Cummins : 2021 Chairman's Letter

TO CUMMINS SHAREHOLDERS:

In 2020, we delivered a strong financial performance despite the significant impact on our business from the ongoing COVID-19 pandemic. We experienced both the largest decline in revenues (Q1-Q2) and the largest increase in revenues (Q2-Q3) in our company's history. The pandemic's onset resulted in an unprecedented decline in demand and facility shutdowns for ourselves and our customers. In order to maintain our financial strength, we made a difficult decision to temporarily reduce management and employee salaries.

As we continue operating in a pandemic, demand has recovered in many of our key markets worldwide. Our facilities have reopened and we have reinstated full salary benefits for our employees. I remain confident that we have the right strategy in place to continue powering a more prosperous world for our customers and shareholders for the next 100 years.

2020 FINANCIAL PERFORMANCE

Revenues for the full-year 2020 were $19.8 billion, 16 percent lower than 2019.

In North America, revenues declined 21 percent and international revenues declined 7 percent.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the year was $3.1 billion, or 15.7 percent of sales. This compares to EBITDA of $3.7 billion, or 15.8 percent of sales in 2019 excluding the impact of restructuring.

Net income attributable to Cummins for the full year was $1.8 billion. This compares to $2.3 billion in 2019, or $2.4 billion excluding the impact of restructuring.

DELIVERING SHAREHOLDER VALUE

In 2020, Cummins generated a Return on Invested Capital of 15 percent while returning $1.4 billion of Operating Cash Flow to shareholders in the form of dividends and share repurchases.

The company increased the dividend from $1.311 to $1.35 a share, our 11th straight year of dividend growth. This increase is indicative of the company's commitment to delivering strong returns to shareholders and reflects confidence in our short- and long-term performance.

We delivered strong results despite volatility impacting our industry and markets across the globe, continuing our track record of raising performance cycle-over-cycle.

We continued launching new products across our segments and applications that are performing more efficiently while reducing the impact on our environment:

• n We began shipments of our X12 heavy-duty truck engine to Freightliner for use in their Cascadia day and sleeper cab models and our B6.7 medium-duty truck engine to Mack for their MD Series platform;

• n We began shipments of our next generation Bharat Stage VI (BSVI) compliant aftertreatment systems in India;

• n In the battery electric market, we delivered 147 full-electric powertrains to Blue Bird in 2020 for use in the school bus market, and 19 powertrains to GILLIG for use in the transit bus market. Our products are now powering over 250 school buses, which are

actively in service today in addition to transit buses operating in municipalities around North America.

n Cummins now has more than 2,000 fuel cell installations as well as more than 500 electrolyzer installations and recently commissioned the largest proton exchange membrane (PEM) electrolysis plant in the world in Becancour, Canada, for Air Liquide.

n

We formed the NPROXX joint venture to provide customers with high-pressure tank and storage solutions in hydrogen and natural gas markets.

As we enter 2021, we will continue to invest in the products and technologies that will fuel profitable growth, strengthen our existing broad portfolio of power solutions and return capital to shareholders, while maintaining the flexibility to ensure that we can weather any volatility that may be ahead.

A dynamic environment presents a significant opportunity for Cummins to leverage our technology leadership, application knowledge and global distribution network to succeed in our markets, just as we have throughout the past 102 years. We are continually innovating across our portfolio from diesel and natural gas to fuel cells, hybrid and full-electric options. We will provide our customers with the right technical solution for their application at the right time, and continue to be a global leader in power for commercial and industrial equipment.

COMMITMENT TO OUR STAKEHOLDERS

Our long-standing commitment to our stakeholders - our communities, customers, employees, partners and shareholders - remains a top priority as we plan for and respond to the dynamic situation surrounding the pandemic. Aligned with our stakeholder model, we believe that each stakeholder in a company is served best by serving every stakeholder.

At Cummins, we do this by living our core values inside and outside of the workplace. For example, we know that our business's success depends on our ability to create a diverse and inclusive culture. We recognize and appreciate the differences brought by our employees, customers and suppliers that ultimately allow us to deliver superior results. Our more than 100 employee resource groups and local diversity councils for employees promote diversity and inclusion across the globe.

We also believe that communities and businesses thrive when we create more equitable and inclusive environments.

In support of this, in October, we launched the Cummins Advocates for Racial Equity (CARE) initiative. CARE focuses on achieving police reform, realizing criminal justice reform, creating economic empowerment by building Black wealth and income, and driving social justice reform in healthcare, housing, workforce development and civil rights, including voting rights and education.

Our commitment to our stakeholders includes doing our part as a company to address climate change, engineering solutions to large-scale global issues and improving the communities where we live and work. We have started implementing PLANET 2050, the company's environmental sustainability strategy that was announced in 2019 to address climate change and other environmental challenges. The strategy includes specific environmental goals for 2030 and the aspiration to power customer success with carbon neutral technologies that address air quality issues by 2050. Meanwhile, we completed work on our 2020 goals to reduce energy, waste and water in our operations.

At a time when our communities need us more than ever, we issued almost $2.6 million in emergency grants to our trusted community partners for food, education and other much needed COVID-related relief. In total, we issued more than $22 million in grants last year, which is a record level of community giving for our company. Additionally, we used our filter technology to provide more than 146 tons of filtration media to mask manufacturers across the globe, which has been used to produce more than 108 million masks.

LOOKING AHEAD

As of the time of writing this, demand has improved in many of our end markets, although the COVID-19 pandemic continues to impact our global stakeholders and operations. Having effectively managed through an extremely challenging 2020, Cummins remains in a strong position to keep investing in future growth as we continue to execute our strategy.

Tom Linebarger

Chairman and Chief Executive Officer Cummins Inc.