Year in Review

2007 was an outstanding year for Cummins. This record-setting performance in the face of significant challenges validates our message that Cummins truly has become a more diversified, global power leader. Most importantly, our efforts continue to benefit our shareholders, who have enjoyed an average annual return of 58 percent on their investment over the past five years.

Cummins’ sales rose 15 percent to $13.05 billion. Net income was $739 million, or $3.70 a share, a 3 percent increase compared to the previous year. Earnings Before Interest and Taxes (EBIT) was $1.23 billion, or 9.4 percent of sales, representing a 4 percent increase from 2006.

We achieved these record results despite the expected significant drop in the North American heavy-duty truck market as a result of emissions changes that took effect January 1, 2007. Industry-wide sales in that market declined nearly 50 percent in 2007, but Cummins’ increased market share as well as strong growth across most of the rest of the Company’s businesses and regions more than offset the decrease.

All four of the Company’s operating segments – Engine, Power Generation, Distribution and Components – reported record sales for the year.

The Company expects to extend its record financial performance to a fifth straight year in 2008.