8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC  20549
 

FORM 8-K
 

CURRENT REPORT
 

PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934
 

Date of Report: February 4, 2009

  CUMMINS INC.
(Exact name of registrant as specified in its charter)
 

Indiana
(State or other Jurisdiction of
Incorporation) 1-4949
(Commission File Number) 35-0257090
(I.R.S. Employer Identification
 No.)

500 Jackson Street
P. O. Box 3005
Columbus, IN  47202-3005
(Principal Executive Office)  (Zip Code)

Registrant's telephone number, including area code:  (812) 377-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Item 7.01.  Regulation FD Disclosure

The following information is furnished pursuant to Item 2.02, "Results of Operations

and Financial Condition" and Item 7.01, "Regulation FD Disclosure."
 

On February 3, 2009, Cummins Inc. (“Cummins,” “the Company,” “our,” or “we”)  issued the attached press release reporting its financial results for the fourth quarter of 2008.  A copy of Cummins’ press release is attached hereto as Exhibit 99 and hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

(d) The following exhibit is furnished herewith:
 

99-Press Release dated February 3, 2009

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 4, 2009
 

CUMMINS INC.

 /s/ Marsha L. Hunt
______________________________

Marsha L. Hunt
Vice President - Corporate Controller
(Principal Accounting Officer)

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

	Three months ended
	December 31,			September 28,			December 31,
	2008			2008			2007
	in millions (except per share amounts)
NET SALES	$	3,288		$	3,693		$	3,516
Cost of sales	2,672			2,873			2,834
GROSS MARGIN	616			820			682
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses	350			388			359
Research, development and engineering expenses	102			113			93
Equity, royalty and interest income from investees (Note 1)	51			66			59
Restructuring charges (Note 2)	37			—			—
Other operating (expense) income, net	(3		)	(2		)	13
OPERATING INCOME	175			383			302
Interest income	4			4			9
Interest expense	9			10			14
Other (expense) income, net (Note 3)	(50		)	(7		)	13
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS	120			370			310
Income tax expense (Note 4)	15			123			97
Minority interests in income of consolidated subsidiaries	16			18			15
NET INCOME	$	89		$	229		$	198
EARNINGS PER COMMON SHARE
Basic	$	0.46		$	1.18		$	1.01
Diluted	$	0.45		$	1.17		$	1.00
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		194.7			194.9			195.7
Diluted		196.6			196.5			197.5
Cash dividends declared per share	$	0.175		$	0.175		$	0.125

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

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

	For the years ended
	December 31,			December 31,
	2008			2007
	in millions (except per share amounts)
NET SALES	$	14,342		$	13,048
Cost of sales	11,320			10,492
GROSS MARGIN	3,022			2,556
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses	1,459			1,296
Research, development and engineering expenses	422			329
Equity, royalty and interest income from investees (Note 1)	253			205
Restructuring charges (Note 2)	37			—
Other operating (expense) income, net	(12		)	22
OPERATING INCOME	1,345			1,158
Interest income	18			36
Interest expense	42			58
Other (expense) income, net (Note 3)	(70		)	33
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS	1,251			1,169
Income tax expense (Note 4)	387			381
Minority interests in income of consolidated subsidiaries	63			49
NET INCOME	$	801		$	739
EARNINGS PER COMMON SHARE
Basic	$	4.11		$	3.72
Diluted	$	4.08		$	3.70
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		195.0			198.4
Diluted		196.5			199.9
Cash dividends declared per share	$	0.60		$	0.43

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

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (a)

	December 31,				December 31,
	2008				2007
	in millions (except par value)
ASSETS
Current assets
Cash and cash equivalents		$	426			$	577
Marketable securities		77				120
Accounts and notes receivable, net		1,782				1,998
Inventories		1,783				1,692
Other current assets		639				428
Total current assets		4,707				4,815
Long-term assets
Property, plant and equipment, net		1,841				1,645
Investments and advances related to equity method investees		588				514
Goodwill and other intangible assets, net		585				538
Other assets		770				683
Total assets		$	8,491			$	8,195
LIABILITIES
Current liabilities
Short-term borrowings		$	69			$	119
Accounts payable (principally trade)		1,009				1,263
Accrued expenses		1,486				1,329
Total current liabilities		2,564				2,711
Long-term liabilities
Long-term debt		629				555
Other liabilities		1,771				1,227
Total liabilities		4,964				4,493
MINORITY INTERESTS		250				293
SHAREHOLDERS’ EQUITY
Common stock, $2.50 par value, 500 and 300 shares authorized, 221.7 and 220.4 shares issued		554				551
Additional paid-in capital		1,240				1,168
Retained earnings		3,334				2,660
Treasury stock, at cost, 20.4 and 18.2 shares		(715		)		(593		)
Common stock held by employee benefits trust, at cost, 5.1 and 6.5 shares		(61		)		(79		)
Unearned compensation		(5		)		(11		)
Accumulated other comprehensive loss		(1,070		)		(287		)
Total shareholders’ equity		3,277				3,409
Total liabilities, minority interests and shareholders’ equity		$	8,491			$	8,195

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

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (a)
 

	For the years ended
	December 31,			December 31,
	2008			2007
	in millions
NET CASH PROVIDED BY OPERATING ACTIVITIES (Note 5)	$	987		$	810
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(543		)	(353		)
Investments in internal use software	(82		)	(67		)
Investments in and advances to equity investees	(89		)	(66		)
Acquisition of businesses, net of cash acquired	(142		)	(20		)
Proceeds from the sale of an equity investment	64			35
Investments in marketable securities—acquisitions	(390		)	(405		)
Investments in marketable securities—liquidations	409			395
Purchases of other investments	(62		)	(57		)
Other, net	(13		)	23
Net cash used in investing activities	(848		)	(515		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings	76			15
Payments on borrowings and capital lease obligations	(152		)	(144		)
Dividend payments on common stock	(122		)	(89		)
Proceeds from sale of common stock held by employee benefit trust	63			14
Repurchases of common stock	(128		)	(335		)
Other, net	26			(37		)
Net cash used in financing activities	(237		)	(576		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(53		)	18
Net decrease in cash and cash equivalents	(151		)	(263		)
Cash and cash equivalents at beginning of year	577			840
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	426		$	577

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

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

	Engine		Power Generation		Components		Distribution		Non-segment items (1)			Total
	in millions
Three months ended December 31, 2008
External sales	$	1,590	$	675	$	468	$	555	$	—		$	3,288
Intersegment sales		346		212		208		2		(768	)		—
Total sales		1,936		887		676		557		(768	)		3,288
Depreciation and amortization(2)	47		10		16		8		―			81
Research, development and engineering expense	71		10		21		―		―			102
Equity, royalty and interest income from investees	8		6		4		33		—			51
Restructuring charges	―		―		―		―		37			37
Interest income	3		―		―		1		—			4
Segment EBIT	25		75		2		64		(37		)	129
Three months ended September 28, 2008
External sales	$	1,927	$	653	$	535	$	578	$	—		$	3,693
Intersegment sales	352		235		266		3		(856		)	—
Total sales	2,279		888		801		581		(856		)	3,693
Depreciation and amortization(2)	43		9		16		6		—			74
Research, development and engineering expense	75		11		27		—		—			113
Equity, royalty and interest income from investees	26		6		3		31		—			66
Interest income	2		1		1		—		—			4
Segment EBIT	160		108		61		61		(10		)	380
Three months ended December 31, 2007
External sales	$	1,862	$	645	$	542	$	467	$	—		$	3,516
Intersegment sales		293		195		235		1		(724	)		—
Total sales		2,155		840		777		468		(724	)		3,516
Depreciation and amortization(2)	44		11		16		3		―			74
Research, development and engineering expense	63		9		21		―		―			93
Equity, royalty and interest income from investees	26		5		3		25		—			59
Interest income	6		2		1		—		—			9
Segment EBIT	120		86		47		56		15			324
For the year ended December 31, 2008
External sales	$	7,432	$	2,601	$	2,154	$	2,155	$	—		$	14,342
Intersegment sales		1,378		899		998		9		(3,284	)		—
Total sales		8,810		3,500		3,152		2,164		(3,284	)		14,342
Depreciation and amortization(2)	180		41		65		25		―			311
Research, development and engineering expense	286		41		95		―		―			422
Equity, royalty and interest income from investees	99		23		14		117		—			253
Restructuring charges	―		―		―		―		37			37
Interest income	10		3		3		2		—			18
Segment EBIT	600		376		177		242		(102		)	1,293
For the year ended December 31, 2007
External sales	$	7,129	$	2,375	$	2,007	$	1,537	$	—		$	13,048
Intersegment sales		1,053		685		925		3		(2,666	)		—
Total sales		8,182		3,060		2,932		1,540		(2,666	)		13,048
Depreciation and amortization(2)	176		42		59		11		―			288
Research, development and engineering expense	222		34		73		―		―			329
Equity, royalty and interest income from investees	92		17		4		92		—			205
Interest income	26		6		3		1		—			36
Segment EBIT	589		334		153		187		(36		)	1,227

(1) Includes intercompany eliminations and unallocated corporate expenses. For the three months ended and the year ended December 31, 2008, Non-segment includes a $36 million decrease in cash surrender value in corporate owned life insurance (COLI).

 (2) Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount that is included in the Condensed Consolidated Statements of Income as Interest expense.

CUMMINS INC. AND SUBSIDIARIES

RECONCILIATION OF SEGMENT INFORMATION

(Unaudited)

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

	Three months ended							For the years ended
	December 31,			September 28,		December 31,		December 31,		December 31,
	2008			2008		2007		2008		2007
	in millions
Segment EBIT	$		129	$	380	$	324	$	1,293	$	1,227
Less:
Interest expense	9			10		14		42		58
Income before income taxes and minority interests	$	120		$	370	$	310	$	1,251	$	1,169

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)
 

 Earnings before interest, taxes and minority interests (EBIT)

We define EBIT as earnings before interest expense, income tax expense and minority interests in income 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 income, for each of the applicable periods:

	Three Months Ended									For the years ended
	December 31,			September 28,			December 31,			December 31,			December 31,
	2008			2008			2007			2008			2007
	in millions
Earnings before interest, income taxes and minority interests	$	129		$	380		$	324		$	1,293		$	1,227
EBIT as a percentage of net sales	3.9		%	10.3		%	9.2		%	9.0		%	9.4		%
Less:
Interest expense	9			10			14			42			58
Income tax expense	15			123			97			387			381
Minority interests in income of consolidated subsidiaries	16			18			15			63			49
Net income	$	89		$	229		$	198		$	801		$	739
Net income as a percentage of net sales	2.7		%	6.2		%	5.6		%	5.6		%	5.7		%

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.

 

CUMMINS INC. AND SUBSIDIARIES

SELECTED FOOTNOTE DATA

(Unaudited)

NOTE 1.  EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Income was as follows:

		Three months ended								For the years ended
		December 31,			September 28,			December 31,		December 31,		December 31,
		2008			2008			2007		2008		2007
	in millions
North American distributors		$	28		$	26		$	24	$	100	$	83
Dongfeng Cummins Engine Company, Ltd.		5			16			12		55		41
Chongqing Cummins Engine Company, Ltd.		7			9			7		30		22
Shanghai Fleetguard Filter Co. Ltd.		1			2			2		8		6
Tata Cummins Ltd.		―			―			4		7		13
Cummins MerCruiser Diesel Marine LLC		(2		)	(1		)	2		3		11
All others		6			9			4		28		16
Cummins share of net income		45			61			55		231		192
Royalty and interest income		6			5			4		22		13
Equity, royalty and interest income from investees		$	51		$	66		$	59	$	253	$	205

NOTE 2.  RESTRUCTURING CHARGES

We have executed restructuring actions primarily in the form of voluntary and involuntary separation programs in the fourth quarter of 2008. These actions were in response to the continued deterioration we saw in our U.S. businesses and most key markets around the world in the second half of 2008, as well as a reduction in orders in most U.S. and global markets for 2009.  We reduced our worldwide professional workforce by approximately 650 employees. We offered a voluntary retirement package to certain active professional employees in the United States based on a clearly defined set of criteria. We also took involuntary actions which included certain hourly employees. The compensation packages contained salary and continuation of benefits, including health care, life insurance and outplacement services. The voluntary retirement package was accepted by approximately 150 employees. The remaining reductions of approximately 500 employees were involuntary. The expenses recorded during the year ended December 31, 2008 included severance costs related to both voluntary and involuntary terminations. During 2008, we incurred total pretax expenses related to the restructuring initiative of approximately $37 million. 

Employee termination and severance costs were recorded based on approved plans developed by the businesses and corporate management which specified positions to be eliminated, benefits to be paid under existing severance plans or statutory requirements and the expected timetable for completion of the plan.  Estimates of restructuring were made based on information available at the time charges were recorded.  Due to the inherent uncertainty involved, actual amounts paid for such activities may differ from amounts initially recorded and we may need to revise previous estimates.

CUMMINS INC. AND SUBSIDIARIES

SELECTED FOOTNOTE DATA

(Unaudited)

NOTE 3.  OTHER (EXPENSE) INCOME

Other (expense) income included the following:

		Three months ended											For the years ended
		December 31,				September 28,				December 31,			December 31,			December 31,
		2008				2008				2007			2008			2007
	in millions
Other (expense) income:
Change in cash surrender value of corporate owned life insurance		$	(36		)	$	―			$	―		$	(36	)	$		―
Foreign currency (losses) gains		(23			)	(10			)	12			(46		)	28
Other, net		9				3				1			12			5
Total other (expense) income, net		$		(50	)	$		(7	)	$		13	$	(70	)	$	33

NOTE 4.  INCOME TAXES

Our effective tax rate in the fourth quarter of 2008 was 12.5 percent compared to 31.3 percent for 2007.  The decrease is primarily due to greater foreign earnings in 2008, which are subject to lower tax rates. The fourth quarter effective tax rate also includes a $10 million (0.8 percent) reduction due to the legislative reinstatement of the U.S. research tax credit. The full-year 2008 effective tax rate was 30.9 percent and we expect our full-year 2009 effective tax rate to be sustained at approximately 31 percent.

NOTE 5.  DEPRECIATION AND AMORTIZATION

Depreciation and amortization expense included in operating activities of the Condensed Consolidated Statements of Cash Flows for the years ended December 31, 2008 and 2007 was $314 million and $290 million, respectively.

EX-99

Contact:

Mark Land – Director of Public Relations

(317) 610-2456

mark.d.land@cummins.com

For Immediate Release

February 3, 2009

Cummins reports fifth consecutive year of record sales and earnings, despite weaker demand in the fourth quarter

Company expects to earn solid profit in 2009 despite forecasted 20 percent drop in sales

COLUMBUS, IN – Cummins Inc. (NYSE: CMI) today reported its fifth consecutive year of record sales and profits, despite significant global economic challenges that negatively affected fourth quarter performance.

For the year, sales increased 10 percent to $14.34 billion, from $13.05 billion in 2007. Net income rose 8 percent to $801 million, or $4.08 per share, compared to $739 million or $3.70 per share the previous year.  Earnings Before Interest and Taxes (EBIT) were $1.29 billion, or 9.0 percent of sales, compared to $1.23 billion, or 9.4 percent of sales in 2007.

Net income included a $37 million pre-tax charge ($0.13 per share) to cover the costs associated with job reductions in the fourth quarter that included reducing its professional workforce by nearly 650 people. Excluding this charge, EBIT was $1.33 billion, or 9.3 percent of sales.

As the Company publicly stated in mid-December when it revised its sales and EBIT guidance downward for 2008, market conditions around the world began to deteriorate rapidly and sharply in the fourth quarter as the global recession continued to spread.

Fourth quarter sales fell 6 percent to $3.29 billion compared to $3.52 billion during the same period in 2007. Net income dropped to $89 million or $0.45 a share, from $198 million, or $1.00 a share a year ago, while EBIT decreased to $129 million, or 3.9 percent of sales, from $324 million, or 9.2 percent of sales last year.  Excluding the restructuring charge in this quarter, EBIT was $166 million, or 5.0 percent of sales.

Sales declines in the Company’s Engine and Components segments, driven by sharp demand drops in the global truck and construction markets, more than offset gains in Power Generation and Distribution. All four segments, however, experienced weakening demand during the course of the quarter. The Company’s financial performance in the quarter also was negatively affected by lower joint venture income and the impact of a strengthening U.S. dollar.

“Given our record-setting performance during the first nine months of the year, the rapid drop in demand in the fourth quarter as a result of the global recession was a major disappointment,” said Cummins Chairman and Chief Executive Officer Tim Solso. “At the same time, we moved quickly to lower our costs and tightly manage our capital spending, and already have taken further action in early 2009.”

Based on its latest market forecast and the expectation the global economy will not improve in 2009, Cummins today is providing sales and EBIT guidance that is below the Company’s 2008 performance. Cummins expects sales in 2009 to be approximately 20 percent lower than 2008, and to earn an EBIT margin of 6.5 percent of sales, excluding restructuring costs associated with the actions announced in the first quarter of 2009.

Sales are forecast to drop across all business segments, with the largest decline expected to come from the Components and Engine segments.  All business segments, however, are expected to be profitable in 2009 and the Company will continue to aggressively reduce costs while investing in key growth opportunities.

In January, Cummins announced that it will reduce its worldwide professional workforce by at least an additional 800 people by March 1 and freeze pay for most salaried workers. In addition, the Company’s officers had their pay reduced by 10 percent for 2009.

By the end of March, the Company will have reduced its global workforce by more than 1,400 salaried professionals and more than 1,300 hourly manufacturing plant employees – or about 6 percent of its total workforce – since the beginning of the fourth quarter 2008. During that time, Cummins has taken a number of other steps to align its costs with the current and expected future demand for its products, including:

• Cutting 2,500 contract and temporary workers

• Freezing hiring, except in rare cases

• Reducing the number of corporate officers by 10 percent by March 31

• Temporarily closing or shortening work weeks at a number of manufacturing facilities

• Cutting discretionary spending

• Reducing IT spending

• Reducing planned capital expenditures in 2009 significantly from original planned levels, while continuing to focus on critical needs such as the necessary development work to meet new emissions standards in the U.S. in 2010.

Despite the difficult economic climate, the Company’s balance sheet remains strong with low debt, healthy cash reserves and access to a $1.1 billion credit revolver. Cash generation and investment in future products, such as those to meet new U.S. emissions standards in 2010, and to support customer requirements will be a priority in 2009. In light of the current economic conditions, the Company also has suspended its stock repurchase program but remains committed to maintaining its current dividend.

“We are in an extraordinarily challenging period, and while we don’t expect overall economic conditions to improve in 2009, we entered this recession in the strongest financial position in the Company’s history,” Solso said. “Our experienced management team understands what it takes for Cummins to be successful in difficult times, and I am confident that we will do the hard work and make the difficult decisions necessary to emerge from this downturn well positioned to resume our recent history of profitable growth.”

Fourth quarter details

Engine Segment

Sales of $1.94 billion were 10 percent lower than $2.16 billion in same period a year ago. Segment EBIT fell 79 percent to $25 million, or 1.3 percent of sales, compared to $120 million, or 5.6 percent of sales, in 2007.

Engine shipments declined in nearly all on-highway markets, including heavy-duty truck (9 percent); medium-duty truck (9 percent); Chrysler/light-duty auto (34 percent) recreational vehicle (72 percent) and construction (30 percent). The segment’s performance also was negatively affected by higher material costs, currency effects, increased warranty expense and lower income from its joint ventures.

Power Generation Segment

Sales increased 6 percent to $887 million compared to $840 million a year ago, while Segment EBIT of $75 million, or 8.5 percent of sales, decreased 13 percent compared to $86 million, or 10.2 percent of sales, in the same period in 2007.

Commercial generator sales improved 14 percent to $562 million, driven by strength in Western Europe and China, and more than offset a large decline in the Company’s consumer generator business as a result of continued weakness in the U.S. Higher material costs and unfavorable currency effects offset improved pricing, resulting in lower segment EBIT.

Components Segment

Sales decreased 13 percent to $676 million, from $777 million in the fourth quarter of 2007, while Segment EBIT of $2 million, or 0.3 percent of sales, fell 96 percent from $47 million, or 6.0 percent of sales, the same period a year ago. In addition to lower sales, unfavorable currency effects, increased warranty expense and the gain associated with the sale of a business in the fourth quarter of 2007 contributed to lower year-over-year Segment EBIT.

Sales were flat in the Company’s exhaust aftertreatment business, but fell significantly in the other three businesses in the segment: Fuel Systems sales fell 25 percent, Turbocharger sales fell 18 percent and Filtration sales decreased 11 percent as the segment felt the effects of the demand drop in truck and construction equipment markets around much of the world.

Distribution Segment

Sales increased 19 percent to $557 million, from $468 million in the fourth quarter of 2007. Excluding the impact of currency, sales grew in all nine of the business’ geographic regions, led by sales of high horsepower engines to industrial markets and power generator equipment. Results from a recently consolidated distributor location in the United States also contributed significantly to the sales gain.

Segment EBIT of $64 million, or 11.5 percent of sales, was 14 percent higher than $56 million, or 12.0 percent of sales, during the same period in 2007.  The strong Segment EBIT performance came despite unfavorable currency effects, primarily in Europe, as a result of the strong U.S. dollar. 

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 approximately 190 countries and territories through a network of more than 500 company-owned and independent distributor locations and approximately 5,200 dealer locations. Cummins reported net income of $801 million on sales of $14.34 billion in 2008. Press releases can be found on the Web at www.cummins.com. 

Presentation of Non-GAAP Financial Information

EBIT is a non-GAAP measure used in this release.  Each 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. EST. 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

Forward-looking disclosure statement

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.