Cummins on Pace for Another Record Year in 2008, Chairman and CEO Tim Solso Tells Shareholders

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COLUMBUS, Ind.--(BUSINESS WIRE)--

Cummins Inc. (NYSE: CMI) is on pace to report a fifth consecutive year of record sales and profits in 2008, and is poised for significant further growth over the next several years, Chairman and Chief Executive Officer Tim Solso told shareholders today at the Company's annual meeting.

Cummins shareholders re-elected all nine Cummins directors for another year and ratified the selection of PriceWaterhouse Coopers LLC as the Company's external auditing firm. Shareholders also voted to increase the number of authorized shares of common stock from 300 million to 500 million and defeated a shareholder proposal calling on the Company to take steps to adhere to the conventions of the International Labor Organization.

Speaking to shareholders from the Columbus Engine Plant, Solso recapped Cummins' 2007 performance and then outlined the Company's growth plans.

Cummins enjoyed its most profitable year ever in 2007 when it reported net earnings of $739 million on $13.05 billion in sales. The Company's total shareholder return of 118 percent in 2007 placed it 10th among the Fortune 500 companies, and its five-year average annual return of 58 percent was ninth best.

"Cummins remains on track for further profitable growth - this year and beyond - despite the economic uncertainty affecting some of our U.S. consumer-oriented markets," Solso said. "We have gained share in key markets in the U.S. in the past year, and our international presence continues to strengthen.

"Our strong financial position today gives us the flexibility to invest in the people, products, facilities and technologies for future growth."

Solso discussed the Company's growth targets for 2008: 12 percent sales growth and an Earnings Before Interest and Taxes goal of 10 percent of sales. The Company also is targeting a 20 percent return on equity and a 25 percent return on average net assets.

Solso spoke of three broad global trends - increasingly strict emissions standards, the globalization of the world economy and rising demand for energy around the world - that will benefit Cummins over the next several years.

    For example:

    --  As a leader in emissions technology, Cummins stands to benefit
        from new emissions standards around the world over the next
        several years - both for the Company's engines and components
        such as exhaust aftertreatment devices, fuel systems,
        turbochargers and filters.

    --  Cummins has large and growing businesses in key international
        markets, such as China, India and Brazil and is pursuing
        growth opportunities in new emerging markets such as Russia,
        Vietnam and Africa.

    --  The Company expects continued strong growth in its joint
        venture operations, especially in China and India, and its
        North American distribution network.

    --  The surging demand for power in the Middle East, Asia and
        developing economies such as those in Africa has resulted in
        shortages, which is expected to continue to benefit the
        Company's growing Power Generation business.

Solso also outlined several key drivers for the Company's expected future growth, including:

    --  Cummins' deep technological capability. The Company is
        investing in the right technology across its full range of
        products, using world-class tools and methods. That investment
        is reflected in the recent market share gains, and has allowed
        the company to pursue profitable growth opportunities in many
        of its markets around the world.

    --  Cummins' strong global network, which helps insulate it from
        downturns in an individual market or region. Cummins does
        business in more than 190 countries and territories.
        Fifty-four percent of the Company's sales were generated
        outside the United States in 2007, with that number growing to
        57 percent in the first quarter of 2008. Likewise, Cummins
        produced nearly 900,000 engines in 2007 - more than half
        outside the United States.

    --  Cummins has developed strategic partnerships with leading
        companies all over the world.

    --  Cummins has announced a large number of new products that are
        now being introduced or will be introduced during the next
        several years, including: light-duty engines in the U.S. and
        China by 2010; engines that meet the next wave of on- and
        off-highway emissions standards in the U.S. and Europe over
        the next few years; a new industry-leading common rail fuel
        system and innovative user-friendly filters.

    --  Cummins is investing in additional capacity across the
        Company. The Company has plans for 22 major facility additions
        or upgrades and is expanding its global distribution network.

"I'm proud of our efforts over the past several years to grow the Company and improve our financial structure, which have produced good returns for our shareholders," Solso said. "That work has positioned us extremely well, and I am more excited about the future of the Company than at any time during my 37 years with Cummins."

Board members selected

In the business portion of the meeting, Cummins shareholders elected nine directors to the Board for one-year terms. All the directors currently serve on the Board at Cummins. They are:

    --  Tim Solso, Chairman and Chief Executive Officer (first elected
        to the board in 1994)

    --  Joe Loughrey, President and Chief Operating Officer (2005)

    --  Robert J. Darnall, Retired Chairman and CEO, Inland Steel
        (1989)

    --  Robert Herdman, Managing Director of Kalorama Partners LLC
        (February 2008)

    --  Alexis M. Herman, Chairman and CEO, New Ventures Inc. (2001)

    --  William I. Miller, Chairman, Irwin Management Corp. (1989)

    --  Georgia R. Nelson, President, Midwest Generation EME (2004)

    --  Carl Ware, Retired Executive Vice President, Coca-Cola Co.
        (2004)

    --  J. Lawrence Wilson, Retired Chairman and CEO, Rohm and Haas
        Co. (1990).

    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 $739 million on sales of $13.05 billion in 2007. Press releases can be found on the Web at www.cummins.com.

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.

Source: Cummins Inc.

Released May 13, 2008