8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

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

Date of Report: July 31, 2018

  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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

1

Item 2.02. Results of Operations and Financial Condition.

On July 31, 2018, Cummins Inc. (“Cummins,” “the Company,” “the registrant,” “we,” “our,” or “us”) issued the attached press release reporting its financial results for the second quarterof 2018, which is furnished herewith as Exhibit 99.

The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(d) The following exhibit is furnished pursuant to Item 2.02 herewith: 

99-Press Release dated July 31, 2018

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: July 31, 2018

CUMMINS INC.

 /s/ CHRISTOPHER C. CLULOW

Christopher C. Clulow

Vice President - Corporate Controller
(Principal Accounting Officer)

2

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

	Three months ended
In millions, except per share amounts	July 1, 2018		July 2, 2017
NET SALES	$	6,132	$	5,078
Cost of sales	4,692		3,827
GROSS MARGIN	1,440		1,251
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses	613		606
Research, development and engineering expenses	219		175
Equity, royalty and interest income from investees	110		98
Other operating income (expense), net	4		18
OPERATING INCOME	722		586
Interest income	10		5
Interest expense	28		21
Other income, net	11		29
INCOME BEFORE INCOME TAXES	715		599
Income tax expense	161		158
CONSOLIDATED NET INCOME	554		441
Less: Net income attributable to noncontrolling interests	9		17
NET INCOME ATTRIBUTABLE TO CUMMINS INC.	$	545	$	424
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic	$	3.33	$	2.53
Diluted	$	3.32	$	2.53
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	163.8		167.3
Diluted	164.3		167.8
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	1.08	$	1.025
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

3

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

	Six months ended
In millions, except per share amounts	July 1, 2018		July 2, 2017
NET SALES	$	11,702	$	9,667
Cost of sales	9,062		7,284
GROSS MARGIN	2,640		2,383
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses	1,190		1,153
Research, development and engineering expenses	429		333
Equity, royalty and interest income from investees	225		206
Other operating income (expense), net	6		23
OPERATING INCOME	1,252		1,126
Interest income	17		7
Interest expense	52		39
Other income, net	21		53
INCOME BEFORE INCOME TAXES	1,238		1,147
Income tax expense	359		301
CONSOLIDATED NET INCOME	879		846
Less: Net income attributable to noncontrolling interests	9		26
NET INCOME ATTRIBUTABLE TO CUMMINS INC.	$	870	$	820
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic	$	5.30	$	4.90
Diluted	$	5.27	$	4.88
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	164.3		167.4
Diluted	165.0		167.9
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	2.16	$	2.05
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

4

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (a)

In millions, except par value	July 1, 2018			December 31, 2017
ASSETS
Current assets
Cash and cash equivalents	$	1,318		$	1,369
Marketable securities	214			198
Total cash, cash equivalents and marketable securities	1,532			1,567
Accounts and notes receivable, net	4,095			3,618
Inventories	3,559			3,166
Prepaid expenses and other current assets	649			577
Total current assets	9,835			8,928
Long-term assets
Property, plant and equipment, net	3,824			3,927
Investments and advances related to equity method investees	1,303			1,156
Goodwill	1,079			1,082
Other intangible assets, net	940			973
Pension assets	1,022			1,043
Other assets	912			966
Total assets	$	18,915		$	18,075
LIABILITIES
Current liabilities
Accounts payable (principally trade)	$	2,981		$	2,579
Loans payable	55			57
Commercial paper	802			298
Accrued compensation, benefits and retirement costs	468			811
Current portion of accrued product warranty	464			454
Current portion of deferred revenue	479			500
Other accrued expenses	806			915
Current maturities of long-term debt	49			63
Total current liabilities	6,104			5,677
Long-term liabilities
Long-term debt	1,556			1,588
Postretirement benefits other than pensions	289			289
Pensions	331			330
Other liabilities and deferred revenue	2,441			2,027
Total liabilities	$	10,721		$	9,911
EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares authorized, 222.4 and 222.4 shares issued	$	2,239		$	2,210
Retained earnings	12,009			11,464
Treasury stock, at cost, 59.1 and 56.7 shares	(5,276		)	(4,905		)
Common stock held by employee benefits trust, at cost, 0.5 and 0.5 shares	(6		)	(7		)
Accumulated other comprehensive loss	(1,667		)	(1,503		)
Total Cummins Inc. shareholders’ equity	7,299			7,259
Noncontrolling interests	895			905
Total equity	$	8,194		$	8,164
Total liabilities and equity	$	18,915		$	18,075
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

5

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (a)

	Six months ended
In millions	July 1, 2018			July 2, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income	$	879		$	846
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization	308			284
Deferred income taxes	(21		)	—
Equity in income of investees, net of dividends	(163		)	(132		)
Pension contributions under (in excess of) expense, net	25			(44		)
Other post retirement benefits payments in excess of expense, net	—			(8		)
Stock-based compensation expense	28			23
Loss contingency payments	(65		)	—
Translation and hedging activities	(21		)	31
Changes in current assets and liabilities
Accounts and notes receivable	(555		)	(488		)
Inventories	(475		)	(264		)
Other current assets	(42		)	21
Accounts payable	442			403
Accrued expenses	94			132
Changes in other liabilities and deferred revenue	5			103
Other, net	34			(81		)
Net cash provided by operating activities	473			826
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(186		)	(182		)
Investments in internal use software	(35		)	(40		)
Investments in and advances to equity investees	(15		)	(64		)
Investments in marketable securities—acquisitions	(143		)	(69		)
Investments in marketable securities—liquidations	116			162
Cash flows from derivatives not designated as hedges	(9		)	19
Other, net	36			14
Net cash used in investing activities	(236		)	(160		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (payments) of commercial paper	504			(78		)
Payments on borrowings and capital lease obligations	(33		)	(29		)
Distributions to noncontrolling interests	(11		)	(10		)
Dividend payments on common stock	(355		)	(343		)
Repurchases of common stock	(379		)	(120		)
Other, net	21			36
Net cash used in financing activities	(253		)	(544		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(35		)	51
Net (decrease) increase in cash and cash equivalents	(51		)	173
Cash and cash equivalents at beginning of year	1,369			1,120
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,318		$	1,293
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

6

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

		In millions	Engine			Distribution			Components			Power Systems			Electrified Power (1)			Total Segment			Intersegment Eliminations (2)			Total
		Three months ended July 1, 2018
		External sales	$	2,050		$	1,988		$	1,402		$	691		$	1		$	6,132		$	—		$	6,132
		Intersegment sales	646			6			485			555			—			1,692			(1,692		)	—
		Total sales	2,696			1,994			1,887			1,246			1			7,824			(1,692		)	6,132
		Research, development and engineering expenses	76			5			62			60			16			219			—			219
		Equity, royalty and interest income from investees	67			11			14			18			—			110			—			110
		Interest income	3			3			2			2			—			10			—			10
		Segment EBITDA	362			145			237			186			(21		)	909			(12		)	897
		Depreciation and amortization (3)	47			27			47			32			1			154			—			154
		EBITDA as a percentage of total sales	13.4		%	7.3		%	12.6		%	14.9		%	NM			11.6		%				14.6		%
		Three months ended July 2, 2017
		External sales	$	1,711		$	1,716		$	1,064		$	587		$	—		$	5,078		$	—		$	5,078
		Intersegment sales	596			6			390			430			—			1,422			(1,422		)	—
		Total sales	2,307			1,722			1,454			1,017			—			6,500			(1,422		)	5,078
		Research, development and engineering expenses	63			4			58			50			—			175			—			175
		Equity, royalty and interest income from investees	56			13			15			14			—			98			—			98
		Interest income	2			1			1			1			—			5			—			5
		Segment EBITDA	323			127			228			90			—			768			(4		)	764
		Depreciation and amortization (3)	46			31			38			29			—			144			—			144
		EBITDA as a percentage of total sales	14.0		%	7.4		%	15.7		%	8.8		%	—		%	11.8		%				15.0		%
"NM" - not meaningful information
(1	)	We formed the Electrified Power Segment effective January 1, 2018. Our Electrified Power segment provides fully electric and hybrid powertrain solutions along with innovative components and subsystems to serve all our markets as they adopt electrification, meeting the needs of our original equipment manufacturer partners and end customers.
(2	)	Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended July 1, 2018 and July 2, 2017.
(3	)	Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Income as "Interest expense." A portion of depreciation expense is included in "Research, development and engineering expenses" above.

7

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

		In millions	Engine			Distribution			Components			Power Systems			Electrified Power (1)			Total Segment			Intersegment Eliminations (2)			Total
		Six months ended July 1, 2018
		External sales	$	3,863		$	3,835		$	2,715		$	1,286		$	3		$	11,702		$	—		$	11,702
		Intersegment sales	1,279			12			925			1,034			—			3,250			(3,250		)	—
		Total sales	5,142			3,847			3,640			2,320			3			14,952			(3,250		)	11,702
		Research, development and engineering expenses	155			10			124			117			23			429			—			429
		Equity, royalty and interest income from investees	134			24			30			37			—			225			—			225
		Interest income	5			5			3			4			—			17			—			17
		Segment EBITDA	648			268			464			328			(31		)	1,677			(80		)	1,597
		Depreciation and amortization (3)	96			54			93			62			2			307			—			307
		EBITDA as a percentage of total sales	12.6		%	7.0		%	12.7		%	14.1		%	NM			11.2		%				13.6		%
		Six months ended July 2, 2017
		External sales	$	3,168		$	3,353		$	2,044		$	1,102		$	—		$	9,667		$	—		$	9,667
		Intersegment sales	1,162			14			754			797			—			2,727			(2,727		)	—
		Total sales	4,330			3,367			2,798			1,899			—			12,394			(2,727		)	9,667
		Research, development and engineering expenses	117			8			108			100			—			333			—			333
		Equity, royalty and interest income from investees	128			24			28			26			—			206			—			206
		Interest income	3			2			1			1			—			7			—			7
		Segment EBITDA	596			257			444			175			—			1,472			(3		)	1,469
		Depreciation and amortization (3)	90			61			75			57			—			283			—			283
		EBITDA as a percentage of total sales	13.8		%	7.6		%	15.9		%	9.2		%	—		%	11.9		%				15.2		%
"NM" - not meaningful information
(1	)	We formed the Electrified Power Segment effective January 1, 2018. Our Electrified Power segment provides fully electric and hybrid powertrain solutions along with innovative components and subsystems to serve all our markets as they adopt electrification, meeting the needs of our original equipment manufacturer partners and end customers.
(2	)	Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the six months ended July 1, 2018 and July 2, 2017.
(3	)	Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Income as "Interest expense." The amortization of debt discount and deferred costs was $1 million for both six month periods ended July 1, 2018 and July 2, 2017. A portion of depreciation expense is included in "Research, development and engineering expenses" above.

8

CUMMINS INC. AND SUBSIDIARIES

RECONCILIATION OF SEGMENT INFORMATION

(Unaudited)

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

	Three months ended				Six months ended
In millions	July 1, 2018		July 2, 2017		July 1, 2018		July 2, 2017
Total EBITDA	$	897	$	764	$	1,597	$	1,469
Less:
Depreciation and amortization	154		144		307		283
Interest expense	28		21		52		39
Income before income taxes	$	715	$	599	$	1,238	$	1,147

9

CUMMINS INC. AND SUBSIDIARIES

SELECT FOOTNOTE DATA

(Unaudited)

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

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

	Three months ended				Six months ended
In millions	July 1, 2018		July 2, 2017		July 1, 2018		July 2, 2017
Manufacturing entities
Beijing Foton Cummins Engine Co., Ltd.	$	24	$	22	$	45	$	55
Dongfeng Cummins Engine Company, Ltd.	17		19		34		41
Chongqing Cummins Engine Company, Ltd.	15		10		32		19
Cummins Westport, Inc.	6		4		12		5
Dongfeng Cummins Emission Solutions Co., Ltd.	4		4		9		7
All other manufacturers	24		19		49		39
Distribution entities
Komatsu Cummins Chile, Ltda.	6		8		13		15
Cummins share of net income	96		86		194		181
Royalty and interest income	14		12		31		25
Equity, royalty and interest income from investees	$	110	$	98	$	225	$	206

PENSIONS AND OTHER POSTRETIREMENT BENEFITS

On January 1, 2018, we retroactively adopted the new accounting standard related to the presentation of pension and other postretirement benefit costs, which resulted in the adjustment of prior period balances in the Condensed Consolidated Statements of Income by the following amounts:

	Favorable / (Unfavorable)
	2017															2016
In millions	Q1			Q2			Q3			Q4			Total			Total
Cost of sales	$	4		$	2		$	2		$	2		$	10		$	6
Selling, general and administrative expenses	(10		)	(10		)	(9		)	(10		)	(39		)	(53		)
Research, development and engineering expenses (1)	—			(1		)	—			(1		)	(2		)	(1		)
Total change in operating income	(6		)	(9		)	(7		)	(9		)	(31		)	(48		)
Other non operating income, net	6			9			7			9			31			48
Total change in income before income taxes	$	—		$	—		$	—		$	—		$	—		$	—

ENGINE SYSTEM CAMPAIGN ACCRUAL

During 2017, the California Air Resources Board (CARB) and the U.S. Environmental Protection Agency (EPA) selected certain of our pre-2013 model year engine systems for additional emissions testing. Some of these engine systems failed CARB and EPA tests as a result of degradation of an aftertreatment component.We recorded charges of $36 millionto cost of sales in ourConsolidated Statements of Incomeduring 2017 for the then expected cost of field campaigns to repair some of these engine systems.We concluded based upon additional emission testing performed, and further discussions with the EPA and CARB in the first quarter of 2018, that the field campaigns should be expanded to include a larger population of our engine systems that are subject to the aftertreatment component degradation, including our model years 2010 through 2015. As a result, we recorded an additional charge of $187 million, or$0.87per share, to cost of sales in ourCondensed Consolidated Statements of Income($94 millionrecorded in the Components segment and$93 millionin the Engine segment)in the first quarter of 2018.

In the second quarter of 2018, we reached agreement with the CARB and EPA regarding our plans to address the affected populations. In finalizing our plans, we have increased the number of systems to be addressed through hardware replacement

10

CUMMINS INC. AND SUBSIDIARIES

SELECT FOOTNOTE DATA

(Unaudited)

compared to our assumptions last quarter. As a result of this agreement and considering that the hardware replacement solution is a higher cost approach than that previously assumed on some of the engine systems, we recorded an additional charge of$181 million, or$0.85per share, to cost of sales in ourCondensed Consolidated Statements of Income($91 millionrecorded in the Engine segment and$90 millionin the Components segment)in the second quarter of 2018. With the additional charge in the second quarter of 2018, the total accrual related to this matter is$404 million, which represents our best estimate of the cost to execute the campaigns. The campaigns will launch in phases across the affected population and are expected to begin in the third quarter of 2018 with a projection to be substantially completed by December 31, 2020.

11

CUMMINS INC. AND SUBSIDIARIES

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)

Reconciliation of Non GAAP measures - Earnings before interest, income taxes, noncontrolling interests, depreciation and amortization (EBITDA)

Effective January 1, 2018, we use EBITDA as a primary basis for the Chief Operating Decision Maker to evaluate the performance of each of our operating segments and our consolidated results. It is also a component in measuring our variable compensation programs. We believe EBITDA is a useful measure for our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard for financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. Our 2017 and 2016 EBITDA measures, as restated, were as follows:

In millions	Engine		Distribution		Components		Power Systems		Total Segment		Intersegment Eliminations			Total
2017
Q1	$	273	$	130	$	216	$	85	$	704	$	1		$	705
Q2	323		127		228		90		768		(4		)	764
Q3	276		120		259		111		766		22			788
Q4	271		123		214		125		733		36			769
2017 Total	$	1,143	$	500	$	917	$	411	$	2,971	$	55		$	3,026
2016 Total	$	849	$	508	$	774	$	378	$	2,509	$	17		$	2,526

EBITDA is not in accordance with, or an alternative for, accounting principles generally accepted in the United States (GAAP) and may not be consistent with measures used by other companies. It should be considered supplemental data; however, the amounts included in the EBITDA calculation are derived from amounts included in the Condensed Consolidated Statements of Income. Below is a reconciliation of “Net income attributable to Cummins Inc.” to EBITDA for each of the applicable periods:

	Three months ended						Six months ended
In millions	July 1, 2018			July 2, 2017			July 1, 2018			July 2, 2017
Net income attributable to Cummins Inc.	$	545		$	424		$	870		$	820
Net income attributable to Cummins Inc. as a percentage of net sales	8.9		%	8.3		%	7.4		%	8.5		%
Add:
Net income attributable to noncontrolling interests	9			17			9			26
Consolidated net income	554			441			879			846
Add:
Interest expense	28			21			52			39
Income tax expense	161			158			359			301
Depreciation and amortization	154			144			307			283
EBITDA	$	897		$	764		$	1,597		$	1,469
EBITDA as a percentage of net sales	14.6		%	15.0		%	13.6		%	15.2		%
Add: Engine system campaign charge	181			—			368			—
EBITDA, excluding engine system campaign charge	$	1,078		$	764		$	1,965		$	1,469
EBITDA, excluding engine system campaign charge, as a percentage of net sales	17.6		%	15.0		%	16.8		%	15.2		%

12

CUMMINS INC. AND SUBSIDIARIES

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)

Net income and diluted earnings per share (EPS) attributable to Cummins Inc. excluding discrete tax items

We believe these are useful measures of our operating performance for the periods presented as they illustrate our operating performance without regard to special items including tax adjustments. These measures are not in accordance with, or an alternative for GAAP and may not be consistent with measures used by other companies. This should be considered supplemental data. The following table reconciles net income attributable to Cummins Inc. to net income attributable to Cummins Inc. excluding discrete tax items for the following periods:

	Three months ended
	July 1, 2018						July 2, 2017
In millions	Net Income			Diluted EPS			Net Income		Diluted EPS
Net income attributable to Cummins Inc.	$	545		$	3.32		$	424	$	2.53
Add:
Discrete tax items	(4		)	(0.03		)	—		—
Net income attributable to Cummins Inc. excluding discrete tax items	$	541		$	3.29		$	424	$	2.53

	Six months ended
	July 1, 2018				July 2, 2017
In millions	Net Income		Diluted EPS		Net Income		Diluted EPS
Net income attributable to Cummins Inc.	$	870	$	5.27	$	820	$	4.88
Add:
Discrete tax items	74		0.45		—		—
Net income attributable to Cummins Inc. excluding discrete tax items	$	944	$	5.72	$	820	$	4.88

13

CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Engine Segment Sales by Market and Unit Shipments by Engine Classification

Sales for our Engine segment by market were as follows:

2018
In millions	Q1		Q2		Q3		Q4		YTD
Heavy-duty truck	$	815	$	920	$	—	$	—	$	1,735
Medium-duty truck and bus	692		777		—		—		1,469
Light-duty automotive	402		444		—		—		846
Off-highway	537		555		—		—		1,092
Total sales	$	2,446	$	2,696	$	—	$	—	$	5,142
2017
In millions	Q1		Q2		Q3		Q4		YTD
Heavy-duty truck	$	620	$	714	$	776	$	730	$	2,840
Medium-duty truck and bus	544		701		625		643		2,513
Light-duty automotive	423		429		452		423		1,727
Off-highway	436		463		483		491		1,873
Total sales	$	2,023	$	2,307	$	2,336	$	2,287	$	8,953

Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:

2018
Units	Q1	Q2	Q3	Q4	YTD
Heavy-duty	26,600	32,000	—	—	58,600
Medium-duty	74,000	83,500	—	—	157,500
Light-duty	61,900	68,500	—	—	130,400
Total units	162,500	184,000	—	—	346,500
2017
Units	Q1	Q2	Q3	Q4	YTD
Heavy-duty	19,200	24,100	28,100	24,500	95,900
Medium-duty	60,300	71,600	68,500	67,700	268,100
Light-duty	63,100	65,600	66,300	62,500	257,500
Total units	142,600	161,300	162,900	154,700	621,500

14

CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Distribution Segment Sales by Product Line

Sales for our Distribution segment by product line were as follows:

2018
In millions	Q1		Q2		Q3		Q4		YTD
Parts	$	808	$	817	$	—	$	—	$	1,625
Engines	367		461		—		—		828
Service	352		370		—		—		722
Power generation	326		346		—		—		672
Total sales	$	1,853	$	1,994	$	—	$	—	$	3,847
2017
In millions	Q1		Q2		Q3		Q4		YTD
Parts	$	745	$	759	$	768	$	768	$	3,040
Engines	275		314		342		438		1,369
Service	319		320		326		347		1,312
Power generation	306		329		317		385		1,337
Total sales	$	1,645	$	1,722	$	1,753	$	1,938	$	7,058

Component Segment Sales by Business

Sales for our Components segment by product line were as follows:

2018
In millions	Q1		Q2		Q3		Q4		YTD
Emission solutions	$	775	$	841	$	—	$	—	$	1,616
Turbo technologies	340		355		—		—		695
Filtration	320		324		—		—		644
Electronics and fuel systems	201		226		—		—		427
Automated transmissions	117		141		—		—		258
Total sales	$	1,753	$	1,887	$	—	$	—	$	3,640
2017
In millions	Q1		Q2		Q3		Q4		YTD
Emission solutions	$	616	$	674	$	696	$	689	$	2,675
Turbo technologies	287		307		297		288		1,179
Filtration	277		291		287		298		1,153
Electronics and fuel systems	164		182		184		188		718
Automated transmissions	—		—		69		95		164
Total sales	$	1,344	$	1,454	$	1,533	$	1,558	$	5,889

15

CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Power Systems Segment Sales by Product Line

Sales for our Power Systems segment by product line were as follows:

2018
In millions	Q1		Q2		Q3		Q4		YTD
Power generation	$	571	$	666	$	—	$	—	$	1,237
Industrial	414		483		—		—		897
Generator technologies	89		97		—		—		186
Total sales	$	1,074	$	1,246	$	—	$	—	$	2,320
2017
In millions	Q1		Q2		Q3		Q4		YTD
Power generation	$	526	$	570	$	580	$	629	$	2,305
Industrial	275		353		385		386		1,399
Generator technologies	81		94		91		88		354
Total sales	$	882	$	1,017	$	1,056	$	1,103	$	4,058

16

EX-99

For Immediate Release

July 31, 2018

Cummins Announces Second Quarter Results; Updates Outlook for 2018

• Second quarter revenues of $6.1 billion

• GAAP¹ Net Income of $545 million and Diluted EPS of $3.32

• EBITDA of $0.9 billion or 14.6 percent of sales

• Full year revenues expected to increase 15 to 17percent

• EBITDA is expected to be in the range of 14.8 to 15.2 percent of sales

• The Company finalized its plans for a previously disclosed product campaign, resulting in a charge of $181 million or $0.85 per diluted share in the second quarter

COLUMBUS, IND. - Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2018.

Second quarter revenues of $6.1 billion increased 21 percent from the same quarter in 2017 and reached a new quarterly record. The Company delivered growth in most major markets as demand for trucks, construction, mining and power generation equipment all improved. Currency favorably impacted revenues by 1 percent.

Sales in North America improved by 22 percent while international revenues increased by 18 percent led by growth in China, Europe and Latin America.

“As a result of strong customer demand for our products, solid execution from our global manufacturing and supply chain teams and continued focus on cost reduction, the Company delivered record quarterly sales and earnings per share in the second quarter,” said Chairman and CEO Tom Linebarger. “We are on track to deliver record full year sales, earnings and cash flow. The Company now plans to return 75 percent of Operating Cash Flow to shareholders in the form of dividends and share repurchases in 2018, up from our previous plan to return 50 percent.”

During the second quarter, the Company finalized its plans for a previously disclosed product campaign and recorded a pre-tax charge of $181 million for the expected costs of the campaign. This campaign will address the performance of an aftertreatment component in certain on-highway products produced between 2010 and 2015 in North America. The Company has reached agreement with the appropriate regulatory agencies regarding our planned actions to execute the campaign and has provided in full for the estimated costs.

Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $897 million, or 14.6 percent of sales, up from $764 million or 15.0 percent of sales a year ago.

Net income attributable to Cummins in the second quarter was $545 million ($3.32 per diluted share), compared to net income of $424 million ($2.53 per diluted share) in the second quarter of 2017.

Based on the current forecast, Cummins expects full year 2018 revenues to be up 15 to 17 percent, compared to prior guidance of up 10 to 14 percent. EBITDA is projected to be in the range of 14.8 to 15.2 percent of sales, down from 15.4 to 15.8 percent of sales and reflects approximately $100 million of expense associated with trade tariffs and increased commodity costs in the second half of the year.

Recent Highlights:

• Cummins announced that it is acquiring Silicon Valley-based Efficient Drivetrains, Inc. (EDI), which designs and produces hybrid and fully- electric power solutions for commercial vehicle markets.

• DiversityInc named Cummins one of the Top 50 Companies for Diversity for a 12^th consecutive year. Cummins ranked No. 12 on the 2018 annual list, which included more than 1,000 participating companies.

• Cummins and Anhui Jianghuai Automobile Co. Ltd. (JAC Motors) announced that the two parties will form a 50:50 joint-venture after Cummins purchases Navistar’s 50 percent equity of the JAC-Navistar Diesel Engine Company (JND).

• The Company returned $393 million to shareholders in the form of dividends and share repurchases in the second quarter, and recently raised its quarterly dividend by 5.6 percent.

Second quarter 2018 detail (all comparisons to same period in 2017)

Engine Segment

• Sales - $2.7 billion, up 17 percent.

• Segment EBITDA - $362 million, or 13.4 percent of sales, compared to $323 million or 14.0 percent of sales

• Segment EBITDA reflects a charge of $91 million related to the expected costs of a previously disclosed product campaign

• Revenues increased by 12 percent in North America and 32 percent in international markets.

Distribution Segment

• Sales - $2.0 billion, up 16 percent

• Segment EBITDA - $145 million, or 7.3 percent of sales, compared to $127 million or 7.4 percent of sales

• Revenues in North America increased by 22 percent and international sales grew by 8 percent

Components Segment

• Sales - $1.9 billion, up 30 percent

• Segment EBITDA - $237 million, or 12.6 percent of sales, compared to $228 million or 15.7 percent of sales

• Segment EBITDA reflects a charge of $90 million related to the expected costs of a previously disclosed campaign to address the performance of an aftertreatment component

• The Eaton Cummins Automated Transmission joint venture recorded sales of $141 million and an EBITDA loss of $4 million in the second quarter

• Revenues in North America increased by 36 percent, and international sales grew by 22 percent

Power Systems Segment

• Sales - $1.2 billion, up 23 percent

• Segment EBITDA - $186 million, or 14.9 percent of sales, compared to $90 million, or 8.8 percent of sales

• Revenues in North America increased by 30 percent and international sales grew 18 percent

• Increased demand in power generation, mining and oil and gas markets drove the growth in sales

Electrified Power Segment

• Sales - $1 million

• Segment EBITDA loss - $21 million

¹ Generally Accepted Accounting Principles

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service a broad portfolio of power solutions. The company’s products range from diesel and natural gas engines to hybrid and electric platforms, as well as related technologies, including battery systems, fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins currently employs approximately 58,600 people committed to powering a more prosperous world. Cummins serves customers in approximately 190 countries and territories through a network of approximately 500 company-owned and independent distributor locations and approximately 7,500 dealer locations. Cummins earned about $1 billion on sales of $20.4 billion in 2017. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at www.twittter.com/cummins and on YouTube at www.youtube.com/cumminsinc.

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 our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward looking statements include, without limitation, statements relating to our plans and expectations for our revenues and EBITDA percentage for the full year of 2018. Our 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: (i) a sustained slowdown or significant downturn in our markets; (ii) our truck manufacturing and OEM customers discontinuing outsourcing their engine needs; (iii) the development of new technologies; (iv) the discovery of any significant additional problems with our engine platforms or aftertreatment systems in North America; (v) performance or safety-related recalls; (vi) lower than anticipated market acceptance of our new or existing products or services; (vii) a slowdown in infrastructure development and/or depressed commodity prices; (viii) unpredictability in the adoption, implementation and enforcement of increasingly stringent emissions standards around the world; (ix) our reliance on significant earnings from investees that we do not directly control; (x) the adoption and impact of new tax legislation; (xi) potential security breaches or other disruptions to our information technology systems and data security; (xii) financial distress or a change-in-control of one of our large truck OEM customers; (xiii) our pursuit of strategic acquisitions and divestitures; and (xiv) other risks detailed from time to time in our Securities and Exchange Commission filings, particularly in the Risk Factors section of our 2017 Annual Report on Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov or at

http://www.cummins.com in the Investor Relations section of our website.

Presentation of Non-GAAP Financial Information

EBITDA is a non-GAAP measure used in this release, and 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 EBITDA 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.