Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
1. description of
the plan
The following description of the Cummins Inc. and
Affiliates Retirement and Savings Plan for Bargaining Unit Employees (the
“Plan”) provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan designed to
provide participants with a systematic method of savings and at the same time
enable such participants to benefit from contributions made to the Plan by Cummins
Inc. and Affiliates (collectively, the “Company”). Eligible employees are
bargaining unit employees of the Company. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (“ERISA”).
Master Trust
The Cummins Inc. and Affiliates Retirement and
Savings Plans Master Trust (“Master Trust”) holds the assets of the Plan and
the Cummins Inc. and Affiliates Retirement and Savings Plan for Salaried and Non-Bargaining
Hourly Employees.
The trustee for the Master Trust is State Street
Corporation. As participants transfer between different locations within the
Company, their related Plan account transfers to the appropriate Plan, if
applicable. Such transfers are reflected in the accompanying financial
statements as “Fund transfers with Affiliate Plans”.
Contributions
Participants may contribute up to 50% of their
eligible pay through a combination of pre-tax and after-tax contributions.
Participants may direct their contributions in any of twenty-one investment
options.
Matching Contributions
The Company matches participant contributions in
amounts ranging from 50% of the first 2% of participant wages contributed (up
to a maximum of $325), 100% of the first 2% of participants wages contributed, 50%
of $900, 50% of the first 4% of participants wages contributed, 50% of the
first 6% of participants wages contributed, 100% of the first 2% of participant
wages contributed, 50% on the next 2%, and 25% on the next 4% of participant
wages contributed based on the participant’s employing company, as defined. The
matching contribution is made in the form of cash or Company stock, based on
the participant’s employing company, as defined. The entire amount of Company stock
received as a match is available for diversification.
5
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
Participant Accounts
Each participant’s account is credited with the
participant’s contributions, the Company’s contributions and an allocation of
Plan earnings. Allocations of Plan earnings are made daily and are based upon
the participant’s weighted average account balance for the day, as described in
the Plan document.
Vesting
Participants are fully vested in all employee and
employer contributions and earnings thereon at all times.
Benefit Payments
Upon termination of employment or retirement, account
balances are paid either as a lump-sum distribution or annual installments not
to exceed the lesser of 15 years or the life expectancy of the participant
and/or joint life expectancy of the participant and beneficiary, and commence
no later than the participant reaching age 70-1/2. The Plan also permits
hardship withdrawals from participant pre-tax contributions and actual earnings
thereon. Participants may also withdraw their after-tax contributions.
Voting Rights
Each participant is entitled to exercise voting
rights attributable to the Company shares allocated to his or her account. The
Trustee shall vote all Company shares for which no voting instructions were
received in the same manner and proportion as the shares for which voting
instructions were received.
Participant Loans
A participant can obtain a loan up to a maximum of
the lesser of $50,000 or 50% of the participant’s account balance. Loans are
secured by the participant’s account balance and bear interest at the prime
rate plus one percent, and mature no later than 4½ years from the date of the
loan.
6
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
Plan Termination
Although it has not expressed any intent to do so,
the Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA.
2. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been
prepared on an accrual basis of accounting.
Investments
The Plan’s investment in the Master Trust is stated
at fair value based on the fair value of the underlying investments of the
Master Trust, determined primarily by quoted market prices, except for the Stable
Value fund and common/collect trust investments. The Stable Value fund consists
primarily of insurance contracts and bank investment contracts with various
companies. Insurance contracts and bank contracts are nontransferable, but
provide for benefit-responsive withdrawals by plan participants at contract
value. Alternative investment contracts consist of investments together with
contracts under which a bank or other institution provides for
benefit-responsive withdrawals by plan participants at contract value. Contract
value represents contributions made to investment contracts, plus earnings,
less participant withdrawals and administrative expenses. Fair value is
determined using a discounted cash flow method by considering such factors as
the benefit-responsiveness of the investment contracts, the ability of the
parties to perform in accordance with the terms of the contracts, and the
likelihood that plan-directed withdrawals would cause payment to plan
participants to be at amounts other than contract value. There are no
limitations on liquidity guarantees and no valuation reserves are being
recorded to adjust contract amounts.
The common/collective trust investments are public
investment securities valued using the net asset value (NAV) provided by fund
managers. The NAV is quoted on a private market that is not active; however,
the unit price is based on underlying investments which are traded on an active
market.
7
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
Allocation of Master Trust Assets and Transactions
The investment income and expenses of the Master
Trust are allocated to each plan based on the relationship of the Plan’s
investment balances to the total Master Trust investment balances.
Use of Estimates
The preparation of financial statements, in
accordance with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates.
Risks and Uncertainties
The Master Trust invests in various securities.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit, and overall market volatility. Due to the level of risk
associated with certain investment securities, it is reasonably possible that
changes in the values of investment securities will occur in the near term and
such changes could materially affect the amounts reported in the financial
statements.
Payment of Benefits
Benefit payments are recorded when paid.
Administrative Expenses
Substantially all costs of administering the Plan are
paid by the Company.
Reclassifications
Certain prior year amounts have been reclassified
herein to conform to the current method of presentation.
Subsequent
Events
The Plan has evaluated events or transactions
occurring subsequent to the Statement of Net Assets Available for Benefits date
for recognition and disclosure in the accompanying financial statements through
the date the financial statements are available to be issued, which is June 24, 2011.
8
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
3. INVESTMENTS IN MASTER TRUST
The Plan’s investments are held in the Master Trust.
At December 31, 2010 and 2009, the Plan’s interest in the net assets of the
Master Trust was 13.2% and 16.0%, respectively. The following investments are
held by the Master Trust as of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
Cummins Inc. Common Stock Fund
|
|
$
|
483,475,136
|
|
|
|
$
|
209,699,172
|
|
|
|
Cummins Inc. common stock - ESOP fund
|
|
|
|
|
|
|
|
|
|
(non-participant directed)
|
|
-0-
|
|
|
|
7,896,664
|
|
|
|
Stable Value fund investments
|
|
351,711,120
|
|
|
|
359,012,662
|
|
|
|
Stable Value fund wrapper contracts
|
|
547,696
|
|
|
|
-0-
|
|
|
|
Common / collective trusts
|
|
154,976,469
|
|
|
|
119,834,914
|
|
|
|
Registered investment companies
|
|
812,990,261
|
|
|
|
715,870,383
|
|
|
|
Total
|
|
$
|
1,803,700,682
|
|
|
|
$
|
1,412,313,795
|
|
|
|
|
|
|
|
|
|
|
|
The Stable Value fund portion of the Master Trust
comprises several fully benefit-responsive insurance and investment contracts.
This fund includes both open-ended, security-backed investments as well as
closed-ended, general account investments maturing through 2020. The contracts
have varying yields which averaged 3.08 percent and 4.54 percent during the
years ended December 31, 2010 and 2009, respectively. The contracts have
varying crediting interest rates which averaged 3.11 percent and 2.45 percent
during the years ended December 31, 2010 and 2009, respectively. The crediting
interest rates adjust on varying intervals by contract. There are no reserves
against contract value for credit risk of the contract issuer or otherwise.
The Stable Value fund’s key objectives are to provide
preservation of principal, maintain a stable interest rate, and provide daily
liquidity at contract value for participant withdrawals and transfers in
accordance with the provision of the Plans. To accomplish these objectives,
the Stable Value fund invests primarily in investment contracts such as
traditional guaranteed investment contracts (GICs) and wrapper contracts (also
known as synthetic GICs). In a traditional GIC, the issuer takes a deposit from
the Stable Value fund and purchases investments that are held in the issuer’s
general account. The issuer is contractually obligated to repay the principal
and a specified rate of interest guaranteed to the Stable Value fund.
9
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
In a wrapper contract structure, the underlying
investments are owned by the Stable Value fund and held in trust for
participants. The Stable Value fund purchases a wrapper contract from an
insurance company or bank. The wrapper contract amortizes the realized and
unrealized gains and losses on the underlying fixed income investments,
typically over the duration of the investments, through adjustments to the
future interest crediting rate (which is the rate earned by participants in the
Stable Value fund for the underlying investments). The issuer of the wrapper
contract provides assurance that the adjustments to the interest crediting rate
do not result in a future interest crediting rate that is less than zero. An
interest crediting rate less than zero would result in a loss of principal or
accrued interest.
The key factors that influence future interest
crediting rates for a wrapper contract include the level of market interest
rates, the amount and timing of participant contributions, transfers, and
withdrawals into and out of the wrapper contract, the investment returns
generated by the fixed income investments that back the wrapper contract and
the duration of the underlying investments backing the wrapper contract.
Wrapper contracts’ interest crediting rates are typically reset on a monthly or
quarterly basis. While there may be slight variations from one contract to
another, most wrapper contracts use a formula to determine the interest
crediting rate that is based on the specific factors as aforementioned. Over
time, the crediting rate formula amortizes the Stable Value fund’s realized and
unrealized market value gains and losses over the duration of the underlying
investments.
Because changes in market interest rates affect the
yield to maturity and the market value of the underlying investments, they can
have a material impact on the wrapper contract’s interest crediting rate. In
addition, participant withdrawals and transfers from the Stable Value fund are
paid at contract value but funded through the market value liquidation of the
underlying investments, which also impacts the interest crediting rate. The
resulting gains and losses in the market value of the underlying investments
relative to the wrapper contract values are represented in the Statements of
Net Assets Available for Benefits as “Adjustment from fair value to contract
value”. If the adjustment from fair value to contract value is positive for a
given contract, this indicates that the wrapper contract value is greater than
the market value of the underlying investments. The embedded market value
losses will be amortized in the future through a lower interest crediting rate
than would otherwise be the case. If the adjustment from fair value to contract
value is negative, this indicates that the wrapper contract value is less than
the market value of the underlying investments. The amortization of the
embedded market value gains will cause the future interest crediting rate to be
higher than it otherwise would have been.
10
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
All wrapper contracts provide for a minimum interest
crediting rate of zero percent. In the event that the interest crediting rate
should fall to zero and the requirements of the wrapper contract are satisfied,
the wrapper issuers will pay to the Plans the shortfall needed to maintain the
interest crediting rate at zero. This helps to ensure that participants’
principal and accrued interest will be protected.
In certain circumstances, the amount withdrawn from
the wrapper contract would be payable at fair value rather than at contract
value. These events include termination of the Plans, a material adverse change
to the provisions of the Plans, if the employer elects to withdraw from a
wrapper contract in order to switch to a different investment provider, or if
the terms of a successor plan (in the event of the spin-off or sale of a
division) do not meet the wrapper contract issuer’s underwriting criteria for
issuance of a clone wrapper contract. These events described herein that could
result in the payment of benefits at market value rather than contract value
are not probable of occurring in the foreseeable future.
Examples of events that would permit a wrapper
contract issuer to terminate a wrapper contract upon short notice include the
Plans’ loss of its qualified status, uncured material breaches of
responsibilities, or material and adverse changes to the provisions of the
Plans. If one of these events was to occur, the wrapper contract issuer could
terminate the wrapper contract at the market value of the underlying investments
(or in the case of a traditional GIC, at the hypothetical market value based
upon a contractual formula).
Synthetic investment contracts generally impose
conditions on both the Plan and the issuer. If an event of default occurs and
is not cured, the non-defaulting party may terminate the contract. The
following may cause the Plan to be in default: a breach of material obligation
under the contract; a material misrepresentation; or a material amendment to
the Plan agreement. The issuer may be in default if it breaches a material
obligation under the investment contract; makes a material misrepresentation;
is acquired or reorganized. If, in the event of default of an issuer, the Plan
were unable to obtain a replacement seek to add additional issuers over time to
diversify the Plan’s exposure to such risk, but there is no assurance the Plan
may be able to do so. The combination of the default of an issuer and an
inability to obtain a replacement agreement could render the Plan unable to
achieve its objective of maintaining a stable contract value. The terms of an
investment contract generally provide for settlement of payments only upon
termination of the contract or total liquidation of the covered investments.
Generally, payments will be made pro-rata, based on the percentage of
investments covered by each issuer. Contract termination occurs whenever the
contract value or market value of the covered investments reaches zero or upon
certain events of default. If the contract terminates due to issuer default,
the issuer will generally be required to pay to the Plan the excess, if any, of
contract value over market value on the date of termination. If the contract
terminates when the market value equals zero, the issuer will pay the excess
of contract value over market value to the Plan to the extent necessary for the
Plan to satisfy outstanding contract value withdrawal requests. Contract
termination also may occur by either party upon election and notice.
11
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
The contracts’ aggregate fair
values were approximately $7,400,000 higher and $3,700,000 lower than the
reported contract values at December 31, 2010 and 2009, respectively.
Investments that represent 5% or more of the Master
Trust’s assets are separately identified as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
American Funds Growth Fund of America
|
|
$
|
110,901,473
|
|
|
|
$
|
102,166,361
|
|
|
|
Cummins Inc. Common Stock Fund
|
|
483,475,136
|
|
|
|
217,595,836
|
|
|
|
NTGI S & P 500 Index Fund
|
|
134,032,775
|
|
|
|
119,834,914
|
|
|
|
PIMCO Total Return Fund
|
|
86,833,427
|
|
|
|
70,895,090
|
|
|
|
Vanguard Wellington Admiral Shares Fund
|
|
208,007,294
|
|
|
|
196,574,815
|
|
|
|
Aegon Wrapped Investment Contract
|
|
114,318,432
|
|
|
|
117,095,773
|
|
|
|
Royal Bank of Canada Wrapped
|
|
|
|
|
|
|
|
|
|
Investment Contract
|
|
114,592,139
|
|
|
|
117,095,670
|
|
|
|
State Street Bank Wrapped Investment
|
|
|
|
|
|
|
|
|
|
Contract
|
|
114,609,062
|
|
|
|
117,111,459
|
|
|
|
Other
|
|
436,930,944
|
|
|
|
353,943,877
|
|
|
|
Total
|
|
$
|
1,803,700,682
|
|
|
|
$
|
1,412,313,795
|
|
|
|
|
|
|
|
|
|
|
|
12
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
Investment
income for the Master Trust for the year ended December 31, 2010 is as follows:
|
|
|
|
|
|
|
|
|
Net appreciation in fair value of investments:
|
|
|
|
|
|
Cummins Inc. Common Stock Fund
|
|
$
|
291,126,216
|
|
|
|
Cummins Inc. common stock - ESOP fund
|
|
|
|
|
|
(non-participant directed)
|
|
1,065,670
|
|
|
|
Common / collective trusts
|
|
18,247,484
|
|
|
|
Registered investment companies
|
|
89,963,060
|
|
|
|
Interest
|
|
9,672,405
|
|
|
|
Dividends
|
|
2,263,994
|
|
|
|
Dividends from Cummins Inc. common stock -
|
|
|
|
|
|
ESOP fund (non-participant directed)
|
|
21,571
|
|
|
|
|
|
|
|
4. TAX STATUS
The Plan received a favorable determination letter
dated July 19, 2002 in which the Internal Revenue Service (“IRS”) stated that
the Plan, as then designed, was in compliance with the applicable requirements
of the Internal Revenue Code (the “Code”). The Plan has been amended since
receiving that determination letter. The Company and its counsel believe that
the Plan is currently designed and being operated in compliance with the
applicable requirements of the Code. Therefore, no provision for income taxes
has been included in the Plan’s financial statements.
5. RELATED PARTY TRANSACTIONS
Certain Master Trust investments are shares of mutual
funds managed by State Street Corporation and shares of Cummins Inc. State Street
Corporation is the Master Trust trustee. Cummins Inc. is the Plan Sponsor. Hewitt
Associates, LLC serves as the Plans’ third party administrator. Blue & Co.,
LLC serves as the Plans’ auditor. JPMorgan Asset Management serves as the
Plans’ investment manager of the Stable Value fund. Transactions with these
parties qualify as party-in-interest transactions.
13
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
6. RECONCILIATION OF FINANCIAL
STATEMENTS TO FORM 5500
The following is a reconciliation of net assets
available for benefits per the financial statements to the Form 5500:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
As reported per the financial statements
|
|
$
|
244,174,793
|
|
|
|
$
|
235,089,741
|
|
|
|
Adjustment from fair value to contract value
|
|
|
|
|
|
|
|
|
|
for fully benefit-responsive investment
|
|
|
|
|
|
|
|
|
|
contracts |
|
2,531,577 |
|
|
|
(1,259,255) |
|
|
|
As reported per the Form 5500
|
|
$
|
246,706,370
|
|
|
|
$
|
233,830,486
|
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of plan interest in
Cummins Inc. and Affiliates Retirement and Savings Plans Master Trust
investment income per the financial statements to the Form 5500 for the year
ended December 31, 2010:
|
|
|
|
|
|
|
As reported per the financial statements
|
$
|
17,368,640
|
|
|
Adjustment from fair value to contract value
|
|
|
|
for fully benefit-responsive investment
|
|
|
|
contracts at December 31, 2010
|
2,531,577
|
|
|
Adjustment from fair value to contract value
|
|
|
|
for fully benefit-responsive investment
|
|
|
|
contracts at December 31, 2009
|
1,259,255
|
|
|
As reported per the Form 5500
|
$
|
21,159,472
|
|
|
|
|
7. FAIR VALUE
MEASUREMENTS
Assets that are measured at fair value are
categorized according to a fair value hierarchy that prioritizes the inputs to
valuation techniques, giving the highest priority to quoted prices in active
markets for identical assets and liabilities and the lowest priority to
unobservable value inputs. If the inputs used fall within different levels of
the hierarchy, the categorization is based upon the lowest level input that is
significant to the fair value measurement.
14
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
The hierarchy of inputs is as follows:
-
Level 1 – Unadjusted quoted
prices for identical assets and liabilities in active markets
-
Level 2 – Quoted prices for
similar assets and liabilities in active markets (other than those included in
Level 1) which are observable for the asset or liability, either directly or
indirectly
-
Level 3 – Valuations derived from
valuation techniques in which one or more significant inputs or significant
value drivers are unobservable
Fair values of assets measured on a recurring basis
at December 31, 2010 and 2009, are as follows:
| |
2010 |
|
| |
Fair |
|
|
|
|
|
|
|
|
| |
Value |
|
Level 1 |
|
Level 2 |
|
|
Level 3 |
|
| Master Trust level assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Registered investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
| companies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Target funds |
$ |
188,877,753 |
|
$ |
188,877,753 |
|
$ |
-0- |
|
$ |
-0- |
|
| Bond funds |
|
86,833,427 |
|
|
86,833,427 |
|
|
|
-0- |
|
|
-0- |
|
| Balanced funds |
|
208,007,294 |
|
|
208,007,294 |
|
|
|
-0- |
|
|
-0- |
|
| Growth funds |
|
166,618,242 |
|
|
166,618,242 |
|
|
|
-0- |
|
|
-0- |
|
| Value funds |
|
103,727,299 |
|
|
103,727,299 |
|
|
|
-0- |
|
|
-0- |
|
| Other |
|
58,926,246 |
|
|
58,926,246 |
|
|
|
-0- |
|
|
-0- |
|
| Common stocks: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cummins Inc. |
|
483,475,136 |
|
|
483,475,136 |
|
|
|
-0- |
|
|
-0- |
|
| Common/collective trusts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Index fund |
|
134,032,775 |
|
|
-0- |
|
|
|
134,032,775 |
|
|
-0- |
|
| Growth fund |
|
20,943,694 |
|
|
-0- |
|
|
|
20,943,694 |
|
|
-0- |
|
| Stable Value fund: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash equivalents |
|
8,739,183 |
|
|
8,739,183 |
|
|
|
-0- |
|
|
-0- |
|
| Wrapped bonds |
|
342,971,937 |
|
|
-0- |
|
|
|
-0- |
|
|
342,971,937 |
|
| Guaranteed investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
| contracts |
|
547,696 |
|
|
-0- |
|
|
|
547,696 |
|
|
-0- |
|
15
Cummins Inc. AND AFFILIATES
RETIREMENT AND SAVINGS PLAN
FOR BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER
31, 2010 AND 2009
| |
2009 |
| |
Fair |
|
|
|
|
|
|
|
|
| |
Value |
|
Level 1 |
|
Level 2 |
|
|
Level 3 |
|
| Master Trust level assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Registered investment |
|
|
|
|
|
|
|
|
|
|
|
|
|
| companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Target funds |
$ |
144,389,845 |
|
$ |
144,389,845 |
|
$ |
-0- |
|
$ |
-0- |
|
| Bond funds |
|
70,895,090 |
|
|
70,895,090 |
|
|
|
-0- |
|
|
-0- |
|
| Balanced funds |
|
196,574,815 |
|
|
196,574,815 |
|
|
|
-0- |
|
|
-0- |
|
| Growth funds |
|
169,316,091 |
|
|
169,316,091 |
|
|
|
-0- |
|
|
-0- |
|
| Value funds |
|
96,930,096 |
|
|
96,930,096 |
|
|
|
-0- |
|
|
-0- |
|
| Other |
|
37,764,446 |
|
|
37,764,446 |
|
|
|
-0- |
|
|
-0- |
|
| Common stocks: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cummins Inc. |
|
217,595,836 |
|
|
217,595,836 |
|
|
|
-0- |
|
|
-0- |
|
| Common/collective trusts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Index fund |
|
119,834,914 |
|
|
-0- |
|
|
|
119,834,914 |
|
|
-0- |
|
| Stable Value fund: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash equivalents |
|
7,709,760 |
|
|
7,709,760 |
|
|
|
-0- |
|
|
-0- |
|
| Wrapped bonds |
|
351,302,902 |
|
|
-0- |
|
|
|
-0- |
|
|
351,302,902 |
|
The valuation methodology used to measure the fair
values of registered investment companies and common stocks were derived from
quoted market prices in active markets. The valuation techniques used to
measure fair value of the common/collective trusts and Stable Value fund are
included in Notes 2 and 3, respectively.
Following is a progression of the fair value of the Level
3 assets (wrapped bonds) included in the Master Trust for the year ended December
31, 2010 and 2009:
| |
|
|
2010 |
|
|
2009 |
|
| |
|
|
|
|
|
|
|
| |
Balance, beginning of year |
$ |
351,302,902 |
|
$ |
327,321,173 |
|
| |
|
|
|
|
|
|
|
| |
Issuances, repayments and settlements, net |
|
(30,000,000) |
|
|
(9,000,000) |
|
| |
|
|
|
|
|
|
|
| |
Unrealized gains related to instruments |
|
|
|
|
|
|
| |
still held at reporting date |
|
21,669,035 |
|
|
32,981,729 |
|
| |
|
|
|
|
|
|
|
| |
Balance, end of year |
$ |
342,971,937 |
|
$ |
351,302,902 |
|
16
