Cummins Inc. 2007 Sustainability Report

We continuously
work with
customers to
develop new
products to
improve the
performance of
their vehicles,
equipment or
systems at
competitive
cost levels.
Net Sales ($ in billions)
$6.3
$8.44
$9.92
2003 2004 2005 2006 2007
EBIT as a Percentage
of Sales (%)
$11.36
$13.05
Economic Performance
Cummins’ financial performance in 2007
was the best in its history. Sales exceeded
$13 billion – a 15 percent increase over
2006. Earnings before interest and taxes
were $1.2 billion – or 9.4 percent of sales.
Net earnings were $739 million, compared
to $715 million for the previous year.
This fourth straight year of record sales
and profits reinforces our value promise
to shareholders. As of the end of 2007,
Cummins investors have enjoyed a five-year
average annual total return of 58 percent.
Along with this outstanding performance,
we have increased our dividends by 67
percent and purchased almost $500
million in stock over the last two years. In
December, we announced plans to buy
back another $500 million worth of shares.
We also executed a pair of two-for-one
18 Cummins Inc. 2007 Sustainability Report
2.9
6.4
9.1
10.4
9.4
2003 2004 2005 2006 2007
Diluted Earnings
per Share ($)
$0.32
$1.85
$2.75
2003 2004 2005 2006 2007
Cash from Operating
Activities ($ in millions)
$276
$749
$911
$3.55
$3.70
$1,106 $1,060
2003 2004 2005 2006 2007
stock splits, one during 2007 and the other
in early 2008.
Cummins has benefited from strong
demand across a number of our more
cyclical markets, and our focus on
execution has delivered excellent bottomline
results. We are seeing margin
expansion and profitable market share
growth with disciplined pricing, a focus
on cost reduction and superior product
performance in existing and emerging
markets. And we are building a core base
of stable, diversified earnings that will
continue to provide increased stability in
our financial performance.
Our extended effort to build relationships
and infrastructure in China and India and
other emerging markets has positioned us
to capture significant growth opportunities