content_image/66513.jpg
## Responsibility for Financial Statements 

Management is responsible for the preparation of the CompanyGLYPH<213>s consolidated financial statements and all related information appearing in this Report. The statements and notes have been prepared in conformity with accounting principles generally accepted in the United States and include some amounts, which are estimates based upon currently available information and managementGLYPH<213>s judgment of current conditions and circumstances. The Company engaged Arthur Andersen LLP, independent public accountants, to examine the consoli- dated financial statements. Their report appears on this page. 

To provide reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition and that accounting records are reliable for preparing financial state- ments, management maintains a system of accounting and controls, including an internal audit program. The system of accounting and controls is improved and modified in response to changes in business conditions and operations and recom- mendations made by the independent public accountants and the internal auditors. 

The Board of Directors has an Audit Committee whose members are not employees of the Company. The Committee meets periodically with management, internal auditors and rep- resentatives of the CompanyGLYPH<213>s independent public accountants to review the CompanyGLYPH<213>s program of internal controls, audit plans and results and the recommendations of the internal and external auditors and managementGLYPH<213>s responses to those recommendations. 

## Report of Independent Public Accountants 

To the Shareholders and Board of Directors of Cummins Engine Company, Inc.: 

We have audited the accompanying consolidated statement of financial position of Cummins Engine Company, Inc., (an Indiana corporation) and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of earnings, cash flows and shareholdersGLYPH<213> investment for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the CompanyGLYPH<213>s manage- ment. Our responsibility is to express an opinion on these financial statements based on our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cummins Engine Company, Inc., and subsidiaries as of December 31, 2000 and 1999, and the results of their opera- tions and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with account- ing principles generally accepted in the United States. 

<img src='content_image/66513.jpg'>

