Cummins Inc. Holds Annual Meeting

Announces Appointment of PricewaterhouseCoopers LLP as New External Auditor COLUMBUS, Ind.--April 2, 2002--Speaking at the annual shareholders meeting today Cummins Chairman and Chief Executive Officer Tim Solso announced the selection of a new auditor, reviewed Cummins Inc. business results for 2001, and outlined the opportunities for the company in 2002.

In response to recent events surrounding Arthur Andersen LLP, the Cummins Board of Directors has voted to rescind the appointment of Andersen and, instead, has appointed PricewaterhouseCoopers LLP as the Company's external auditor. This change will be effective immediately. PricewaterhouseCoopers will assume all external auditing responsibilities.

Moving into the review of business performance in 2001, Mr. Solso stated that ``last year was the most difficult and demanding year for Cummins that I can remember. Virtually all of Cummins markets have been in a recession for the past twenty months.''

Cummins sales in 2001 were five point seven billion dollars; almost a billion dollars lower than sales in 2000. This represents a fourteen percent decrease in overall revenue. Engine Business sales accounted for fifty-two percent of Cummins gross revenue. Twenty-four percent of Cummins sales came from Power Generation Business. Cummins Filtration Business accounted for fifteen percent of Cummins total sales in 2001. Our International Distributors represented nine percent of the company's total business unit sales in 2001.

Domestic sales were down nineteen percent from 2000, representing fifty-four percent of Cummins total revenue in 2001. This unprecedented sales reduction resulted from recessionary market conditions that began in the middle of 2000 and were further impacted by the September 11th terrorist attacks. International revenue decreased seven percent in 2001 versus 2000, representing forty-six percent of Cummins total sales.

In 2001, Cummins reported a loss for the year of $18 million, or $.47 cents per share, excluding a pre-tax charge of $125 million for costs associated with restructuring in the second quarter. Including the charge, Cummins lost $102 million, or $2.66 per share for the full year 2001. Despite the loss, Cummins reported profits in each of the last three-quarters of 2001 on substantially lower sales.

``Despite the severe conditions in 2001, we were able to meet our financial commitments and deliver an operating profit in the last three quarters,'' said Solso. ``This represents a significant improvement in performance by historical standards and is the result of improvements in our cost structure and the change to a performance ethic among all employees.''

Cummins expects that the business environment in 2002 will not be significantly better than last year. Cummins will continue its relentless cost reduction and cash management throughout 2002. However, Cummins is well positioned and prepared to take advantage of a rebound in the economy.

In closing, Mr. Solso shared his reasons for remaining confident in Cummins future. ``We did the hard work to lower our cost structure and we will continue to do so. Therefore, we are positioned to take advantage of an economic upturn in each of our markets,'' he said. ``In addition to the potential for market rebounds, Cummins has significant new growth opportunities. Five, exciting growth opportunities for Cummins in 2002 are; international distributors and service, light duty automotive, high-horsepower engines, power generation, and the recently announced Emission Solutions business of Fleetguard.''

A global power leader, Cummins Inc., is a corporation of complementary business units that design, manufacture, distribute, and service electrical power generation systems, engines, and related technologies, including fuel systems, controls, air handling, filtration, and emissions solutions. Headquartered in Columbus, Indiana (USA), Cummins serves its customers through more than 500 company-owned and independent distributor locations in 131 countries and territories. With 24,900 employees worldwide, Cummins reported sales of $5.7 billion in 2001. Press releases by fax can be requested by calling News On Demand (toll free) at 888-329-2305. Cummins home page can be found at www.cummins.com.