UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 1

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2005

Commission File Number 1-4949

CUMMINS INC.

500 Jackson Street
Box 3005
Columbus, Indiana 47202-3005

(Address of principal executive offices)

Telephone (812) 377-5000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ý    No  o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  o    No  ý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o    No  ý

The aggregate market value of the voting stock held by non-affiliates was approximately $3.4 billion at June 26, 2005.

As of February 5, 2006, there were 46,455,939 shares outstanding of $2.50 par value common stock.

Documents Incorporated by Reference

Portions of the registrant’s definitive Proxy Statement filed with the Securities and Exchange Commission pursuant to Regulation 14A are incorporated by reference in Part III of this Form 10-K.

Explanatory Note

We are filing this amendment to include the financial statements of Dongfeng Cummins Engine Company Limited, a 50% owned unconsolidated subsidiary, which are required to be filed under Regulation S-X by March 31, 2006. The financial statements were excluded from the annual report to shareholders by Rule 14a-3(b).

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)          The following documents are filed as part of this report:

(1)                                  Financial Statements

•                  Management’s Report to Shareholders*

•                  Report of Independent Registered Public Accounting Firm*

•                  Consolidated Statements of Earnings*

•                  Consolidated Balance Sheets*

•                  Consolidated Statements of Cash Flows*

•                  Consolidated Statements of Shareholders’ Equity*

•                  Notes to Consolidated Financial Statements*

•                  Selected Quarterly Financial Data*

(2)                                  Financial Statement Schedules

•                  Financial Statements of Dongfeng Cummins Engine Company Limited (financial statements required by Regulation S-X to be filed by March 31, 2006, which are excluded from the annual report to shareholders by Rule 14a-3(b))

•                  Report of Independent Auditors

•                  Statements of Operations

•                  Balance Sheets

•                  Statements of Cash Flows

•                  Statements of Shareholders’ Equity

•                  Notes to the Financial Statements

* Previously filed

(b)         Exhibits

•                  Exhibit 23.1. Consent of Independent Auditor (filed herewith).

•                  Exhibit 31(a). Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

•                  Exhibit 31(b). Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

•                  Exhibit 32. Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

(c)          The financial statements required by Regulation S-X which are excluded from the annual report to shareholders by Rule 14a-3(b), including (1) separate financial statements of subsidiaries not consolidated and fifty percent or less owned persons, (2) separate financial statements of affiliates whose securities are pledged as collateral, and (3) schedules, are filed under Item 15(a) of this Report which are incorporated herein by reference.

FINANCIAL STATEMENT SCHEDULES

Financial Statements of Dongfeng Cummins Engine Company Limited

(Financial statements required by Regulation S-X which are excluded from the annual report to shareholders by Rule 14a-3(b))

DONGFENG CUMMINS ENGINE COMPANY LIMITED

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 AND 2004 AND FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

Report of Independent Auditors

To the Board of Directors and Shareholders of Dongfeng Cummins Engine Company Limited:

We have audited the accompanying balance sheets of Dongfeng Cummins Engine Company Limited (the “Company”) as of December 31, 2005 and 2004, and the related statements of operations, of cash flows and of shareholders’ equity for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Dongfeng Cummins Engine Company Limited at December 31, 2005 and 2004 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

DONGFENG CUMMINS ENGINE COMPANY LIMITED

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

IN RENMINBI

The accompanying notes are an integral part of these financial statements.

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DONGFENG CUMMINS ENGINE COMPANY LIMITED

BALANCE SHEETS

AT DECEMBER 31, 2005 AND 2004

IN RENMINBI

The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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DONGFENG CUMMINS ENGINE COMPANY LIMITED

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

IN RENMINBI

The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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DONGFENG CUMMINS ENGINE COMPANY LIMITED

STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

IN RENMINBI

The accompanying notes are an integral part of these financial statements.

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DONGFENG CUMMINS ENGINE COMPANY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

1.                                    Organization and principal activities

Dongfeng Cummins Engine Company Limited (the “Company”) is a sino-foreign equity joint venture amongst Cummins Engine Company, Inc. (“Cummins USA”), Cummins (China) Investment Co., Ltd. (“CCI”) and Dongfeng Automobile Co., Ltd. (“Dongfeng Auto”) established under the relevant laws and regulations of the People’s Republic of China (the “PRC”).

The Company, established on May 14, 1996, is engaged in the manufacture and sale of diesel engines, related parts and the provision of after-sale services.

On February 22, 2003, Cummins USA, CCI and Dongfeng Auto reached an agreement (“the Agreement”) to increase the Company’s paid-in capital. According to the Agreement, Dongfeng Auto increased its interest in the Company by contributing certain fixed assets and construction in progress of its Diesel Engine Branch, while Cummins USA increased its interest in the Company by contributing cash and certain fixed assets and construction in progress of its subsidiary, Cummins (Xiangfan) Machining Co., Ltd. Subsequent to the capital increase, Cummins USA, CCI and Dongfeng Auto each holds 40%, 10% and 50%, respectively, of the paid-in capital of the Company.

The Company has a term of 35 years from the date of establishment and may be extended subject to the unanimous approval of the Board of Directors and the approval of the relevant PRC authorities.

2.                                    Summary of significant accounting policies

Basis of presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue recognition

The Company recognizes revenues on the sale of products, net of estimated costs of returns, allowances and sales incentives, when it is realized or realizable, which generally occurs when persuasive evidence of an arrangement exists, the product has been shipped and legal title and all risks of ownership have been transferred, customer acceptance has occurred and payment is reasonably assured.

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Foreign currency translation

The Company’s financial records are maintained in Renminbi (“RMB”), the functional currency. Transactions in foreign currencies are translated into Renminbi at the exchange rates prevailing at the transaction dates. Monetary assets and liabilities expressed in foreign currencies at the balance sheet date are translated into Renminbi at the exchange rates at the balance sheet date. Exchange differences arising in these cases are recorded in the Statement of Operations.

Income tax accounting

The Company determines the deferred tax provision using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company also recognizes future tax benefits associated with tax loss and credit carry forwards as deferred tax assets. Deferred tax assets are reduced by a valuation allowance to the extent there is uncertainty as to their ultimate realization. The Company measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to be settled or recovered.

Cash and cash equivalents

Cash equivalents are defined as short-term, highly liquid investments with an original maturity of 90 days or less at the time of purchase. The carrying amounts reflected in the balance sheet for cash and cash equivalents approximate fair value due to the short-term maturity of these investments.

Inventories

Inventories are stated at the lower of cost or market value. Inventory cost calculated on the weighted average basis comprises materials, direct labor and the manufacturing overhead expenditures. Inventory reserves include provisions for obsolete and excess inventory based on management’s forecasts of demand over specific future time horizons and reserves to value our inventory at the lower of cost or market which rely on forecasts of average selling prices (ASPs) in future periods.

Restricted bank deposit

The restricted bank deposit represents the pledge for letter of credit. Reclassification has been made to prior year balance of Rmb 455,814 from cash and cash equivalents to restricted bank deposit in order to conform to the current year presentation.

Investments in joint ventures

The equity method is used to account for the Company’s investments in joint ventures in which the Company has the ability to exercise significant influence, generally represented by common stock ownership or partnership equity of at least 20 percent but not more than 50 percent. Generally, under the equity method, original investments in these entities are recorded at cost and subsequently adjusted by the Company’s share of equity in earnings or losses after the date of acquisition.

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Investment amounts in excess of the Company’s share of an investee’s assets are amortized over the life of the related asset creating the excess. If the excess is goodwill, then it is not amortized. Equity in earnings or losses of each investee is recorded according to the Company’s level of ownership; if losses accumulate, the Company records its share of losses until the investment has been fully depleted. When the investment has been fully depleted, the Company recognizes additional losses only when the Company is the primary funding source.

The Company eliminates (to the extent of its ownership percentage) the profit in inventory held by its equity method investees that has not yet been sold to a third party. The Company’s investments are classified as “Investments in and advances to equity investees” in the Balance Sheets. The Company’s shares of the result from joint ventures are reported in the Statements of Operations as “Equity on income (loss) from investees”.

Property, plant and equipment, net

Property, plant and equipment are recorded at costs. Property, plant and equipment are depreciated over their estimated useful lives on a straight-line basis, taking into account their residual value which is estimated at 10% of cost. The applicable useful lives of property, plant and equipment are as follows:

Major additions and betterments are capitalized and depreciated over their estimated useful lives and repairs and maintenance expenses are charged to the Statement of Operations in the period incurred.

Upon retirement or other disposal of fixed assets, the costs and related amounts of accumulated depreciation are reversed from the asset and accumulated depreciation accounts, respectively. The difference, if any, between the net asset value and the proceeds is adjusted to earnings.

Construction in progress represents capital assets under construction or being installed and is stated at cost. Cost comprises original cost of plant and equipment, installation, construction and other direct costs which include interest costs on specific borrowings used to finance the capital assets, prior to the date of reaching the expected usable condition. Construction in progress is transferred to the property, plant and equipment account and depreciation commences when the asset has been substantially completed and reaches the expected usable condition.

No interest cost was capitalized in 2005 (2004: nil).

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Impairment of long-lived assets

The Company reviews long-lived assets for possible impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. The Company asseses the recoverability of the carrying value of the long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment of a long-lived asset or asset group exists when the expected future pre-tax cash flows (undiscounted and without interest charges) estimated to be generated by the asset or asset group is less than its carrying value. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is measured based on the difference between the estimated fair value and carrying value of the asset or asset group. Assumptions and estimates used to estimate cash flows in the evaluation of impairment and the fair values used to determine the impairment are subject to a degree of judgment and complexity. Any changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets and could result in an impairment charge.

Intangible assets

Intangible assets with finite useful lives are subject to amortization. Intangible assets are presented at cost and are amortized on the straight-line basis over their estimated useful lives. The applicable useful lives are as follows:

Operating leases

Payments made under operating leases are expensed on a straight-line basis over the lease periods of the leases.

Product coverage

The Company charges the estimated costs of product coverage programs, other than product recalls, to earnings at the time products are shipped to customers. The Company uses historical experience of product coverage programs to estimate the remaining liability for various product coverage programs. As a result of the uncertainty surrounding the nature of product recall programs, the liability for such programs is recorded when the recall action is announced. The liability for these programs is reviewed and assessed on a quarterly basis.

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Below is the summary of the activities of the product coverage liability account for the years ended December 31, 2005, 2004 and 2003:

Allowance for doubtful accounts

The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable. The Company determines the allowance based on historical collection experience and by performing an analysis of the accounts receivable in light of the current economic environment. The Company reviews allowance for doubtful accounts on a regular basis. In addition, when necessary, the Company provides an allowance for the full amount of specific accounts deemed to be uncollectible. Account balances are charged off against the allowance in the period in which the Company determines that it is probable the receivable will not be recovered. The activities in the allowance for doubtful accounts for the years ended December 31, 2005, 2004 and 2003 were as follows:

Research and development

Research and development costs are charged to operations as incurred. For the year ended December 31, 2005, the Company incurred research and development costs amounting to RMB34,963,569 (2004: RMB7,770,672; 2003:RMB4,274,654).

Shipping and handling

Shipping and handling costs are included in selling expenses. For the year ended December 31, 2005, the Company incurred shipping and handling costs amounting to RMB18,266,443 (2004: RMB13,873,150; 2003: RMB7,537,492).

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3.                                    Related party transactions

The Company purchases products and components from related parties, and sells products and components to related parties. Related party transfer prices may differ from normal selling prices. In accordance with the provision of various agreements, certain products transferred are priced at cost, some are priced on a cost-plus basis, and others are priced at market value.

The following table lists the major related parties and their relationship with the Company:

The following table summarizes related party sales for the years ended December 31, 2005, 2004 and 2003:

Dongfeng Auto, a subsidiary of Dongfeng Motor, is a major customer of the Company for 6B engines. The selling price to Dongfeng Auto is determined and adjusted on a quarterly basis. The adjustment to the selling price is not applied retrospectively to previous quarter’s sales. Selling price to Dongfeng Auto may differ from that to other customers.

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The following table summarizes related party purchases included in “Cost of sales” in the Statement of Operations for the years ended December 31, 2005, 2004 and 2003:

The following table summarizes other related party transactions for the years ended December 31, 2005, 2004 and 2003:

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The following tables summarizes significant balances with related party:

4.                                    Notes receivable

All notes receivable are issued by banks and due within 1 - 6 months.

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5.                                    Inventories

Inventories are composed of the following: