Cummins Inc. Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 25, 2011

The following table summarizes our financial instruments recorded at fair value in our Condensed Consolidated Balance Sheets at September 25, 2011:

	Fair Value Measurements Using
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
In millions	(Level 1)		(Level 2)		(Level 3)	Total
Available-for-sale debt securities:
Debt mutual funds	$	31	$	83	$	$	114
Bank debentures			79			79
Certificates of deposit			67			67
Government debt securities-non-U.S.			3			3
Corporate debt securities			2			2
Total available-for-sale debt securities	31		234			265

Available-for-sale equity securities:
Financial services industry	8					8
Total available-for-sale equity securities	8					8

Derivative assets:
Interest rate contracts			81			81
Total derivative assets			81			81

Derivative liabilities:
Commodity swap contracts			17			17
Foreign currency forward contracts			11			11
Total derivative liabilities			28			28

Total	$	39	$	287	$	$	326

The following table summarizes our financial instruments recorded at fair value in our Condensed Consolidated Balance Sheets at December 31, 2010:

	Fair Value Measurements Using
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
In millions	(Level 1)		(Level 2)		(Level 3)	Total
Available-for-sale debt securities:
Debt mutual funds	$	75	$	105	$	$	180
Bank debentures			85			85
Certificates of deposit			59			59
Government debt securities-non-U.S.			3			3
Corporate debt securities			2			2
Total available-for-sale debt securities	75		254			329

Available-for-sale equity securities:
Financial services industry	10					10
Total available-for-sale equity securities	10					10

Derivative assets:
Commodity swap contracts			21			21
Interest rate contracts			41			41
Total derivative assets			62			62

Total	$	85	$	316	$	$	401