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

Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVES (Tables)

DERIVATIVES (Tables)

3 Months Ended

Apr. 01, 2012

Outstanding foreign currency forward contracts

	Notional amount in millions
	April 1,	December 31,
Currency denomination	2012	2011
United States Dollar (USD)	177	181
British Pound Sterling (GBP)	305	347
Euro (EUR)	14	47
Singapore Dollar (SGD)	11	20
Indian Rupee (INR)	1,595	1,701
Japanese Yen (JPY)	2,193	3,348
Canadian Dollar (CAD)	34	39
South Korea Won (KRW)	35,387	36,833
Chinese Renmimbi (CNY)	89	61

Outstanding commodity swap contracts entered to hedge certain raw material purchases

Dollars in millions	April 1, 2012			December 31, 2011
Commodity	Notional Amount		Quantity	Notional Amount		Quantity
Copper	$	44	5,265 metric tons (1)	$	78	9,220 metric tons (1)
Platinum	72		44,054 troy ounces (2)	84		50,750 troy ounces (2)
Palladium	7		10,894 troy ounces (2)	5		7,141 troy ounces (2)

(1)A metric ton is a measurement of mass equal to 1,000 kilograms.

(2)A troy ounce is a measurement of mass equal to approximately 31 grams.

Gains and losses on interest rate swap

	Three months ended
In millions	April 1, 2012					March 27, 2011
Income Statement Classification	Gain/(Loss) on Swaps			Gain/(Loss) on Borrowings		Gain/(Loss) on Swaps			Gain/(Loss) on Borrowings
Interest expense	$	(12	)	$	12	$	(8	)	$	8

Location and amounts of gains and losses for derivative instruments classified as cash flow hedges

		Three months ended
	Location of Gain/(Loss)	Amount of Gain/(Loss) Recognized in AOCL on Derivative (Effective Portion)				Amount of Gain/(Loss) Reclassified from AOCL into Income (Effective Portion)
In millions	Reclassified into Income	April 1,		March 27,		April 1,			March 27,
Derivatives in Cash Flow Hedging Relationships	(Effective Portion)	2012		2011		2012			2011
Foreign currency forward contracts	Net sales	$	8	$	4	$	(2	)	$	1
Commodity swap contracts	Cost of sales	13		2		(3		)	6
Total		$	21	$	6	$	(5	)	$	7

Location and amounts of gains and losses for derivative instruments that are not classified as hedges

		Three months ended
In millions	Location of Gain/(Loss)	Amount of Gain/(Loss) Recognized in Income on Derivatives
Derivatives Not Designated as	Recognized in Income	April 1,			March 27,
Hedging Instruments	on Derivatives	2012			2011
Foreign currency forward contracts	Cost of sales	$	(3	)	$	(4	)
Foreign currency forward contracts	Other income (expense), net	14			5
Commodity swap contract	Cost of sales	(2		)	—

Location and fair value of derivative instruments

	Derivative Assets
	Fair Value
	April 1,		December 31,
In millions	2012		2011		Balance Sheet Location
Derivatives designated as hedging instruments
Foreign currency forward contracts	$	2	$	—	Prepaid expenses and other current assets
Commodity swap contracts	1		—		Prepaid expenses and other current assets
Interest rate contract	70		82		Other assets
Total derivative assets	$	73	$	82

	Derivative Liabilities
	Fair Value
	April 1,		December 31,
In millions	2012		2011		Balance Sheet Location
Derivatives designated as hedging instruments
Foreign currency forward contracts	$	—	$	7	Other accrued expenses
Commodity swap contracts	—		16		Other accrued expenses
Total derivatives designated as hedging instruments	—		23

Derivatives not designated as hedging instruments
Foreign currency forward contracts	1		1		Other accrued expenses
Commodity swap contracts	—		6		Other accrued expenses
Total derivatives not designated as hedging instruments	1		7
Total derivative liabilities	$	1	$	30

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References + Details

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References + Details