiller, Company’s products, datingbackto helps buildstronger markets forthe believed buildingstronger communities For more than50years,Cummins has such ameaningfulwayaround theworld.” see ouremployeeslivingthiscore valuein Engagement. “It’s extremely gratifyingto Gwen Langley, Director –GlobalCommunity to strengthening ourcommunities,” said “Cummins haslongbeencommitted organize the1963March onWashington. who helpedDr. MartinLutherKing,Jr., » 75,000 school children. education campaigndesigned toreach country bylaunchinganenvironmental Cummins’ 50thanniversaryin the In India,employeescelebrated 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 Innov Points of Corporate Responsibility » » » » » » (page 66). participation record Employees setEEEC begins (page70). education initiative New globalvocational record (page 71). Challenge tops GHG ation

CORPORATE RESPONSIBILITY CORPORATE RESPONSIBILITY CORPORATE The CumminsFoundation.HejoinedtheCompanyin1973. Responsibility andCommunityRelationsCEOof Horsepower. Levett’s President newtitleisVice –Corporate Presidentas Cummins’GeneralManagerandVice –High She wasreplaced byMark Levett,whosince1999served department’s tieswithallofCummins’businessunits. Blackwell’s leadership,andshestrengthened the became more closelyaligned tothebusinessunder The Company’s communityinvolvementefforts also significantly duringthoseyears,especiallyglobally. since 2008andthesizescopeofprogram grew Blackwell ledCummins’CorporateResponsibilityefforts and ChiefExecutiveOfficer ofTheCumminsFoundation. PresidentExecutive Vice ofCorporateResponsibility announced herretirement in2013astheCompany’s served inseveralroles includingChiefFinancialOfficer, Jean Blackwell,whostartedatCumminsin1997and Transitions is theschool’s home.Blackwell retiredfromCumminsin2013. that migrant children.Duringa2010visit,Blackwelltouredtheformerfactory Hong attheDandelionSchooloutsideBeijing,China.Theschoolfocuseson and ChiefExecutiveOfficerofTheCumminsFoundation,talkstoPrincipalZheng Jean Blackwell,thenCummins’ExecutiveVicePresidentofCorporateResponsibility 68 SUSTAINABILITY2012–2013 REPORT next 12to18months. plans are inplacetoaddothersthe and partsoftheAsiaPacific region and matching giftprograms inIndia,China In 2011and2012,Cumminslaunched outside thecountry. has startedmatchinggiftprograms involves theUnitedStates,Cummins While theUnitedWay program mostly Company’s EEECprogram. activities theyworkedonthrough the were abletodirect theirdonationsto programs, soinmanycases employees designate theirfundstospecificqualifying The UnitedWay allowscontributorsto More than9,000employees participated. received atotalof$5.32million in2012. where Cumminsemployees liveandwork service organizationsinthecommunities pledges dollarfordollar, sosocial The CumminsFoundationmatches set withemployeesgiving$2.51million. over 2011whentheprevious record was $2.66 millionin2012,a6percent increase Cummins employeespledgedarecord participation intheUnitedWay. was alsoarecord yearforCummins’ Despite thesluggisheconomy, 2012 UNITED W community partneroftheirchoice. Cummins Foundationforthecharitable each received a$10,000grantfrom The 19 countries(page71).The15winners 100 entriesfrom Cumminsemployeesin success in2012,drawingmore than The Challengewasonceagainahuge AY 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 CORPORATE RESPONSIBILITY CORPORATE education inthecountry. sponsors vocational in 2013.Theorganization Casablanca, Morocco, education programin to openavocational et delaPromotionduTravail) la FormationProfessionnelle with theOFPPT(Officede Cummins ispartnering education programsponsoredinpartbyCummins. that journeycouldbegininSeptember2013atavocational for centurieslookingtomakeanewstart.For112students, People havetraveledtotheMoroccancityofCasablanca deficit around theworld TEC program addresses skills Update: 70 which are inhighdemand in NorthAfrica. skills suchasbusandtruckmaintenance, education, teachingindustry-relevant access togoodjobsthrough vocational TEC isaCumminsinitiativetoincrease Education forCommunities. first schoolpartnersinTEC: Technical Travail) Center forTransport isoneofthe Professionnelle etdelaPromotion du The OFPPT’s (Office delaFormation SUSTAINABILITY2012–2013 REPORT to communitytechnical education. prior torecommending aglobalapproach approaches andidentifyingbestpractices global locations,testingavariety of China andIndiaaswellother new In 2013,TECwillcontinueinMorocco, critical toTEC’s success. and communityorganizationsisalso partnerships withbusiness,government withclassroomForging learning learning. market needs,combiningworkplace and acurriculumthatmeetslabor teachers andtrainers,career guidance All TECprograms includeeffective which theylive.InadditiontotheCenterfor for manypeopleandthecommunitiesin employable skillsisakeybarriertosuccess when Cumminsrecognized thatalackof The TECprogram started in 2012 Strategic Programs. Chandler, Cummins’ Director ofGlobal we cansharesaidMary whatwelearn,” approaches totechnicaleducation so “One ofthegoalsTECistotestdifferent programs operatinginChina andIndia. Transport inMorocco, there are nowTEC WINNER WINNER A A W W ARD ARD 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 CORPORATE RESPONSIBILITY CORPORATE improve theflowoftraffic. employees workingto more than200Cummins Road. Heledateamof video oftrafficonKarve Singh, center, captures Cummins India’s Navdeep 72 the stretch of KarveRoadandbegan They designedamethodology toevaluate emissions andfuelcouldbesaved, too. an opportunitytoreduce congestion,GHG the signalswere coordinated, there was management. Team membersbelieved if the onlyarea itcouldaffect wastraffic signal The teamdeterminedthatintheshortterm, » » » » Karve Road: main causestotraffic congestion along The teamconcludedthatthere are four traffic thatexiststoday. were neverdesignedforthe volumeof key thoroughfares are centuriesoldand educated workforce. However, some in thearea totapintoPune’s highly corporations haveestablishedoperations the metropolitan area. Manymulti-national India withapopulationofabout5millionin Pune isoneofthefastestgrowing citiesin Municipal Corporation. the PuneTraffic PoliceandthePune sustainable growth inPune,aswell devoted tocommunityimprovement and » » » » The lackofcoordinated traffic signals Too manyvehicles A lackofdriverdiscipline at different speeds Bunching ofvehiclestraveling SUSTAINABILITY2012–2013 REPORT around India. be easilyreplicated notjustinPunebut of theproject believetheworktheydidcan capital investmentofaround $300.Leaders That’s apretty goodreturnontheteam’s in otherpartsofthecity. same tooltoaddress traffic congestion and are nowintheprocess ofusingthe travel KarveRoad.PuneTraffic Policeagree accidents andlessstress amongthosewho The teamalsobelievesthere willbefewer year basedontoday’s fuelprices. nearly $150,000infuelwillbesavedeach GHG emissions will be avoided annually and estimates more than200,000 kilogramsof targeted stretch ofKarveRoad. Theteam Traffic nowflowsmore smoothlythrough the evening andweekends. the analysisforconditionsinmorning, The signalswere adjusted according to the bestsettingsfortraffic signals. readings thatwere evaluatedtodetermine videos andderivedmore than 3,000timing Seventy engineersthenanalyzedthe on theinitiative. Employee EveryCommunity(EEEC)hours three weeks,investingmore than600Every and fortyemployeestook68videosin on selecteddaysoftheweek.Onehundred mid-dayandduringtheevening morning, collecting dataviavideostakeninthe WINNER A W ARD 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 CORPORATE RESPONSIBILITY CORPORATE Participating countries in2012 19 was firstheldin2009 the Environmental Challenge gas emissionsreduced since Estimated tonsofgreenhouse 9,147 2012 Environmental Challenge gas emissionsreduced inthe Estimated tonsofgreenhouse 4,300 was heldin2009 first Environmental Challenge Total employeehourssincethe 200,000 Environmental Challenge Employee hoursinthe2012 80,000 numbers from thecompetition. Here’s alookatfewkey Company’s 90thanniversary. in 2009tocelebratethe Challenge wasfirstheld Cummins’ Environmental by theNumbers Challenge Environmental 19 9,147 4,300 200,000 80,000 74 environmental teachersandtheAbilities Employees alsoworkedwiththe school’s organic material. plastic, paperandcardboard and various colorstoseparateglassandtin, delivery andsetupofrecycling binsin Cummins employeesassistedwiththe implemented arecycling program atIthute. To improve wastemanagement,employees was recognized withatrophy. classes tohelp,andthewinningclass the KelvinCITwere assigned todifferent or paintedpictures ofowls. Membersof competition washeldwhere studentsdrew As partofthiseducationeffort, anart to dismissanyone’s culturalbeliefs. in thefoodchainwhilebeingcareful not eco-centric viewofowlsandtheirniche Africa employeesgaveIthutestudentsan The OwlFoundationandCumminsSouth Project Co-Leader. reduce rodents,” saidAllyDhlamini, nature ofowlsandtheirpurpose to introduce thechildren totheharmless “Many regard owlsasevil,sowehadto involved intheprogram. set aboutaddressing thecultural issues owls ontopoftheschool.Then,they Foundation tobuildanestingboxfor Cummins partnered withtheOwl poisons thatmightharmpeople. can reduce thatpopulationwithoutusing just over1,000ratspermonth.Andthey Eight adultsinonefamilycanconsume Adult owlscaneatfourtosixratsperday. and otherpartsofSouthAfrica. including Malaysia,Israel,theUnitedStates SUSTAINABILITY2012–2013 REPORT WINNER A amazing becauseweunderstand thatthis engagement ofouremployees wasjust planning anactivitytoplanttrees, the “When wecommunicatedthat wewere and temperatures are downinsomeareas. the airiscleaner, dusthasbeenreduced has theirworkhelpedbeautifythecity, some 5,000trees inthearea. Notonly 800 Cumminsemployeeshaveplanted But overthepastthree years,nearly Green spaceislimited. area isfrequently bumper-to-bumper. Paulo’s airport.Traffic international inthe is nearseveralmajorhighwaysandSão The CumminscampusinGuarulhos,Brazil, Guarulhos, Brazil CREATING AN URBANOASIS cause foroptimism. say afteryearsofstruggle,there’s finally both employeesandAlexandraresidents to eradicatethetrashandratproblems, Though there ismuchwork ahead CIT forpossiblecollaborations. community thatwillbesubmittedtothe put togetheranenvironmental planforthe were establishedforeverygrade.Theywill the community. Ecoclubsrunbystudents educate andsupportgreen initiativesin The clubsare intendedtocreate, eco kidsclubsattheschool. had workedwithbefore, toestablish management companythattheCIT a professional environmental Projects ManagementCorporation, W ARD BEST continuation 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 CORPORATE RESPONSIBILITY CORPORATE energy andwaterconservation. included improvementsin center). Theprojectalso Home forBlindGirls(left, at ThePoonaSchooland safer environmentforstudents create gardenstomakea remove underbrushand Cummins employees 76 2012 EnvironmentalChallengewinningprojects and improve studentlivingconditions. Employees reduced DandelionSchool’s energyconsumptiontoreduce operationalexpenses Dandelion EcoSchoolBeijing,China of waterfordrinkingandirrigationinanIndianvillage. Cummins employeesestablishedapermanentsolutiontoensure thesustainedavailability Manjarsumbha VillageWater ManagementProjectAhmednagar, India farmers onsustainablepractices. Employees reduced theadverseenvironmental impactofsugarcanecultivationbyeducating Innov biodiversity, waterandsoilconservationforest fire prevention. Cummins employeesoffset carbonbydevelopingandsustaininganecosystemtopromote Ecosystem at BarrenHillsPune,India for BlindGirlsthrough improvements inenergyandwaterconservation. Cummins employeescreated asaferenvironment forstudentsatThePoonaSchoolandHome Balanced Ecosystemat thePoonaSchoolandhomeforBlindGirls Pune,India vehicular emissionsandtraffic congestion. Cummins employeesdesignedandimplementedatraffic signalmanagementsystemto reduce Emissions ReductionthroughTrafficSignalManagementPune,India awareness among75,000studentsontheimportanceofpreserving theenvironment. To commemorateCummins’ 50yearsinIndia,thisenvironmental educationcampaignraised “Catch ThemYoung”Environental Education Campaign Pune,India SUSTAINABILITY2012–2013 REPORT ative Approach forPopularAgricultural Segment Phaltan,India 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. Water This project harvestedrainwaterthrough waterpansinthearidSamburuarea, benefiting12,000people. Samburu Water P 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, Ser Employees created an“ecologicalaisle”toconnecttwomajor urbanparks. Green IslandandEco-Aisle ProjectGuarulhos,Brazil w ay Restoration ProjectNashville,Tenn. 2 absorption. an ProjectNairobi,Kenya ving CommunityChengdu,China 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 CORPORATE RESPONSIBILITY CORPORATE home totheDandelionSchool. thatis at theformerfactory help improvetheinfrastructure incubator grantsprogramto Cummins employeesusedthe families movingtoBeijingfindwork. created specificallyforchildrenfromlow-incomemigrant the DandelionSchoolisonlymiddleschoolincity inthesuburbsofBeijing, Housed inanabandonedfactory the DandelionSchool Hope blossomsat 78 challenges,” saidCESproject leader change theirlives,buttheyfacesomany “Dandelion ishelpingneedychildren and todaythefuture ismuch brighter. some oftheschool’s structuralproblems incubator grantsprogram, theytackled Using anewCorporateResponsibility Solutions (CES)inBeijingbecameinvolved. Then, employeesatCumminsEmission challenge tokeepgoing. this beaconofhopehasbeenareal systems, andoutdatedelectricalwiring, But withcrumblingplumbingandheating SUSTAINABILITY2012–2013 REPORT covered yearlyexpenses. possible. Itsoperatingbudgethasbarely and boarding tohelpasmany familiesas 2005, chargingonlyanominalfeefortuition The DandelionSchoolwasestablishedin because ofhighereducationcostsinthecity. Often, theirchildren’s schoolingsuffers farmingpractices. obsolete bymodern In manycases,theyare small farmersmade familiar insearch ofworkin thenearest city. China are oftenforced toleaveallthatis Families from impoverished regions inrural to help,inwhateverwaywecan.” Hans Han.“Cumminshasaresponsibility 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 CORPORATE RESPONSIBILITY CORPORATE high schoolgraduationrates. Education Coalitiontoimprove sponsored bytheCommunity part oftheiGradprogram School inColumbus,Ind.as tutors astudentatEastHigh Cummins employeeJimBurke with sustainablegoals. projects, particularlythosethataimtohaveahighimpact a crucialfactorinthesuccessofcommunityimprovement Cummins stronglybelievesthatleadershipengagementis Coalition forprogress 80 history ofcollaboratingwiththeCEC,both The Companyanditsleadershavealong in partwithCummins’help. nonprofit organizationfounded in1997, and ahighqualityoflife.TheCECis systemswitheconomicgrowthlearning and integratingtheregion’s community community leadersfocusedonaligning partnership ofeducation,businessand in Columbus,Ind.,isanationallyrecognized The CommunityEducationCoalition(CEC) across thecountry. a modelforthree otherCummins cities headquarters communityhasbecome One successstoryintheCompany’s SUSTAINABILITY2012–2013 REPORT students atrisk ofdropping outwith in BartholomewCounty. Theprogram pairs to improving highschoolgraduationrates a collaborativeapproach inthecommunity One suchundertakingistheiGrad program, area Indiana. inSouthern education opportunitiesintheColumbus pre-school educationtoupgradinghigher of educationinitiatives,from improving The coalitionhastackledawidevariety and current Board memberoftheCEC. Responsibility andCommunityRelations PresidentMark Levett,Vice ofCorporate educational systemsintheregion,” said important workaswestrivetobolsterour “Cummins ispleasedtobeapartnerinthis during his25-yearcareer at Cummins. role infurtheringthegoals of theCEC serves ontheboard andplayed anintegral President ofCommunityRelations, also Mark Gerstle,therecently retired Vice serves onthecoalition’s Board ofDirectors. of theDistributionBusinessUnit,currently PresidentVice PamelaCarter, President from afundingandanadvisorycapacity. corporate responsibility efforts.” since theirengagementiscriticaltoour Cummins leadersare taking inthisinitiative, “I’m particularlyproud ofthe activeroles

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 graduationrate 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 CORPORATE RESPONSIBILITY CORPORATE Engineers Indiacompetition. Baja SocietyofAutomotive impressive 13thinthe Team Blitzfinishesan skills: off-roadenduranceracing. Women (CCEW)inIndiahave foundanewwaytotesttheir Some studentsattheCumminsCollegeofEngineeringfor Students takeapathlesstraveled Update: 82 so Ibeganresearching thatthe andlearned Sawant. “Ihadnopriorknowledgeaboutit, Pithampur,” said Team CaptainMrunal ‘Overdrive’ abouttheBaja eventheldin across anepisodeofthetelevision program “During myfirstyearatCCEW, Icame Engineers (SAE)Indiacompetition. compete intheBajaSocietyofAutomotive in 2013becamethefirstCCEWteamto designed andbuiltanoff-road vehicleand number ofwomeninengineering.Theteam supported byCumminstohelpincrease the the collegeinPunethathaslongbeen Team Blitzismadeupofstudentsat SUSTAINABILITY2012–2013 REPORT limit of60kilometersperhour. easily maintainedandhaveaspeed vehicles besafe,easilytransported, and meetthecontestrequirements that built acartowithstandharshconditions Over aboutthree months, they painstakingly then entered the2013competition. studying andpreparing for theeventand now consistsof25women,spentayear team soonfollowed.Team Blitz,which create theSAEchapterand theoff-road Sawant workedwithaclassmateto create anSAEchapteratthe college.” first requirement toparticipatewas 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 CORPORATE RESPONSIBILITY CORPORATE Prakti’s stoves. Point, studiesoneof a memberofteamBoiling Cost AnalystDavidEmmons, Cummins EmissionSolutions build acleanerstove. the world.Then,shebecamepartofaCEScompetitionto daily foodpreparationinextremelyremotelocationsaround cook stovesthatburnwoodorotherfuelswereonlyusedin for CumminsEmissionSolutions(CES),hadalwaysthought Cassie Marion,aCustomerSupportExcellenceCoordinator designing abettercookstove CES putsskillstowork 84 stoves isresponsible forthedeathsof by inefficient andpoorlyventilatedcook Indoor airpollutiongeneratedmostly stove makersintheworld. based PraktiDesign,oneofthe leading production, inpartnershipwithIndia- One designwillbeselectedtogointo Technology stovetestingcenter. Beijing (China)UniversityofChemical finalists’ designsandthentestedbythe Prototypes willbebuiltusingeachofthe Manager SrikanthPadmanabhan. Presidentby CESVice andGeneral of fivecompetitionfinalistsinApril2013 tested aftertheirteamwasnamedone get toseetheirstovedesignbuiltand Marion andtherest Fourwill ofNuv Vida of millionspeoplewasveryenticing.” of aproject thatcanimprove thelives competition. “Sotheideaofbeingpart teams thatsubmitteddesignsinthe Four,of teamNuvVida oneof27employee based inColumbus,Ind.,andisamember throughout theworld,”said Marion,whois “In reality theyare usedintownsandcities SUSTAINABILITY2012–2013 REPORT contribute todeathanddisease. ranks fourthamongtheriskfactorsthat with highmortalityrates,indoorairpollution organization says.Indevelopingcountries among children fiveoryounger, thehealth More thanhalfofthesedeaths occur World HealthOrganization (WHO). the globeannually, according tothe about 1.6millionpeoplearound 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 CORPORATE RESPONSIBILITY CORPORATE think fromhistimeasaCumminsexecutive. group SavetheChildrenwasn’tasdifferentyoumight Rick Stonersayshisworkattheinternationalcharitable Born toserve 86 Cummins where heworkedinavarietyof duringhismorelearned than20 yearsat Stoner sayshefrequently drew onwhathe toward acommongoal.” Officer. “It’s allaboutworkingeffectively ProgramsInternational andChiefOperating organization’s President SeniorVice – child welfare group, mostrecently asthe in October2012after13yearswiththe the Children,” saidStoner, whoretired are likethedifferent divisionsatSave “In somewaysCummins’businessunits and strengthening globalcollaboration. systems, strategicandsuccessionplanning In bothplaces,heworkedonimproving SUSTAINABILITY2012–2013 REPORT among them:hemethiswifeElizabeth an eventfulexperienceformany reasons, the PeaceCorps,workinginAfrica.Itwas After graduatingfrom Yale, Stonerjoined community lifeinspired me.” and hisdrivetoimprove allaspectsof 2008. “Hisvalues,hissenseoffairness me,” saidStoner, whosefatherdiedin “My dadhadatremendous influenceon those beliefstotheirownchildren. Indiana’s borders. Theyhandeddown a worldviewthatextendedfarbeyond the life-changingpowerofeducationand Rick’s fatherandMillershared abeliefin CEO J.IrwinMiller. close associateofvisionaryCummins Board ofDirectors for20yearsanda ChairmanoftheCummins who wasVice Stoner isthesonofRichard B.Stoner, to serveonavolunteerbasis. Save theChildren, where hecontinues preparing hiswholelifefor hisworkwith But inmanyways,Stonerhadbeen Cummins Turbo Technologies. Engineering, whichlaterbecame and ManagingDirector ofHolset of CumminsPowerGenerationGroup Presidentpositions includingasVice 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 to joinSave 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 mudhutsthat 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 CORPORATE RESPONSIBILITY CORPORATE Habitat forHumanity. as partofafundraiserfor a playtruckemployeesbuilt surface thatisnowhometo included asaferrubberized Center. Theimprovements the ConcordNeighborhood of itscommunitypartners– improve aplaygroundforone Indianapolis usedagrantto Cummins employeesin role inhundredsofinitiativessinceitsinception1954. foundations intheUnitedStates.Ithasplayedacritical The CumminsFoundationisoneoftheoldestcorporate and skillsthrough philanthropy Supporting employeepassions 88 located andinsupportoftheCompany’s communities where Cumminsfacilitiesare The Foundationfocusesprimarilyon and empowerswomeninKenya. to aprogram thatestablishes businesses Stamford MillStream inStamford, U.K., in Cookeville,Tenn.; torestoration ofthe technology, engineering andmatheducation activities, from labequipment forscience, Those grantscovered awide rangeof out nearly$8millioningrants2012. gave Foundation. TheFoundation,inturn, including $14.1milliontoTheCummins in itscorporateresponsibility efforts in2012, Cummins investedmore than $30.7million build stronger communities. efforts tousetheirskillsand passionsto to useitsphilanthropy tosupport employee Responsibility program. Cummins wants component oftheCompany’s Corporate But givingdollarsisnotacentral SUSTAINABILITY2012–2013 REPORT is includedonthefollowingpages. contributions andprojects during2012 A listofCummins’largerphilanthropic Cummins –justover$1.39millionin2012. made byindividualbusinessunitswithin Finally, some philanthropic spendingis and localinfrastructure projects. higher education,energy, theenvironment Foundation, establishedin1990,supports foundation inIndia.TheCumminsIndia $637,990 from aCummins-supported In addition,there were grantstotaling for theremaining 35percent. and environmental spending accounted educational initiatives.Socialjustice Foundation’s spendingwenttoward In 2012,about65percent ofthe equality ofopportunity. the environment andsocial justice/ three globalpriorities:education, 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.W 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 ilder Foundation 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. Phaltan, India SUSTAINABILITY2012–2013 REPORT 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 CORPORATE RESPONSIBILITY CORPORATE Indiana UniversityLeeHamiltonFellowshipAward Dave GalleScholarshipFund Heritage FundofBartholomewCounty Environmental Challengegrantrecipient Bartholomew ConsolidatedSchoolCorporation Helping childrensucceedthroughentrepreneurship Young Enterprise Part-time instructorforEngineeringDrawingDepartment Columbus AreaCareerConnection- Bartholomew ConsolidatedSchoolCorporation Hands onNashvilleRepairflooddamagedwaterways Book BuddiesProgram Bartholomew ConsolidatedSchoolFoundation Restoration ofStamfordMillStream The W Diversity Awards Bartholomew ConsolidatedSchoolFoundation Installation oftwowaterpansinaridSamburu region International AssociationoftheLionsClub–Kenya Purchase ofgeneratorformobilelearninglab Tennessee Tech University Public educationandrecyclingcampaign Friends ofNature physical andpsychologicalneeds Extracurricular programsforstudentswith Dandelion MiddleSchool Eco-School energyandwaterefficiencyimprovementprojects Dandelion School Minds onMath Bartholomew ConsolidatedSchoolFoundation MCCIA ZeroGarbageProject Greenhouse andoutdoorclassroom Ladson ElementarySchool Renovation ofcommunityfarmbuildings Yorkshire W Advance scienceandtechnologyinCostaRica Amigos ofCostaRica/EstrategiaSigloXXI Improve waterqualityofParqueMoralesBoatingLake del Parque JuanH.SanchezA.C. Patronato Pro Regeneración Child abuseeducationandpreventioninNorthernKentucky Family NurturingCenter Columbus ParkFoundationExpansionofthePeopleTrails Environment Energy efficiencylightingproject Rowan GatePrimarySchool Education –continued GRANTEE ORGANIZATION elland RiversTrust ildlife Trust 90 SUSTAINABILITY2012–2013 REPORT Bloomington, Ind. Columbus, Ind. Columbus, Ind. Sunderland, U.K. Columbus, Ind. Nashville, Tenn. Columbus, Ind. Stamford, U.K. Columbus, Ind. Kenya &SouthAfrica Cookeville, Tenn. Beijing, China Beijing, China Beijing, China Columbus, Ind. Pune, India Ladson, S.C. York, U.K. Costa Rica San LuisPotosí,Mexico Florence, Ky. Columbus, Ind. Northamptonshire, U.K. COMMUNITY GRANT ORDONATION $250,000 $10,000 $10,000 $10,000 $10,200 $15,000 $32,000 $15,000 $35,300 $17,000 $38,500 $20,000 $40,079 $23,868 $55,000 $88,000 $27,000 $13,000 $32,000 $37,309 $18,885 $25,000 $25,000 FOUNDATIONS CUMMINS CUMMINS INC. 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 Materials tohelpdefineandremodelspace Eastside CommunityCenter Environmental Challengegrantrecipient Kandu Industries,Inc. Electronic documentmanagementsystem CommonBond Communities Environmental Challengegrantrecipient Housing Partnerships,Inc. Caregiver short break and day care services fordisabledyouth Caregiver shortbreakanddaycareservices Harewood HillLodge Janwani EnvironmentalChallengegrantrecipient Vocational trainingspaceforpeoplewithintellectualdisabilities Especializada A.C. Institución PotosinaPro-Educación City ofElkhartEnvironmentalChallengegrantrecipient Warehouse efficiencyproject Second HarvestFoodbankofSouthernW On-site viewingplatformandscreenmadefromrecycledplastic Durham W Co-fund purchaseofanewrefrigeratedtruck Food BankofEasternNewMexico Housing Partnerships,Inc.Energyefficiencyproject Build sevenspecializedroomsforchildrenwithcerebralpalsy Energy efficiencyproject Food BankofEasternNewMexico W Environmental Challengegrantrecipient Global VillageofBeijing to anationallevelofprominence Courage CenterElevateAssistiveTechnology Program United W Social Justice Solution forhouseholdwasteandagriculturepollution Global VillageofBeijing Environment –continued GRANTEE ORGANIZATION uxi SocialW ay AgenciesU.S.matchingprogram ildlife Trust elfare Center isconsin Brooklyn Park,Minn. Pune, India St. Paul,Minn. Henryville, Ind. Columbus, Ind. Janesville, Wis. St. Paul,Minn. Columbus, Ind. Darlington, U.K. Pune, India San LuisPotosí,Mexico Elkhart, Ind. Madison, Wis. Tyne &Wear, U.K. Clovis, N.M. Elizabethtown, Ind. Wuxi, China Clovis, N.M. SUSTAINABILITY2012–2013 REPORT 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 CORPORATE RESPONSIBILITY CORPORATE Recovery Committee,Inc.DisasterRelief The Putnam/OvertonCountyLongTerm Sans Souci,Inc.EnvironmentalChallengegrantrecipient Love ChapelEnvironmentalChallengegrantrecipient Environmental Challengegrantrecipient The PoonaSchoolandHomeforBlindGirls Environmental Challengegrantrecipient CommonBond Communities 17th AnnualReverseRafflefor Volunteers inMedicine Columbus RegionalHospitalFoundation CYP andLBCPartnership Support fundingforExecutiveAdministratorCAMEO, Columbus Area Chamber ofCommerce Foundation Improve safetyandstorage Secours Populaire Français–ComitédeQuimper for Gleanersandninefoodpantries Improve clienttrackingandreportingofdata Gleaners FoodBankofIndiana Website tonon-profitsinColumbusandSeymour services Connected CommunityPartnership Purchase andassemblefivegreenhouses Developmental Services,Inc. AFIC PhilanthropyAward Promoción SocialIntegral, A.C. Promote trainingcourseusingrecycledmaterial Ecoficina – Youth atRisk Complete aDVDproject,roofandbuildingreplacement W Recovery Committee,Inc.Tornado Relief Upper CumberlandLongTerm Gleaners FoodBankofIndiana,Inc.BacksackProgram to potentialclientsandfunders Increase awarenessandvisibilityofConcord Concord CommunityCenter Funding tosupport6Sigmaprojectandpurchaseadeepfreezer Crisis Ministries Establish businessesandempowerwomeninNorthernKenya The BOMAFund Autism Speaks2012LeadOffForACure Backfield inMotion,Inc.Purchaseof15-passengervan Gleaners FoodBankofIndiana,Inc.BacksackProgram AFIC PhilanthropicAwards Asociación MexicanadeAyuda aNiños Social Justice–continued GRANTEE ORGANIZATION isconsin Vietnam eterans MemorialProject 92 SUSTAINABILITY2012–2013 REPORT Cookeville, Tenn. Columbus, Ind. Columbus, Ind. Pune, India St. Paul,Minn. Columbus, Ind. Columbus, Ind. Quimper, France Indianapolis, Ind. Columbus, Ind. Columbus, Ind. San LuisPotosí,Mexico São Paulo,Brazil Neillsville, Wis. Carthage, Tenn. Seymour, Ind. Indianapolis, Ind. Charleston, S.C. Kenya New York, N.Y. Nashville, Tenn. Walesboro, Ind. San LuisPotosí,Mexico COMMUNITY GRANT ORDONATION $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $11,700 $13,100 $13,500 $15,065 $17,409 $19,400 $20,000 $20,000 $20,000 $20,000 $20,222 $25,000 $25,000 $25,000 $25,000 $26,316 FOUNDATIONS CUMMINS CUMMINS INC. 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 PatW Administrative Officer, Cummins Vice PresidentandChief Director MaryaRose Member ofCumminsBoardDirectors President –Wallace Foundation Director W and CommunityRelations,Cummins Vice President–CorporateResponsibility Director MarkLevett Chairman andCEO,Cummins Chairman Tom Linebarger Board ofDirectors by theseofficialsandcommittees: The CumminsFoundationisgoverned Foundation leadership ill Miller ard 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

ETY F SA 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Incidence RateIndicator Target Actual commitment tosafety. a signoftheCompany’s over thepastdecade, Indicator, havebeenfalling and theSeverityCaseRate the IncidenceRateIndicator Two keysafetymetrics, enhance safetyattheCompanyinfuture. in 2012whilerollingoutnewinitiativesthatshould Cummins improvedonseveralkeysafetymetrics Building onitsrecord-settingperformancein2011, Cummins’ sustainability Health andsafetykeyto Safety 2002 200320042005 2006 2007200820092010201120122013 2014 20152016 94 2011. TheCompanyenjoyedarecord year into 2012knowingitwouldbehard totop Cummins healthandsafetyleaderswent as muchwecare about ourown.” where wecare abouteachother’s safety an interdependent spiritin our organizations safety. To gettothatlevel,weneedbuild world classperformanceinhealthand Safety. “Our long termgoalistoachieve Janna, Director –Corporate Healthand to safetyin2012,”saidMichelleGarner- employees madeapersonalcommitment “I’m veryproud oftheway somanyofour SUSTAINABILITY2012–2013 REPORT 0.0 0.2 0.4 0.6 0.8 1.0 1.2 Severity CaseRateIndicator 2002 200320042005 2006 2007200820092010201120122013 2014 20152016 » » » in severalkeyareas, including: most ofthemandrecord improvements 2012, butneverthelessmanagedtomeet In response, Cumminsraised itsgoalsin for keysafetymetricsthefirsttimeever. for safetyin2011,meetingallofitstargets » » » in theSeverityLostWork DayRate. A 6percent improvement in2012 Rate compared to2011. A 12percent drop intheIncidence Severity CaseRatein2012. A 24percent reduction inthe 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 Innov Points of Safety » » » » » » continue falling(page94). Key safetymetrics (page 98). saves $1.7million Ergo Challenge (page 100). makes safetypersonal Team’s newwebtool ation

SAFETY

ETY F SA 96 Impact-driven, rigorous andcutting-edge, identification andsharingofbest practices. performing workplacesthrough the The Institutefostershealthyand high- (EHS) attheNationalSafetyCouncil. Environmental, HealthandSafety which istheCenterofExcellencefor Institute (www.thecampbellinstitute.org), to becomeamemberoftheCampbell In October2012,Cumminswasinvited CAMPBELL INSTITUTE 60 percent sinceitsimplementation. crane-related incidentsby more than The cross-functional effort hasreduced preventing thesetypesofaccidents. safety policyandatoolkitaimedat implementation ofare-designed crane In 2012,Cumminsconsolidatedthe for employeesandoperatorsalike. severe andposeanimportant hazard Crane-related injuriesare often damage thatcanresult ifa loadfalls. with cautionsimplybecauseofthepotential all hoistsandcranesshouldbeoperated complacency. Employeesmayforgetthat Sometimes familiaritycanbreed to severaltons. weighing from afewhundred pounds frequently usedtoliftheavyobjects At Cummins,hoistsandcranesare CRANE SAFETY the Companyshouldadoptinfuture. outside Cumminstoidentifybestpractices Safety Toolkit andpartnered withgroups The Companyalsorolled outanewCrane SUSTAINABILITY2012–2013 REPORT certain assemblytasks. improve thewayCumminsapproaches solution thatShieldsmithsays should help The partnershipresulted inathoughtful at Cummins. Shieldsmith, CorporateErgonomist pointofview,”an external saidChris Cummins ergonomicsupportfrom to assessassemblytasksanditgave students ahands-on,‘live’opportunity great opportunitybecauseitprovided Health andSafetyGroup saw thisasa “Both theuniversityandCorporate tasks from anergonomicperspective. Company approaches certain assembly Ala.,in2012tolookathowthe in Auburn, Cummins partneredUniversity withAuburn AUBURN UNIVERSITY Occupational HealthDirector. safety,” saidKelli Smith,Cummins’ fromlearn otherleadersinhealthand honor andawonderfulopportunityto Campbell Instituteisbothatremendous “We believeparticipatingin the and theWhirlpoolCorporation. Steel Corporation,UnitedTechnologies Industries Company, UnitedStates General Motors,GulfPetrochemical Company, ExxonMobilCorporation, members include:DowChemical Some oftheInstitute’s charter and financialperformance. and intrinsictooperationalexcellence of businessvitalityandsustainability, the InstitutebelievesEHSisatcore 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

ETY F SA enhancing efficiency. risk formultiplepeoplewhile fixture tosignificantlyreduce developing aninnovativehoist first ErgoCupcompetition, China wontheCompany’s Cummins PowerGeneration ergonomics acrosstheCompany. first ErgoCupcompetitioninthefallof2012topromote The CorporateHealthandSafetyteamlaunchedCummins’ Ergo Cupcompetition Cummins holdsfirstCompany-wide 98 culture throughout theCompany. and greatly encouragedan ergonomics ergonomics innewandcreative ways Cummins employeestothinkabout Safety officials saidthecontest inspired in costsavoidedandlostproductivity. the Companyanestimated$1.7million of thehumanbody. The70projects saved more safelyalignwiththenatural movement suggested waystoadjustworktasks locations around theworld. Employees in more than70entriesfrom Cummins The three-month competitionresulted SUSTAINABILITY2012–2013 REPORT of ergonomics. raised awareness abouttheimportance competition part oftheinternational While neitherproject won,justbeing tremendous force. the oldprocess ofpullingonstrapswith way enginesare secured tocartsavoid The Jamestownproject redesigned the ergonomicscompetition. an international (N.Y.) EnginePlantwere acceptedinto That project andaproject attheJamestown while enhancingefficiency. reduce thelevelofriskfor multiple people an innovativehoistfixture to significantly Power GenerationChina,developed presentation. Thewinning team, Cummins simplicity, cost savings,ergonomicriskand Contest entrieswere judged oninnovation, leading source ofinjuriesat theCompany. in awkward waysisnotonly inefficient, it’s a environments. Bending,reaching andlifting Ergonomics isthestudyofefficiency inwork with Cumminsemployees.” ergonomic bestpracticesandsolutions will beabletoshare evenmore outstanding this competitionwillgrow next yearsowe Cummins’ CorporateErgonomist.“Ihope these projects,” saidChris Shieldsmith, “I amreally pleasedbythequalityof 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

ETY F SA acts orconditionsworldwidesinceitwasinitiatedin2010. identification andrepairofliterallythousandsunsafe Engine BusinessUnit(EBU)atCummins,resultinginthe Safety montheachAprilwasalreadyabighitwithinthe W eb toolhelpsputsafetyfirst 100 most healthandsafetyproblems identified efforts asemployeesstrivetoreport the friendly competitiontotheEBU’s safety The FindIt,FixItcampaignadds alittle Global Operations. Safety andEnvironment Director ofEBU fixed now,’” saidBertrandPiredda, Health, decide ‘IwillgetthisfixedandIit change people’s behaviortogetthem “The mainpurposeofthisinitiativeisto 13,386 theprevious yearto28,449. more thandoubledinApril 2013,from EBU employeesaround the world,reports thenewtoolinplaceandrolled outto With they identifiedandfixed. keyboard that anyhealthorsafety concern to report withafewstrokes ofacomputer employees, whetherathomeorwork, “Find It,FixIt”campaign.Thetoolenables use, web-basedtoolaspartoftheEBU’s Working together, theycreated aneasy-to- Corporate ITstaff. Columbus EnginePlantandtheEBU’s the InformationTechnology staff atthe a newlevelthankstosafetyleaders, Event in2013,however, tooksafetyto Observance oftheEBU’s AprilAwareness SUSTAINABILITY2012–2013 REPORT at theColumbusEnginePlant, saidthetool Stacy Wyatt,HealthandSafety Engineer incorporating safetyintotheirdaily lives. because it’s anindicationthattheyare forsafetybeyondplant walls their concern Safety leaderslikeseeingemployeesextend condition intheparkinglotathisworkplace. even identifiedandfixedanunsafetraffic walking theplantfloor. Oneemployee potential obstaclesinthewayofworkers equipment withsharpmetaledgesand around rotating piecesofequipment, carts, theabsenceofprotective guards improper storageofhand tools andengine month in2013includedsuchthingsas The safetyproblems identified duringsafety without appearingcriticalorconfrontational. safety problems withtheir co-workers about talk can a frameworksoemployees safety oftheirco-workers.And it establishes interest notonlyintheirown safetybutinthe Cummins workerstotakeapersonal Safety leaderssaytheprogram encourages most problems. or teamsofemployeesthatresolve the cards andotherprizestothe employees and corrected. Somelocationsaward gift

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

PLOYEE RELATIONS PLOYEE M E to solveaproblemormeetchallenge. by bringingtogetherpeoplewithdiversebackgrounds Cummins haslongbelievedinthepowergenerated The powerofdiversityandinclusion Employee relations 102 back tolegendary CEOJ.IrwinMiller, 50 yearsofhistorytobuildupon, dating Fortunately, thedepartmenthasmore than where ideasflourish. howtodevelopaworkplace can gotolearn to bearesource where businessleaders business strategies.Thedepartmentwants business unitstoembeddiversityintotheir year, workingwithvariousdepartmentsand will befocusingoninclusionoverthenext Cummins’ GlobalDiversityDepartment that wetrulyseethepowerofdiversity.” perspectives. It’s incompetingideas expressing orreceiving different other withdignityandrespect when workplace meanstreating each Director. “Embracingdiversityinthe Goodlett, CumminsDiversityRelations agree witheachother,” saidAndre “We don’t askemployeestoalways into thepowerofdiversity. disagree onoccasion,iskey totapping safe toshare theirfullopinions andeven of anatmosphere where employeesfeel Cummins believesinclusion,thecreation workforce doesn’t endwithrepresentation. But leveragingthefullbenefitofadiverse SUSTAINABILITY2012–2013 REPORT the Companyin 1994. to diversity,” saidLinebarger, whojoined possible withoutourdeepcommitment “Cummins’ successtodaywould notbe in January2012. who tookoverasleaderofCummins Chairman andCEOTom Linebarger It’s aphilosophyshared bycurrent those more openandlessbiased.” ourselves offailure incompetitionwith ourselves mostofallandultimatelyassure in suchirrationalprejudices, wedamage the Company. “Whenweindulgeourselves in aquotationstillprominently usedacross some universitiesoverothers,”Millersaid races, orinpersonsholdingdegrees from in personswithcertainaccents,or concentrated inonesexovertheother, nor “Character, ability andintelligenceare not before thetermhadevenbeen coined. his deathin2004,waspracticingdiversity and servedontheBoard of Directors until some 40yearsbefore retiring in1977 Churches. Miller, wholedCumminsfor was president oftheNational Councilof 1963 March onWashington whenMiller who helpedDr. MartinLutherKingwithhis 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 Innov 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 ation

EMPLOYEE RELATIONS

PLOYEE RELATIONS PLOYEE M E opportunities forwomen. working hardtoincrease 7 p.m.CumminsIndiais in Phaltan,Indiaafter at Cummins’Megasite working ontheshopfloor Women cannowbeseen India after7p.m.Women. witnessed somethingrarelyseenonashopfloorin shift atTata Cummins LimitedPlant2inPhaltanhave For muchofthepastyear, workersonthesecond Pursuing diversityinIndia 104 Company officials evenmet withthe training andmore. Insome cases, and from theplant,providing self-defense facility, ensuring safetywhiletravelingto appointing femalesecurityguards atthe help womenwhowanttoworkthatshift, The planthastakenanumberofstepsto second shift. toallowwomenworkthe government of manufacturers givenpermission bythe Tata Cumminsisoneofaselectnumber are notallowedtoworkpast 7p.m.but two hourssoutheastofPune.Theynormally in theplantatCummins’Megasite,about Women are nowworkingfrom 2to10p.m. SUSTAINABILITY2012–2013 REPORT been noticedbythenewsmediainIndia. Company performance.Theirefforts have leverage thepowerofdiversitytoimprove through theprofessional ranks,andthento to increase diversityfrom theshopfloor Cummins leadershavebeenworkinghard women representation intheworkplace.” step inourcontinuedpursuittohavemore Tata CumminsJVLeader. “Thisisthenext a majorbreakthrough,” saidAshwathRam, have womenworkinthesecondshiftwas “Getting permissionfromto the government fears aboutworkingattheplant. parents ofjobcandidatestodispeltheir 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

PLOYEE RELATIONS PLOYEE M E a newAffinityGroup. share commoninterests,hedidn’thesitatetoorganize Cummins employeesinSouthernIndianatomeetand networking group.Sowhenhesawaneedforyounger Chang Suhadalreadyputtogetherasuccessfulsingles inclusive workenvironment Employee groups create 106 Cummins’ diversityvalue.” States asourbusinessunitsreally embrace especially seeinggrowth outsidetheUnited as theDiversityRelationsDirector. “We’re Andre Goodlett,whooverseesthegroups 10 percent peryearsince2010,”said groups hasbeengrowing byalmost “The charteringofemployeeresource demographic groups atCummins. career developmentofunder-represented years toaddress recruiting, retention and created byemployeesover thelastthree a growing numberofresource groups Indiana.It’sunder 30inSouthern oneof on completingthecircle for employees of Sanskritmeanscircle. The group focuses loosely translatedfrom the Indianlanguage Su andotherscreated Mandala, which need awaytomeet.” and different departmentsandthey “But theyare indifferent businessunits Emission SolutionsinColumbus,Ind. said Su,anAccountSpecialistatCummins 1,500 Cumminsemployeesunder30,” Indiana,there“In Southern are about SUSTAINABILITY2012–2013 REPORT Onboarding, AdvancingandRetaining. later, shehelpedstartROAR–Recruiting, Company intheMayof2012. A fewmonths Power GenerationinKent,U.K.,joinedthe Sarah Wyllie,anHRGeneralistatCummins in recent years. Brazil, China,IndiaandtheUnitedKingdom have beenestablishedinAfrica,Australia, outside theUnitedStates.Newgroups embed diversityinCumminsoperations Company efforts in2010and2011to Groups andmuchofithas followed Most ofthegrowth hascome from Affinity employees; veterans,womenandmore. lesbian, gay, bisexual andtransgender employees withdisabilities,Latinos, representing African-Americans, 50 Affinity Groups across theCompany There are 51LocalDiversityCouncilsand work environment ataparticular location. groups chargedwithcreating aninclusive Diversity Councils,whichare site-based Affinity Groups, theCompanyhasLocal employee resource groups. Inadditionto Cummins hastwodifferent kindsof 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

PLOYEE RELATIONS PLOYEE M E in 2012. tradeshow inIndianapolis a diversityprocurement The Cumminsteamat caution thereismuchworkahead. the UnitedStatesareofftoagoodstart,butleaders Cummins’ effortstotakediversityprocurementoutside Diversity Procurement goesglobal 108 the Companyacompetitiveadvantageby benefits. Developingdiversesuppliersgives is akeybusinessstrategywithbottom-line Cummins believesdiversityprocurement model asaone-sizefitsallapproach.” we wantistouseourNorthAmerican regions.international Thelastthing careful todevelopinitiatives thatfitour Procurement Leader. “Butwemustbe said MichelleTaylor, CumminsDiversity is aconceptthatappliesglobally,” “We cantrulysaythatdiversity procurement by MinoritySupplierDevelopmentU.K. Corporation oftheYear award presented Company wasalsorunnerupforthe2012 ethnic minority-ownedbusinesses.The China, whichlinkslargecorporationsand the Year byMinoritySupplierDevelopment Cummins wasnamed2012Corporationof SUSTAINABILITY2012–2013 REPORT both oftheseareas in2012. The Companymadeprogress in its spendingwithdiversesuppliers. both theamountandpercentage of team. TheCompanyalsowantstoincrease goal ofCummins’DiversityProcurement procurement isjustone internationally Expanding thescopeofdiversity United States. it hasstartedtotakeroot outside the based companies.Butinrecent years, an initiativeprimarilypursuedbyU.S.- Diversity procurement startedas where Cumminsemployees liveandwork. opportunities withinallcommunities expectations andcreates economic needs. Italsoalignswithcustomer increasing competitionforitsbusiness » 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

PLOYEE RELATIONS PLOYEE M E Columbus, Ind. Technical Centerin engineer atCummins Harsh Khandelwalisan a sustainableworkforce. Cummins neverstopsworkingtodevelop key tosustainability Developing newleaders 110 reason foroursuccess,”Linebarger said support ouremployees,whoare the growing leaderswhocanmotivate and “Leadership developmentiscriticalfor environment forsuccess. critical tocreating theright work Company’s fivekeygrowth accelerators, has identifiedleadershipasoneofthe Chairman andCEOTom Linebarger next generationofleaders. of initiativestotrainanddevelopCummins’ is especiallyimportant,soitoffers anumber And theCompanybelievesgreat leadership management systemtohelpthemsucceed. job. Itcontinueswitharobust performance onboarding sessionsontheirfirstdaythe The effort startswhenemployeesbegin SUSTAINABILITY2012–2013 REPORT » » » » » essential togreat leadership: key skillareas Cumminsbelieves are a developmentmindset,builtonfive on thattosucceedtheymusthave early Leaders andmanagerslearn generation now.” developing newleadersforthenext our Company’s long-termsuccessby in 2012.“Itisalsoimportantforensuring in hisyear-end messagetoemployees » » » » » Think strategically/Settheaim Talent management Manage diversity Foster opencommunications Coach anddevelop 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

ERNANCE ERNANCE V V GO GO global company. intellectual propertyata responsibly toprotecting from usingsocialmedia new guidanceoneverything The updatedCodeincludes an updatedCumminsCodeofBusinessConduct. 2013byreleasing and ethicalbehaviorinJanuary Cummins reneweditscommitmenttogoodgovernance New codeguidesethicalbehavior GOVERNANCE

Code of Business Conduct Ethics Driven — Every Time

Report ethical concerns at ethics.cu 112 up toourstandards,” headded. and toreport behaviorthat doesn’t live employees tobehaveethicallyatalltimes unchanging responsibility as Cummins “It alsoreminds usofourkey and employees announcingtheupdate. Tom Linebargersaidinanotetoall world,” CumminsChairmanandCEO compete fairlyforbusinessaround the and howwetreat eachother tohowwe ranging from ourcommitment todiversity “The updatedCodeaddresses issues SUSTAINABILITY2012–2013 REPORT

mmins.com 1 The updateincludesnew guidance oneverything from usingsocialmedia responsibly toprotecting intellectual property at aglobalcompany. The updatealsoincludes numerous reminders that there are multipleways to report apotential problem orgetadvice to avoidproblems. around Cummins’10Ethical Principles: in 16languages.Itcontinuestobebuilt posted ontheCompany’s Intranetsite The updatedCodewastranslatedand and cultures. to ensure itwasrelevant across borders as wellemployeesaround theworld leaders andCumminsBoard ofDirectors, The documentwasreviewed byCompany Ethics andCompliancestaff in2012. completed bytheCompany’s new The updatewasoneofthefirsttasks The Codewaslastupdatedin2009. to reflect societalandbusiness changes. Cummins periodicallyupdatesitsCode 4 3 2 everywhere. 1 We willavoidconflictsofinterest. We willcompetefairlyandhonestly. and respect. and treatallpeoplewithdignity perspectives andbackgrounds We willembracediverse We willfollowthelaw– on ethicsandcomplianceissues. assess where Cumminsstandsglobally and professional employeesin2012to the Companyalsosurveyedoffice In additiontoupdatingtheCode, ETHICS SUR 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 VEY 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 Innov Points of Governance » » employees (page112). Updated Codeguides ation

GOVERNANCE

ERNANCE V GO Training going backtowhenthetrainingcourseswerefirstimplemented: year atCummins.Thesefiguresareaccumulatedenrollments Thousands ofemployeesreceivecompliancetrainingevery 2012 COMPLIANCETRAINING Grand Total Security Standards Compliance Payment Card IndustryData theLaw Managing Within Fair LaborStandards Act At Work Treatment ofEachOther Information Management Records / Lobbying andPoliticalActivity Intellectual Property Information Protection Principles andPractices Global Competition Export Compliance Conflicts ofInterest Code ofBusinessConduct Careful Communication Antitrust andFairCompetition Anti-bribery 114 SUSTAINABILITY2012–2013 REPORT 183,663 Enrolled Complete 13,625 23,209 23,365 11,689 18,031 22,967 14,454 23,477 18,364 18,103 98 5,807 322 528 515 572 PERCENT 100 100 98 98 99 98 97 98 99 97 96 98 97 98 99 all reports are investigated. are actedonswiftlyandappropriately and atany leveloftheCompany Line. Violations They canalsocalltheCummins EthicsHelp it on-lineatethics.cummins.com. and Compliancestaff andtheycanreport supervisor, theLawDepartment,Ethics Human Resources representative, their including through seniorleaders,their They candothatinanumberofways, great placetowork. and preserve whatmakes Cummins a Business Conductviolationstoprotect obligation toreport suspected Codeof frequently reminded thattheyhavean to beeffective. Cumminsemployees are Any codeofconductmustbeenforced AND INVESTIGATIONS ETHICS VIOLATIONS, REPORTING Cummins CodeofBusinessConduct. to helpemployeesstayalignedwith and newtraininginitiativesare established in theseareas are periodicallyupdated The Company’s policiesandprocedures available inmultiplelanguages. is delivered through on-linecourses and PoliticalAction.Mostofthetraining and InformationProtection toLobbying on topicsrangingfrom Anti-Bribery The Companyhasrequired courses promote ethicalbehavior. appropriate employeegroups to compliance trainingprogram targeting into practicethrough acomprehensive Cummins putsitsethicalprinciples TRAINING 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 13 cases substantiated Percentage ofthose 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 54 1,196 17,666 14,000

GOVERNANCE

ERNANCE V GO Board exercises independentjudgment » » » » » issues, including: The Board monitorsanumber of key Companypersonneltoreview strategy. new CustomerCare facility, meetingwith Nashville, Tenn., in2012toseeCummins’ responsibilities. Forexample, ittraveledto The Board takesanactive role infulfillingits election annually. Company. Each Director muststandfor eight directors are independentofthe on theBoard ofDirectors. Theother Linebarger istheonlyCumminsemployee Cummins ChairmanandCEOTom MissionandValues.with Cummins’Vision, principlesconsistent and adoptsgovernance The Board alsoadvisesseniormanagement significant, strategicandoperationalissues. independent businessjudgmentregarding stakeholders. Itexercises soundand and protecting theinterests ofCummins’ affairs oftheCompany, representing The Board ofDirectors overseesthe 116 » » » » » and riskmanagementpractices. The effectivenesscontrols ofinternal with stakeholders. Communications andrelationships and regulations. Compliance withallapplicablelaws The performanceofseniormanagement. The performanceoftheCompany. SUSTAINABILITY2012–2013 REPORT

audit grade. or businessreceives an“Unacceptable” the Board ofDirectors whenafunction action plantotheAuditCommittee of functional leadermustpresent acorrective up process. Theresponsible businessor Audithasaformal follow- action, Internal identified risksandimplementedcorrective To ensure managementhasaddressed 134 auditreports andmemos. AuditGroupIn 2012,theInternal published Audit CommitteeoftheBoard ofDirectors. President Auditreports –Internal tothe Company’s control environment. TheVice information ontheperformanceof leaders independentandobjective provides toBoard membersandsenior Auditdepartment Cummins Internal INTERNAL AUDIT membership ofcertaincommittees. requirements the concerning York StockExchange andregulatory The CompanycomplieswithallNew » » » » » » has sixstandingcommittees: Cummins Board ofDirectors COMMITTEES » » » » » » Technology Committee Safety, Environment and andNominatingCommittee Governance Finance Committee Executive Committee Compensation Committee Audit Committee

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 in1989. K-12 educationandthearts. Wallace Foundationfocused on President oftheNewYork-based William I.Miller He joinedtheBoard in2009. based inHouston,Texas. spaceflight engineeringcompany Astra RocketCompany, aU.S. Chairman andCEOofAd Franklin Chang-Diaz He joinedtheBoard in2004. Investment Properties LLC. and President andCOO,Ware Retired Coca-Colaexecutive Carl Ware serves asLeadDirector. the Board in2001andcurrently consulting company. Shejoined Ventures, LLC,acorporate Chairman andCEOofNew Alexis M.Herman SUSTAINABILITY2012–2013 REPORT 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 He joinedtheBoard in2010. project managementservices. construction, maintenance,and that offers engineering,procurement, Corporation, aFortune500company Senior Group President atFluor Stephen B.Dobbs 117

GOVERNANCE

ERNANCE V GO program iscriticaltothesustainabilityofanycompany. Cummins stronglybelievesthatarobustRiskManagement keeping employeessecure Managing risks, 118 to theCompany, theRiskManagement Underscoring itsstrategicsignificance Sigma research andevaluationtools. steps tomitigatespecificrisksusingSix assigns teamsofemployeestodevelop Cummins, andtheCompanyfrequently updated toreflect changesinandoutside Company. Thedashboard isconstantly outlining thebiggestrisksfacing Board ofDirectors andseniorleaders to prepare adashboard fortheCummins The RiskManagementteamcontinues regions oftheworld. to meetingcustomerneedsinparticular processes functioningthat are critical midst ofacrisis,buthowtokeepglobal particular locationsoperatinginthe focusing notjustonhowtokeep management efforts inrecent years, Cummins hasbroadened its risk Sandy onpage126). effectively (seeCummins’ response to to businessesthatfailmanagerisk the latestreminder ofwhat canhappen States inthefallof2012,wasmerely much oftheEastCoastUnited Super StormSandy, whichdevastated SUSTAINABILITY2012–2013 REPORT and more effective, embedding business new approach isbothmore sustainable Risk Managementleadersbelievethis reducing theamountoftravelnecessary. each sitetocompleteaplan,significantly The teamisworkingtotrainapersonat than 400locationswillbenecessary. To accomplishthisgoal,plansformore sites, bytheendof2014. joint-venture DistributionBusiness Unit location, includingallwhollyownedand of completingaplanforeveryCummins the pastfewyearsandhassetagoal completion ofmore than160 plansover Management teamhasoverseenthe to keepalocationoperating.TheRisk detail step-by-stepwhathastobedone Business ContinuityPlansatCummins BUSINESS CONTINUITYPLANS of theRiskManagementteam. Plans remains animportant responsibility The developmentofBusinessContinuity identify bothstrengths and weaknesses. an auditinlate2012andearly2013,to Strategy. Thefunctionalsounderwent function wasshiftedin2012toCorporate 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

ERNANCE V GO legislation, taxes,tradeandtransportationtonamejustafew. on theCompany, suchasenergypolicy, environmental world workingonissuesthatmighthaveasignificantimpact Cummins hasgovernmentrelationsemployeesaroundthe Ensuring Cummins’voiceisheard 120 matters criticaltotheCompany. officials knowwhere Cummins standson in thesegroups helpsensure government issue, theCompanybelievesparticipating positions theseassociationstakeonevery While Cumminsmightnotagree withthe issues where weshare similarpositions. resources withothercompanieson the CompanybyleveragingCummins’ interests. Theseorganizationshelp organizations tofurtheritsbusiness Cummins belongstoanumberoftrade commercial vehicles. gas andfuelconsumptionsstandards for effortsgovernment toestablishgreenhouse from delayormodification andsupports and protect emissionsstandards globally Cummins worksextensivelytopromote Cummins’ voiceisheard. For example, These employeesworktoensure that relations employeesinChina andIndia. the Companyalsohasgovernment coming from outsidetheUnited States, more ofCummins’salesin recent years Washington, D.C.,butwithhalfor The Companymaintainsanoffice in SUSTAINABILITY2012–2013 REPORT go towww.fec.gov. committee’s contributionstocandidates, For acompletelistofthepolitical action to stateandfederallaw. Executive Committeeandaccording after review andapproval byCIPAC’s candidates onabipartisanbasis contributions tostateandfederal employee contributions.CIPAC makes committee isfundedsolelybyvoluntary Action Committee(CIPAC), butthe are madebytheCummins Inc.Political In theUnitedStates,politicalcontributions and amounts. the outcome,includingrecipient names payments madedirectly to influence is committedtopubliclydisclosingany to theCompany’s interests, Cummins On ballotmeasures deemed important in politicalactivity. groups intheUnitedStates engaged to 501(c)(4)and527tax-exempt campaigns. Thisbanincludescontributions parties andindependentexpenditure corporate fundstocandidates,political Cummins banscontributionsusing POLITICAL CONTRIBUTIONS 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

INANCIAL INANCIAL F F economic slowdown. for Cumminsinthesecondhalfof2012 amid a global After arecordstart,revenuesslowedconsiderably slows Cummins Global economicslowdown Financial 2012 2011 2010 2009 2008 Year Sales Here’s asummaryofCummins’performancesince2008. Financial performanceat aglance $17.3 billion $18 billion $13.2 billion $10.8 billion $14.3 billion 122 the challengingeconomy. ratings forCumminsfrom A- toAdespite Issuer DefaultRatingandlong-termdebt Fitch RatingServicesraiseditsLong-term 25 percent inthethird quarterof2012and The Companyincreased its dividendby 2010 anda61percent increase over2009. represented a31percent increase over in Companyhistory. Revenuefor2012 it wasthesecondbestrevenue year to $18billionin2011.Despitethedrop, Revenues were $17.3billion compared SUSTAINABILITY2012–2013 REPORT attributable toCummins Net income $1.65 billion $1.85 billion $1.04 billion $428 million $755 million truck andmining engines. generation equipmentandconstruction, marketsforpower demand ininternational The Companyalsoexperienced lower and oilgasmarketsinNorth America. by weakerdemandintruck,construction, The decrease year-over-year wasdriven in mostmajormarketsandgeographies. same quarterin2011,reflecting weakness 2012 wasa13percent decrease from the Fourth quarterrevenue of$4.3billionin end marketsin2013.” the timingandpaceofimprovement in however, there isuncertaintysurrounding when theglobaleconomyimproves, inventory shouldbenefittheCompany undertaken toreduce costs andlower Linebarger said.“Theworkwehave full yeardespitetheweaknessindemand,” quarter andrecord gross marginsforthe improved gross marginsinthefourth “I ampleasedthatwewere abletodeliver Chairman andCEO. said Tom Linebarger, Cummins 2012 astheglobaleconomyslowed,” and endmarketsinthesecondhalfof declined across mostgeographies “After astrong starttothe year, demand 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 Innov Points of Financial » » » » trucks (page124). for Rampickup 2-millionth engine Cummins builds (page 126). Super StormSandy first in responding to Team puts customers ation

FINANCIAL

INANCIAL F and valvecover. edition redbreathercover engine sportedaspecial occasion, the2-millionth To commemoratethe certainly trueoftheRamTruck-Cummins dieselpartnership. a marriage,friendshiporbusinessrelationship.That’s Enduring relationshipspassthetestoftimewhetherit’s celebrates majormilestones Ram-Cummins partnership 124 Columbus (Ind.)MidRangeEnginePlant. pickups inDecember2012atthe 2-millionth enginewasbuiltforRam Operations. Hewasspeakingafterthe Pickup andLightCommercial Vehicle Wayne Ripberger, GeneralManager– of whichweare immensely proud,” said employees, andisanaccomplishment achievement forCumminsandour “This milestonebuildisasignificant Chrysler Group LLC. produced more than2millionenginesfor Over thepast25years,Companyhas Engine PlantinRockyMount,N.C.,1988. Ram rolled off thelineatRockyMount for RamTrucks sincethefirstenginefor Cummins hasbeenbuildingdieselengines SUSTAINABILITY2012–2013 REPORT 3500, 4500and 5500chassiscabs. trucks andisalsoavailableinthe Ram the Ram2500and3500heavy-duty pickup The Cummins6.7LTurbo Dieselpowers Cummins engineinmyRamTruck.” where theyworktellthem:“Ijustlovethe stopped bystrangerswhouponlearning Cummins employeessaytheyare frequently of pickuptruckowners. has ledtoanextremely loyalfollowing of power, durabilityandinnovationthat powered RamTrucks? It’s thecombination What’s sospecialaboutCummins- powered Ramcandeliver.” the toughnessandcapabilityaCummins- real beneficiaries.Everyday theyexperience greatly, butRamdieselcustomersare the Mexico. “Bothcompanieshavebenefited CEO –RamTruck BrandandChryslerde tribute,” saidFred Diaz,President and enduring andcertainlyfittingofsucha partnership isoneoftheindustry’s most “The RamTruck-Cummins diesel has benefitedbothcompanies. milestone, Chryslernotedthepartnership In itsownnewsrelease marking theengine it’s thefirstor2-millionth,”hesaid. each andeveryenginewebuild–whether “At Cummins,wetakegreat pridein 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 w pickup andlight commercial proud. AtCummins, ayne ripberger 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

INANCIAL F in Newark,N.J. at thecompany’s facilities left bySuperStormSandy caught inthefloodwaters line onaCumminstruck LLC, pointstothewater Cummins PowerSystems, Scott Patrohay, President– cell phoneinhislap. nodded offathisNewJerseyhome,computerand his phoneringing40or50timesperhouruntilhefinally Systems’ StevePhilipswent21hourswithoutsleep, At theheightofSuperStormSandy, CumminsPower in wakeofSandy Putting customersfirst 126 Power SystemsinNewark,N.J. his office wasunderwater atCummins felt. Thepowerwasoutathishomeand He knewfirst-handhowhiscustomers Rental PowerfortheNewYork district. can,” saidPhilips,GeneralManager– “You justgotta trytohelpeveryoneyou mammoth storm. and NewJerseyleftpowerlessbythe for desperatecustomersinNewYork the phoneagain,tryingtofindgenerators Three hourslater, hewasbackworking SUSTAINABILITY2012–2013 REPORT flooded hisoffice. after SuperStormSandy from hisNewJerseyhome helping Cumminscustomers Steve Philipsspentlonghours people intheregion lostpower. power Wall Street. Anestimated6million the underground electrical systemsthat York Citythat floodedsubwaytunnelsand a 13-footsurgeofseawatertoward New 2012, packing80mphwindsandpushing who lostsleepafterSandyhitinOctober Philips wasn’t theonlyCummins employee 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-hourbasis. 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

INANCIAL F aftertreatment system. isworkingonan Point, Wis., Emission SolutionsinMineral This employeeatCummins in theCompany’s supplychain. lean, greenandflexibleplants highly integratednetworkof Cummins wantstodevelopa relies onafullyintegratedglobalsupplychain. Cummins’ commitmenttosustainablegrowth Committed toaglobalsupplychain 128 cost reduction toimprove profitability. service whilealsodrivingefficiency and the Company’s commitmenttocustomer five keygrowth accelerators, builtaround Today, thesupplychainisoneofCummins’ through production, deliveryandbeyond. the momentacustomerorders aproduct supply chaintoincludeeverythingfrom The Companyusesabroad definitionof SUSTAINABILITY2012–2013 REPORT by $2.9million.Improved rateswere was abletoreduce itscurrent expenses express transportationcosts,theCompany afocusonCummins’ January 2012.With parcel provider project, implementedin One exampleofacostsavingswasthe and transportation,”sheadded. manufacturing, warehousing, planning, have beendevelopedacross purchasing, “Integrated, yetfocused,strategies Chain andManufacturing. Yoder, President Vice –GlobalSupply and developourtalentglobally,” saidLisa impact, leverageadiversesupplybase, commitment toreduce our environmental encompasses ourCompany-wide “Our visionforsupplychaintransformation improved efficiency andutilization. its spendingonfreight and drive Company wasabletobetterleverage transportation andlogistics,where the The majorityoftheprojects focusedon bottom-line valuetoCummins. $64 millionwasrealized as adirect in project costsavingsin2012 and The organizationidentified$85million to reducing costsby1percent ofsales. supply chainorganizationcommitted As partofthejourney, theCompany’s significant progress wasachievedin2012. transformation startedinlate2010and Cummins’ five-yearsupplychain 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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