Key questions from the first quarter earnings call conducted by Cummins Inc. on April 30, 2008.

Jamie Cook (Credit Suisse): You are increasing your sales forecast to up 10% to 15%, which is higher than the previous year. EBIT forecast is not unchanged in your first quarter margins and engine were good at 8.8%, which could imply lower margins in the back-half of the year. Was there anything unusual on the first quarter margin and why would profitability be declining in the remaining nine months?

Tim Solso: There was nothing unusual in the first quarter. If we look at some of the challenges for the rest of the year, first of all, we anticipate some commodity increases. Our consumer markets and the pickup truck market is down considerably and I think our view is if there is a continued risk in those markets the volumes in Mexico which have been relatively strong will change in the second half of the year and that is because there are emission changes in the middle of the year so you have got a pre-buy no-buy kind of situation there. We continue to invest considerable amounts in the four engine platforms that we are developing right now. You will see some of the JV income lower in the second half as those investments are made from those things. Those are issues that allow us to say that we are going to meet our targets but we do not want to say that we are going to do better than that.

Jean Blackwell: If you look at joint venture in Mexico, but China also has an emission standard that goes into effect from the second half of the year that will impact the joint venture earnings in the engine business and commodity impact was not as great in the first quarter but we anticipate a larger impact in the rest of the year.

Jamie Cook (Credit Suisse): Could you expand on the same point for the yearly guidance?

Jean Blackwell: If you compare first quarter to first quarter, last year it was a low quarter. In some markets, there are some capacity constraints that will take a while, but third there is a lot of investment particularly in the second half of the year in lot of our growth platforms.

Jamie Cook (Credit Suisse): Did your first quarter come in line basically where you thought even though you do not give quarterly guidance?

Tim Solso: We are pleased with the first quarter.

Eli Lustgarten (Longbow Research): Can you quantify the impact of foreign currency on revenue and earnings?

Jean Blackwell: At the top line growth, it was about $120 million and about $1 million positive to EBIT. It was fairly negative to the bottom line but somewhat significant on the top line.

Eli Lustgarten (Longbow Research): In this forecast, you have currency changing at all as you go forward. How do you handle that in the outlook?

Tim Solso: We are not in the business of forecasting which way the currencies are going to move.

Jean Blackwell: We generally do not build in lots of movements in our forecast going forward.

Eli Lustgarten (Longbow Research): Is your 12% top line sort of currency neutral at this point?

Tim Solso: Yes.

Andy Casey (Wachovia Securities): How long do you think the input cost inflation on the Power Generation is going to take to recover that with pricing because it looks like international demand remains strong and then North America mix, but on the upper end strong?

Tom Linebarger: We got pricing increases in place already and there we will see benefits from even next quarter. We will begin to restore some of the margin drop next quarter and throughout the year. It would take us long. Across all of our markets we put in price increases. Some of them start later than others, but are in the first half of the year.

Andy Casey (Wachovia Securities): Can you talk about your ability to price in some of the Industrial Engines markets?

Tim Solso: We had success with Tier 3 and the excitement we have created around our approach to Tier 4 and the clarity we delivered to OEMs about what we are going to do and how we are going to do it has also created its own level of excitement in terms of conversations with OEMs as we looked grow share on that side of the business as a result of what we are doing there as well.