Cummins Increases Dividend, Announces Share Re-Purchase

COLUMBUS, Ind.--July 11, 2006--Cummins Inc. Board of Directors today approved a 20 percent increase in the quarterly cash dividend paid on common stock to 36 cents per share, up from 30 cents per share.

The dividend is payable on September 1 to shareholders of record on August 18.

The Board also authorized the Company to acquire an additional 2 million shares of Cummins common stock. In June, Cummins completed the purchase of $100 million worth of common stock that began in September 2005. The Company has approximately 52 million shares outstanding.

"Cummins is committed to creating value for its shareholders," said Tim Solso, Cummins Chairman and Chief Executive Officer. "Today's actions are indicative of the Board's confidence in the Company's continued ability to produce strong financial returns for all its stakeholders."

Since 2003, Cummins has produced an average annual total return (share price appreciation plus dividend) of approximately 50 percent - triple that of both the S&P 500 and the Company's peer group. Cummins stock closed at an all-time high of $122.25 on June 30 and has appreciated more than 30 percent since the beginning of 2006.

The Company also recently won additional business from one of its key customers, PACCAR. Beginning in January 2007, Cummins will be the sole supplier of 6- and 8-liter medium-duty truck engines to PACCAR, which manufactures trucks under the Kenworth and Peterbilt names.

"Over the past several years, we have worked hard to reshape our company to become more results-oriented and committed to turning a greater share of our sales into profits. At the same time, we have focused our energies on providing outstanding customer support," Solso said. "We're proud that we were able to maintain our dividend through difficult times in the early part of this decade. Our business is strong and the future looks bright, so we're pleased to be able to provide this additional value to our shareholders."

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. Cummins reported net income of $550 million on sales of $9.9 billion in 2005.