Global Customer Demand, Improved Cost Structure Drive Cummins' Strong First-Quarter Performance




    Power Generation and Distribution Results More Than Offset Impact of
Emissions Regulation Changes; Company Increases 2007 Profit Guidance

    COLUMBUS, IND., April 27 /CNW/ - Cummins Inc. (NYSE:  CMI) today announced
strong first quarter earnings, led by significant sales growth in almost every
market. The first-quarter performance demonstrated the benefits of the
Company's ongoing effort to lower its cost structure and to diversify its
business beyond the North American heavy-duty truck engine market.

    The heavy-duty truck market - still the Company's largest - declined, as
expected, due to lower truck sales resulting from new diesel emissions
standards. However, results from Cummins' other operations led the Company to
higher sales and net income for the quarter.

    For the quarter, the Company reported sales of $2.82 billion, up 5.2
percent from $2.68 billion during the same period in 2006. Net income of $143
million ($1.42 per diluted share) increased 5.9 percent from $135 million
($1.35 per diluted share), due to the Company's focus on strengthening its
balance sheet and lowering costs. All earnings per share amounts reflect the
two-for-one stock split distributed on April 9, 2007.

    Earnings before interest and taxes (EBIT) decreased 4.7 percent to $243
million during the first quarter. This reflects lower sales in the North
American heavy-duty truck market, investment in global growth opportunities
and costs associated with introducing 2007 emissions-compliant products.

    "Despite the predicted decline in the North American heavy-duty truck
market, we achieved outstanding results in the first quarter," said Tim Solso,
Cummins Chairman and Chief Executive Officer. "These results show our strategy
is working, and we expect that type of performance to continue the rest of
this year and beyond.

    "We did what we said we would do - continued to deliver superior products
and service to our customers, even in the face of significant changes to U.S.
emissions regulations. Despite our outstanding performance in the first
quarter, we don't intend to relax. We remain committed to making the 2007
product launch cycle the best in our history and we are focused on controlling
our costs and providing the best possible products and service."

    Based on the Company's first-quarter results and updated forecast for the
rest of the year, Cummins today also announced that it has increased its
full-year profit guidance to $6.00 - $6.50 a share, up from $5.50 - $5.75 a
share.

    Cummins Power Generation continued its strong performance by reporting
record sales and Segment EBIT during the quarter. The business saw a
significant increase in demand for its commercial generator sets and
alternators around the world - most notably in North America, India and the
Middle East. Consumer sales also improved and more growth is expected in
future quarters from sales of portable generator sets and auxiliary power
units for commercial trucks.

    The Company's Distribution business performed well during the quarter,
with Segment EBIT increasing 26 percent from the same period in 2006 to $39
million. The segment enjoyed strong gains for engine sales in Europe, for
generator sets in Europe and the South Pacific and for parts in Europe.
Additionally, income from the Company's distributor joint ventures nearly
doubled, driven in part by an increase in orders for power generation
equipment in North America.

    Sales to the North American heavy and medium-duty truck engine markets
fell due to the change in emissions standards. Despite the decrease, the
Company's ability to produce new emission-certified engines from the beginning
of the year resulted in market share gains with some customers, and an
improved cost structure allowed the heavy-duty business to remain profitable.
Additionally, the Company showed significant strength in international
on-highway engine markets as well as in global industrial markets during the
quarter.

    Capital spending for both the Company and its manufacturing joint
ventures is expected to increase significantly in 2007, with the majority
going to support growth in current products or expansion into new products.

    A few examples of current or planned capital spending programs:

    --  Additional fuel system assembly capacity in the U.S., Mexico and
China.

    --  Expansion of exhaust aftertreatment assembly in the U.S.

    --  Expanded turbocharger capacity in the U.S., China and India.

    --  Increased high-horsepower machining and assembly capacity in the
United Kingdom and India.

    --  New light-duty diesel engine manufacturing and assembly in the United
States and China.

    "Even as Cummins continues to focus on 2007, the Company has committed to
investing in profitable future growth opportunities around the world," Solso
said.

    First quarter details

    Engine Segment

    Sales of $1.76 billion were 3 percent lower than the same period in 2006,
while Segment EBIT declined by 28 percent to $128 million, or 7.3 percent of
sales. Global heavy-duty truck engines shipments decreased 45 percent, while
global medium-duty truck engine shipments decreased 7 percent. Shipments to
the global construction markets increased 25 percent, while oil and gas
shipments jumped 11 percent.

    Power Generation Segment

    Sales, Segment EBIT and return on sales reached all-time highs. Sales of
$675 million were a 26 percent increase from the same period in 2006, while
Segment EBIT rose 71 percent to $77 million, or 11.4 percent of sales.
Commercial generator sales rose 27 percent and alternator sales increased 43
percent, as both markets showed strength in almost all geographic areas.
Consumer sales improved by 7 percent, aided by the introduction of portable
generator sets.

    Distribution Segment

    Sales fell 2 percent to $309 million, due to changes in reporting for a
North American distributor joint venture. Excluding the reporting change,
sales rose 12 percent compared to the first quarter of 2006. Segment EBIT of
$39 million, or 12.6 percent of sales, increased 26 percent from the same
period in 2006.

    Components Segment

    Sales rose 18 percent to $657 million, while Segment EBIT declined 23
percent to $24 million, or 3.7 percent of sales. Significantly stronger
results in the Company's exhaust aftertreatment business were more than offset
by the expected decline in heavy-duty volumes in the Fuel Systems division and
higher material and new product costs in the Company's Turbo Technologies
division.

    Presentation of Non-GAAP Financial Information

    EBIT is a non-GAAP measure used in this release. EBIT is defined and
reconciled to what management believes to be the most comparable GAAP measure
in a schedule attached to this release. Cummins presents this information as
it believes it is useful to understanding the Company's operating performance,
and because EBIT is a measure used internally to assess the performance of the
operating units.

    Webcast information Cummins management will host a teleconference to
discuss these results today at 10 a.m. EDT. This teleconference will be
webcast and available on the Investor Relations section of the Cummins website
at www.cummins.com. Participants wishing to view the visuals available with
the audio are encouraged to sign-in a few minutes prior to the start of the
teleconference.

    About Cummins

    Cummins Inc., a global power leader, is a corporation of complementary
business units that design, manufacture, distribute and service engines and
related technologies, including fuel systems, controls, air handling,
filtration, emission solutions and electrical power generation systems.
Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more
than 160 countries through its network of 550 Company-owned and independent
distributor facilities and more than 5,000 dealer locations. Cummins reported
net income of $715 million on sales of $11.4 billion in 2006. Press releases
can be found on the Web at www.cummins.com.

    Information provided in this release that is not purely historical are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding the company's
expectations, hopes, beliefs and intentions on strategies regarding the
future. It is important to note that the company's actual future results could
differ materially from those projected in such forward-looking statements
because of a number of factors, including, but not limited to, general
economic, business and financing conditions, labor relations, governmental
action, competitor pricing activity, expense volatility and other risks
detailed from time to time in Cummins Securities and Exchange Commission
filings.

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                               (Unaudited) (a)

                                                  Three months ended
                                            ------------------------------
                                            April 1, April 2, December 31,
                                              2007     2006       2006
                                            -------- -------- ------------
                                                       Millions
                                              (except per share amounts)
    Net sales                                $2,817   $2,678       $3,033
    Cost of sales                             2,265    2,112        2,397
                                            -------- -------- ------------
    Gross margin                                552      566          636

    Operating expenses and income
      Selling and administrative expenses       283      268          300
      Research and engineering expenses          80       82           78
      Investee equity, royalty and other
       income                                    36       31           35
      Other operating (expenses) income,
       net                                       (2 )      1            3
                                            -------- -------- ------------

    Operating earnings                          223      248          296

    Interest income                              11        9           14
    Interest expense                             16       27           20
    Other income (expenses), net                  9       (2)          (7)
                                            -------- -------- ------------
    Earnings before income taxes and
     minority interests                         227      228          283

    Provision for income taxes                   75       85           80
    Minority interests in earnings of
     consolidated subsidiaries                    9        8           14
                                            -------- -------- ------------
    Net earnings                             $  143   $  135       $  189
                                            -------- -------- ------------

    Earnings per common share (b)
      Basic                                  $ 1.43   $ 1.52       $ 1.89
      Diluted                                $ 1.42   $ 1.35       $ 1.87

    Cash dividends declared per share        $ 0.18   $ 0.15       $ 0.18

    (a) Prepared on an unaudited basis in accordance with accounting
     principles generally accepted in the United States of America.
    (b) All per share amounts reflect the two-for-one stock split
     distributed April 9, 2007.

    Certain reclassifications have been made to 2006 amounts to conform to
     the 2007 presentation.
    

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Unaudited) (a)

                                                     April 1, December 31,
                                                       2007       2006
                                                     -------- ------------
                                                           Millions
                                                      (except par value)
    ASSETS
    Current assets
      Cash and cash equivalents                       $  521       $  840
      Marketable securities                               69           95
      Receivables, net                                 1,917        1,767
      Inventories                                      1,563        1,393
      Other current assets                               393          393
                                                     -------- ------------
       Total current assets                            4,463        4,488
    Long-term assets
      Property, plant and equipment, net               1,541        1,574
      Investments in and advances to equity
       investees                                         378          345
      Goodwill                                           369          356
      Other intangible assets, net                       141          128
      Other assets                                       556          574
                                                     -------- ------------
       Total assets                                   $7,448       $7,465
                                                     -------- ------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
      Short-term borrowings                           $   82       $  164
      Accounts payable                                 1,230        1,104
      Other accrued expenses                             973        1,131
                                                     -------- ------------
       Total current liabilities                       2,285        2,399
    Long-term liabilities
      Long-term debt                                     613          647
      Other liabilities                                1,360        1,363
                                                     -------- ------------
       Total liabilities                               4,258        4,409
                                                     -------- ------------

    Minority interests                                   253          254
                                                     -------- ------------
    Shareholders' equity (b)
      Common stock, $2.50 par value, 150 shares
       authorized, 110.2 and 110.0 shares issued         275          137
      Additional paid-in capital                       1,368        1,500
      Retained earnings                                2,134        2,009
      Treasury stock, at cost, 5.9 and 5.8 shares       (222)        (212)
      Common stock held in trust for employee
       benefit plans, 3.8 and 3.8 shares                 (92)         (92)
      Unearned compensation                              (13)         (14)
      Accumulated other comprehensive loss              (513)        (526)
                                                     -------- ------------
       Total shareholders' equity                      2,937        2,802
                                                     -------- ------------
    Total liabilities, minority interests and
     shareholders' equity                             $7,448       $7,465
                                                     -------- ------------

    (a) Prepared on an unaudited basis in accordance with accounting
     principles generally accepted in the United States of America.
    (b) All share amounts reflect the two-for-one stock split distributed
     April 9, 2007.
    

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (Unaudited) (a)

                                                        Three months ended
                                                        ------------------
                                                        April 1,  April 2,
                                                          2007      2006
                                                        --------- --------
                                                             Millions
    Net cash (used in) provided by operating activities    $(113)    $ 18
                                                        --------- --------

    Cash flows from investing activities
     Capital expenditures                                    (48)     (52)
     Investments in internal use software                    (13)     (12)
     Proceeds from the disposal of property, plant and
      equipment                                                2       22
     Investments in and advances to equity investees         (17)      --
     Acquisition of businesses, net of cash acquired         (20)      --
     Investments in marketable securities--acquisitions      (68)     (38)
     Investments in marketable securities--liquidations       94       42
     Other, net                                               (3)      --
                                                        --------- --------
    Net cash used in investing activities                    (73)     (38)
                                                        --------- --------
    Cash flows from financing activities
     Proceeds from borrowings                                  4       19
     Payments on borrowings and capital lease
      obligations                                           (101)     (64)
     Dividend payments on common stock                       (19)     (14)
     Proceeds from issuing common stock                        2        4
     Repurchases of common stock                             (13)     (36)
     Other, net                                               (8)       7
                                                        --------- --------
    Net cash used in financing activities                   (135)     (84)
                                                        --------- --------
    Effect of exchange rate changes on cash and cash
     equivalents                                               2        1
                                                        --------- --------
    Net decrease in cash and cash equivalents               (319)    (103)
    Cash and cash equivalents at beginning of year           840      779
                                                        --------- --------
    Cash and cash equivalents at end of period             $ 521     $676
                                                        --------- --------

    (a) Prepared on an unaudited basis in accordance with accounting
     principles generally accepted in the United States of America.
    

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
                             SEGMENT INFORMATION
                                 (Unaudited)

                                                            Non-
                           Power                           segment
                 Engine Generation Components Distribution items(1) Total
                 ---------------------------------------------------------
                                         Millions
    Three months
     ended April
     1, 2007
    External
     sales       $1,522      $531      $455         $309    $  --  $2,817
    Intersegment
     sales          243       144       202           --     (589)     --
                 -------     ----- --------- ------------ -------- -------
       Net sales  1,765       675       657          309     (589)  2,817
    Investee
     equity,
     royalty and
     other income    17         3        (1)          17       --      36
    Interest
     income           8         2         1           --       --      11
    Segment EBIT    128        77        24           39      (25)    243

    Three months
     ended April
     2, 2006
    External
     sales       $1,599      $411      $355         $313    $  --  $2,678
    Intersegment
     sales          222       125       200            4     (551)     --
                 -------     ----- --------- ------------ -------- -------
       Net sales  1,821       536       555          317     (551)  2,678
    Investee
     equity,
     royalty and
     other income    17         3         2            9       --      31
    Interest
     income           7         1        --            1       --       9
    Segment EBIT    179        45        31           31      (31)    255

    Three months
     ended
     December 31,
     2006
    External
     sales       $1,742      $515      $394         $382    $  --  $3,033
    Intersegment
     sales          210       143       205            4     (562)     --
                 -------     ----- --------- ------------ -------- -------
       Net sales  1,952       658       599          386     (562)  3,033
    Investee
     equity,
     royalty and
     other income    16         2         1           16       --      35
    Interest
     income          11         2         1           --       --      14
    Segment EBIT    181        62        23           39       (2)    303

    (1) Includes intercompany eliminations and unallocated corporate
     expenses.
    

    
    A reconciliation of our segment information to the corresponding
     amounts in the Consolidated Financial Statements is shown in the
     table below:

                                                  Three Months Ended
                                            ------------------------------
                                            April 1, April 2, December 31,
                                              2007     2006       2006
                                            -------- -------- ------------
                                                       Millions
    Segment EBIT                               $243     $255         $303
    Less:
      Interest expense                           16       27           20
                                            -------- -------- ------------
    Earnings before income taxes and
     minority interests                        $227     $228         $283
                                            -------- -------- ------------
    

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
                   FINANCIAL MEASURES THAT SUPPLEMENT GAAP
                                 (Unaudited)

    Earnings before interest, taxes and minority interests (EBIT)

    We define EBIT as earnings before interest expense, provision for
     income taxes and minority interests in earnings of consolidated
     subsidiaries. We use EBIT to assess and measure the performance of
     our operating segments and also as a component in measuring our
     variable compensation programs. Below is a reconciliation of EBIT, a
     non-GAAP financial measure, to our consolidated net earnings, for
     each of the applicable periods:

                                                 Three Months Ended
                                           ------------------------------
                                           April 1, April 2, December 31,
                                             2007     2006       2006
                                           -------- -------- ------------
                                                      Millions
    Earnings before interest expense,
     income taxes and minority interests      $243     $255         $303

    EBIT as a percentage of net sales          8.6 %    9.5 %       10.0 %

    Less:
      Interest expense                          16       27           20
      Provision for income taxes                75       85           80
      Minority interests in earnings of
       consolidated subsidiaries                 9        8           14
                                           -------- -------- ------------
    Net earnings                              $143     $135         $189
                                           -------- -------- ------------

    Net earnings as a percentage of net
     sales                                     5.1 %    5.0 %        6.2 %

    We believe EBIT is a useful measure of our operating performance for
     the periods presented as it illustrates our operating performance
     without regard to financing methods, capital structure or income
     taxes. This measure is not in accordance with, or an alternative for,
     accounting principles generally accepted in the United States of
     America (GAAP) and may not be consistent with measures used by other
     companies. It should be considered supplemental data.
    

    
    Cash from operations excluding pension contributions

                                                For the three months ended
                                                --------------------------
                                                  April 1,      April 2,
                                                    2007          2006
                                                ------------- ------------
    Cash (used in) provided by operations              $(113)         $18
    Add back: pension contributions                       61           41
                                                ------------- ------------
    Cash (used in) provided by operations
     excluding pension contributions                   $ (52)         $59
                                                ------------- ------------

    We believe cash (used in) provided by operations excluding pension
     contributions is a useful measure of our operating performance for
     the periods presented as it illustrates our operating performance
     without regard to funding decisions. This measure is not in
     accordance with, or an alternative for, GAAP and may not be
     consistent with measures used by other companies. It should be
     considered supplemental data.
    

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
                            SELECTED FOOTNOTE DATA
                                 (Unaudited)

    NOTE 1. EARNINGS PER SHARE

    The following is a reconciliation of net earnings and weighted-average
     common shares outstanding for purposes of calculating basic and
     diluted net earnings per share:

                                                  Three months ended
                                            ------------------------------
                                            April 1, April 2, December 31,
                                              2007     2006       2006
                                            -------- -------- ------------
                                                       Millions
                                              (except per share amounts)
    Net earnings for basic EPS                $ 143    $ 135        $ 189
      Interest on junior convertible
       subordinated debentures, net of tax       --        3           --
                                            -------- -------- ------------
    Net earnings for diluted EPS              $ 143    $ 138        $ 189
                                            -------- -------- ------------
    Weighted-average common shares
     outstanding:
      Basic                                   100.0     88.7        100.2
      Dilutive effect of stock compensation
       awards                                   0.5      0.7          0.9
      Dilutive effect of junior convertible
       subordinated debentures                   --     12.6           --
                                            -------- -------- ------------
      Diluted                                 100.5    102.0        101.1
                                            -------- -------- ------------
    Earnings per common share:
      Basic                                   $1.43    $1.52        $1.89
      Diluted                                 $1.42    $1.35        $1.87

    The Board of Directors authorized a two-for-one split of Cummins stock
     on March 8, 2007, which was distributed on April 9, 2007, to
     shareholders of record as of March 26, 2007. All share and per share
     amounts have been adjusted to reflect the two-for-one stock split.
    

    
    NOTE 2. INVESTEE EQUITY, ROYALTY AND OTHER INCOME

    Investee equity, royalty and other income included in our Condensed
     Consolidated Statements of Earnings for the interim reporting periods
     was as follows:

                                                  Three months ended
                                            ------------------------------
                                            April 1, April 2, December 31,
                                              2007     2006       2006
                                            -------- -------- ------------
                                                       Millions
    Dongfeng Cummins Engine Company, Ltd        $ 6      $ 5          $ 3
    North American distributors                  15        9           14
    Cummins Mercruiser                            3        1            2
    Chongqing Cummins                             5        3            2
    Tata Cummins                                  2        3            3
    Fleetguard Shanghai                           1        1            1
    All others                                    1        4            5
                                            -------- -------- ------------
    Cummins share of net earnings                33       26           30
    Royalty and other income                      3        5            5
                                            -------- -------- ------------
    Investee equity, royalty and other
     income                                     $36      $31          $35
                                            -------- -------- ------------
    

    
    NOTE 3. PROVISION FOR INCOME TAXES

    Our tax rates are generally less than the 35 percent U.S. income tax
     rate primarily because of lower taxes on foreign earnings, export tax
     benefits and research tax credits.

    Our effective tax rate for the three months ended April 1, 2007, was
     33.0 percent. Our effective tax rate for the three months ended April
     2, 2006, was 37.3 percent. The effective tax rate for the three
     months ended April 2, 2006, was higher than 35 percent due to a tax
     bill passed in Indiana during March 2006 that has the effect of
     lowering our effective tax rate in Indiana over time. As a result,
     our first quarter 2006 tax provision includes a $12 million charge,
     or $0.12 per share, to adjust deferred tax assets to their ultimate
     expected realizable value based upon this action.

    NOTE 4. DEPRECIATION AND AMORTIZATION

    Depreciation and amortization expense included in operating activities
     of the Condensed Consolidated Statements of Cash Flows for the three
     months ended April 1, 2007 and April 2, 2006, was $68 million and $74
     million, respectively.

    NOTE 5. SHIPPING AND HANDLING COSTS

    Our shipping and handling costs are expensed as incurred. Those
     shipping and handling costs associated with operations of our
     inventory distribution centers and warehouse facilities were
     previously classified as "Selling and administrative expenses" in our
     Condensed Consolidated Statements of Earnings. In accordance with
     Emerging Issues Task Force (EITF) Issue No. 00-10 "Accounting for
     Shipping and Handling Fees and Costs," we previously disclosed the
     amount of shipping and handling costs included as "Selling and
     administrative expenses" in the notes to our consolidated financial
     statements. Beginning January 1, 2007, we revised our accounting
     policy and all shipping and handling costs are now classified as
     "Cost of sales." This presentation is more consistent with current
     industry practice. For purposes of comparability, the $33 million
     previously classified as "Selling and administrative expenses" in
     2006 has been adjusted retrospectively to apply the new method. This
     change had no impact on operating earnings, EBIT, net earnings, or
     earnings per share.
    

    
                  CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
               SUPPLEMENTAL STATEMENTS OF EARNINGS INFORMATION
                                 (Unaudited)

    Shipping and handling costs associated with operations of our
     inventory distribution centers and warehouse facilities were
     previously classified as "Selling and administrative expenses" in our
     Consolidated Statements of Earnings. In accordance with Emerging
     Issues Task Force (EITF) Issue No. 00-10 "Accounting for Shipping and
     Handling Fees and Costs," we previously disclosed the amount of
     shipping and handling costs included as "Selling and administrative
     expenses" in the notes to our consolidated financial statements.
     Beginning January 1, 2007, we revised our accounting policy and all
     shipping and handling costs are classified as "Cost of sales." This
     presentation is more consistent with current industry practice. For
     purposes of comparability, amounts previously classified as "Selling
     and administrative expenses" in previous periods have been adjusted
     retrospectively to apply the new method. The Consolidated Statements
     of Earnings for each of the quarterly periods in 2006 and for the
     2006 and 2005 annual periods with all shipping and handling costs
     included in "Cost of sales" follows:

                                                           For the years
                           For the three months ended           ended
                        --------------------------------- ----------------
                        April 2, July 2, Oct. 1, Dec. 31,   December 31,
                          2006    2006    2006     2006     2006    2005
                        -------- ------- ------- -------- -------- -------
                                             Millions
    Net sales            $2,678  $2,842  $2,809   $3,033  $11,362  $9,918
    Cost of sales         2,112   2,196   2,192    2,397    8,897   7,874
                        -------- ------- ------- -------- -------- -------

    Gross margin            566     646     617      636    2,465   2,044

    Operating expenses
     and income
      Selling and
       administrative
       expenses             268     294     291      300    1,153   1,003
      Research and
       engineering
       expenses              82      80      81       78      321     278
      Investee equity,
       royalty and other
       income                31      37      37       35      140     131
      Other operating
       income
       (expenses), net        1      --      (4)       3       --      --
                        -------- ------- ------- -------- -------- -------

    Operating earnings      248     309     278      296    1,131     894

    Interest income           9      10      14       14       47      24
    Interest expense         27      26      23       20       96     109
    Other (expenses)
     income, net             (2)      6       4       (7)       1     (11)
                        -------- ------- ------- -------- -------- -------

    Earnings before
     income taxes and
     minority interests     228     299     273      283    1,083     798

    Provision for income
     taxes                   85      67      92       80      324     216
    Minority interests
     in earnings of
     consolidated
     subsidiaries             8      12      10       14       44      32
                        -------- ------- ------- -------- -------- -------

    Net earnings         $  135  $  220  $  171   $  189  $   715  $  550
                        -------- ------- ------- -------- -------- -------

    Note:
    Amounts reclassified
     from "Selling and
     administrative
     expenses" to "Cost
     of sales"           $   33  $   26  $   37   $   34  $   130  $  142
    

    

    ----------------------------------------------------------------------
    Sales
     $Millions                       Q1      Q2      Q3      Q4     YTD
                                  ----------------------------------------

     2007
       Engine Business
                   Heavy-Duty
                    Truck             424                             424
                   Medium Duty
                    Truck+Bus         206                             206
                   Light Duty
                    Auto+RV           288                             288
                   Industrial         617                             617
                   Stationary
                    Power             230                             230
                                  ----------------------------------------
                   TOTAL ENGINE
                    BUSINESS        1,765       0       0       0   1,765
       Power Generation               675                             675
       Components                     657                             657
       Distributors                   309                             309
       Eliminations                  (589)                           (589)
                                  ----------------------------------------
                   TOTAL            2,817       0       0       0   2,817
                                  ----------------------------------------


     2006
       Engine Business
                   Heavy-Duty
                    Truck             608     618     632     640   2,498
                   Medium Duty
                    Truck+Bus         215     247     253     256     971
                   Light Duty
                    Auto+RV           331     341     267     322   1,261
                   Industrial         481     516     507     559   2,063
                   Stationary
                    Power             186     174     183     175     718
                                  ----------------------------------------
                   TOTAL ENGINE
                    BUSINESS        1,821   1,896   1,842   1,952   7,511
       Power Generation               536     598     624     658   2,416
       Components                     555     563     564     599   2,281
       Distributors                   317     336     346     386   1,385
       Eliminations                  (551)   (551)   (567)   (562) (2,231)
                                  ----------------------------------------
                   TOTAL            2,678   2,842   2,809   3,033  11,362
                                  ----------------------------------------

    ----------------------------------------------------------------------

    ----------------------------------------------------------------------

    Engine Shipments
     Units                           Q1      Q2      Q3      Q4     YTD
                                  ----------------------------------------

     2007
                   Midrange       107,200                         107,200
                   Heavy-duty      19,000                          19,000
                   High Horsepower  4,300                           4,300
                                  ----------------------------------------
     TOTAL                        130,500       0       0       0 130,500
                                  ----------------------------------------

     2006
                   Midrange       114,500 121,800 104,800 118,800 459,900
                   Heavy-duty      30,100  31,400  31,000  30,900 123,400
                   High Horsepower  3,700   4,000   4,100   4,500  16,300
                                  ----------------------------------------
     TOTAL                        148,300 157,200 139,900 154,200 599,600
                                  ----------------------------------------

    ----------------------------------------------------------------------
    




For further information:

For further information: Cummins Inc. Mark Land, 317-610-2456 Director
of Public Relations Mobile: 317-903-6999 mark.d.land@cummins.com

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CUMMINS INC.

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