Annual report pursuant to Section 13 and 15(d)

SALES OF ACCOUNTS RECEIVABLE

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SALES OF ACCOUNTS RECEIVABLE
 12 Months Ended
Dec. 31, 2011
SALES OF ACCOUNTS RECEIVABLE  
SALES OF ACCOUNTS RECEIVABLE

NOTE 21. SALES OF ACCOUNTS RECEIVABLE

        We have a trade receivables facility (subject to renewal annually) with a financial institution to sell trade receivables from time to time to Cummins Trade Receivables, LLC (CTR), a wholly-owned special purpose subsidiary, for the purpose of obtaining credit secured by such receivables from one or more commercial paper conduit and committed institutional lenders. To support outstanding advances under the agreement, we sell new receivables to CTR as they arise. Receivables sold to CTR are included in "Receivables, net" on our Consolidated Balance Sheets. The amount of aggregate advances that can be outstanding under the agreement at any point in time is limited to the lesser of $250 million or, with certain adjustments, the amount of eligible receivables held by CTR. There are no provisions in the agreement that require us to maintain a minimum investment credit rating; however, the terms of the agreement contain the same financial covenants as our revolving credit facility. In accordance with FASB Standards for transfer of financial assets, any activity under our receivable sales program will be accounted for as secured borrowings. As of December 31, 2011, the amount available under the agreement was $209 million and no advances were outstanding under the agreement.

        CTR is a separate legal entity from Cummins Inc. and each of its affiliates and its assets and credit are not available to satisfy our debts or obligations or the debts and obligations of any other entity. CTR's assets are listed separately on its balance sheet on a stand-alone basis. CTR's assets will be available first and foremost to satisfy claims of its creditors.

        No accounts receivable sold to CTR were written off during 2011, 2010 or 2009. The sold receivables servicing portfolio, which is included in receivables and the proceeds from the sale of receivables and other related cash flows are as follows:

 
   As of and for the
years ended December 31, 		 
In millions
   2011   2010   2009  

Sold receivables servicing portfolio

   $ 578   $ 416   $ 806  

Receivables sold to special purpose subsidiary

     5,802     3,877     5,424  

Collections reinvested in special purpose subsidiary

     5,640     4,267     5,270  

Servicing fees and interest

     2     4     3