Cummins Inc. 2007 Sustainability Report

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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 $1,060 2003 2004 2005 2006 2007 stock splits, one during 2007 and the other in early 2008. Cummins has benefited from strong demand across a number of our more cyclical markets, and our focus on execution has delivered excellent bottomline results. We are seeing margin expansion and profitable market share growth with disciplined pricing, a focus on cost reduction and superior product performance in existing and emerging markets. And we are building a core base of stable, diversified earnings that will continue to provide increased stability in our financial performance. Our extended effort to build relationships and infrastructure in China and India and other emerging markets has positioned us to capture significant growth opportunities
JV Income ($ in millions) $74 $120 $131 2003 2004 2005 2006 2007 Return on Equity (%) 3.8 21.3 $140 25.7 25.1 in those markets. Several new product platforms also offer us great profitable growth opportunities across all of our business units. However, our future success is directly dependent on our ability to build the infrastructure and operating system, create excellent customer support worldwide and recruit the diverse talent necessary to get this done. Detailed financial information can be found in the Investors and Media section of the Company’s website, www.cummins.com. The Cummins’ Fact Book, also found on the web site, provides a brief summary of the Company and contains income statement and balance sheet trends for the past 10 years. $205 20.8 2003 2004 2005 2006 2007 JV income is recorded as Investee Equity, Royalty and Other Income in regulatory filings. EBIT is a non-GAAP measure, defined as earnings before interest expense, income taxes and minority interests. The return on equity calculation is a non-GAAP measure as it excludes pension and other post-retirement benefit amounts in shareholders’ equity. Competitive Strengths We believe the following competitive strengths are instrumental to our success: Leading Brand. Our product portfolio includes products and services marketed and branded under various trademarks and trade names, primarily Cummins, throughout the world. During 2006, we successfully re-branded our major operating business units to reflect the Cummins name and brand to further our overall branding strategy. In part, as a result of this investment, we also are gaining additional recognition across our markets. Customers and Partners. To maintain technology leadership and a global presence in a cost-effective manner, we have established strategic alliances with a number of our leading Our Profile 19
Page 1: Cummins Inc. 2007 Sustainability Re
Page 4 and 5: Cummins Inc. About this Report The
Page 6 and 7: “Corporate responsibility and wor
Page 8 and 9: The power of our Company is not jus
Page 10 and 11: “On any given day, there are appr
Page 12 and 13: As of the end of 2007, Cummins was
Page 14 and 15: “Cummins can create an advantage
Page 16 and 17: Cummins uses a voice of the custome
Page 18 and 19: Cummins has launched a focused effo
Page 22 and 23: “We rely on our core values to gu
Page 24 and 25: Going back to its earliest days, Cu
Page 26 and 27: “Cummins has created an environme
Page 28 and 29: In 2007, Internal Audit issued more
Page 30 and 31: “Cummins leverages the expertise
Page 32 and 33: The primary mission of the Board of
Page 34 and 35: “Every employee at Cummins should
Page 36 and 37: As a result of our outstanding tech
Page 38 and 39: “We believe we can’t be success
Page 40 and 41: Having the ability to meet a broade
Page 42 and 43: Cummins has worldwide experience an
Page 44 and 45: “We believe the right technology
Page 46 and 47: “We take pride in our work and ar
Page 48 and 49: “Being a lowcost producer is esse
Page 50 and 51: Emission Solutions offers exhaust a
Page 52 and 53: “The best way to have great emplo
Page 54 and 55: “Cummins’ future is based on ho
Page 56 and 57: The Cummins Science and Technology
Page 58 and 59: By the end of 2007, Cummins had 42
Page 60 and 61: “I am honored to work at a compan
Page 62 and 63: Manufacturing Operations For perspe
Page 64 and 65: Materials Category 2004 2005 2006 M
Page 66 and 67: “Working for a winning organizati
Page 68 and 69: Significant emissions reductions ha
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Ozone Depleting Substances In 1995,
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“We view our vendors and supplier
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Our goal is to make Cummins a best-
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“The safety and well-being of our
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Entities are recognized at four dis
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“Creating a great place to work i
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“Every person must be treated wit
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“Being a successful company means
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Cummins Named Among Top 50 Companie
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“At Cummins, we strive to foster
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Cummins’ focus on corporate respo
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From raking leaves to reading to ch
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“Six Sigma is an indispensable im
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The Cummins Foundation Report Cummi
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The Cummins Foundation - 2007 Grant
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Grantee Community Purpose Amount Pa
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Cummins Inc. 500 Jackson Street Col
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Cummins Inc. 2007 Sustainability Report

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