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Actionable news in CMI: CumMINS Inc,

Cummins: Executive Director - Corporate Communications

The following excerpt is from the company's SEC filing.

(317) 610-2480

For Immediate Release

October 27, 2015

Cummins Announces Actions to Respond to Slowdown in Global Markets and Reports Third Quarter 2015 Results

Third quarter revenues of $4.6 billion, EBIT of 12.5 percent of sales

Full year outlook revised down with revenue expected to be flat to down 2 percent and EBIT to be in the range of 12.75 to 13.0 percent of sales

COLUMBUS, IND. - Cummins Inc. (NYSE: CMI) today announced restructuring and cost reduction actions to respond to a slowdown in global markets and lowered its outlook for 201 5. The Company expects to reduce its professional workforce by up to 2,000 people, with the majority completed by the end of this year. These actions are expected to deliver annualized savings in the range of $160 million to $200 million and the Company will record pre-tax costs of between $70 million and $90 million associated with the workforce reduction in the fourth quarter of 2015. Adjustments to manufacturing capacity are already being made on a facility-by-facility basis and the Company will evaluate if more significant restructuring actions are required in the coming weeks and months.

“We are taking difficult but necessary actions to lower costs in the face of weak demand in many of our markets.” said Tom Linebarger, Chairman and Chief Executive Officer, Cummins Inc. “Global off highway and power generation markets have been weak for some time and are worsening. Industry orders in key end markets in Brazil and China are at multi-year lows and showing no signs of improvement in the near-term. Given the uncertainty in the global economy, we expect challenging conditions to persist for some time. We have a very experienced leadership team at Cummins that knows how to manage effectively through periods of weak demand and ensure that the Company emerges stronger, with higher profitability and stronger leadership positions in our largest markets, as it has in prior cycles.”

Third quarter revenue of $4.6 billion decreased six percent from the same quarter in 2014. Currency negatively impacted sales by four percent compared to last year, primarily due to a stronger U.S. dollar.

Weaker demand in global off highway and power generation markets was partially offset by distributor acquisitions in North America.

Revenues in North America increased four percent while international sales declined by 18 percent. Within international markets, lower revenues in Brazil, Europe and China were partially offset by growth in India.

Earnings before interest and taxes (EBIT) decreased in the third quarter to $577 million, or 12.5 percent of sales, down from $684 million or 14.0 percent of sales a year ago.

Net income attributable to Cummins was $380 million ($2.14 per diluted share) in the third quarter, compared to $423 million ($2.32 per diluted share) a year ago. The tax rate in the third quarter of 2015, including discrete...