SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
_________________
CUMMINS ENGINE COMPANY, INC.
(Name of issuer of the securities held pursuant to the plan)
Commission File Number 1-4949.
_______
Incorporated in the State of Indiana I.R.S. Employer Identification
No. 35-0257090
500 Jackson Street, Box 3005, Columbus, Indiana 47202-3005
(Address of Principal Executive Office)
Telephone Number: (812) 377-5000
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
(Full title of the plan)
<PAGE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
INDEX TO FINANCIAL STATEMENTS
Page
____
Report of Independent Public Accountants 3
Combining Statements of Net Assets by Plan 4-5
Combining Statements of Changes in Net Assets by Plan 6-7
Combining Statements of Net Assets by Fund 8-9
Combining Statements of Changes in Net Assets by Fund 10-11
Notes to Financial Statements 12-17
Schedule
________
Assets Held for Investment Purposes I
Reportable Transactions II
Matching Contribution Formulas III
Employing Locations by Plan IV
Loans or Fixed Income Obligations V
Exhibit
_______
Consent of Independent Public Accountants 23
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________
To the Pension Policy Committee
of Cummins Engine Company, Inc.:
We have audited the accompanying combining statements of net assets
by plan and by fund, of the CUMMINS ENGINE COMPANY, INC. AND
AFFILIATES RETIREMENT AND SAVINGS PLANS (the Plans) as of December
31, 1996 and 1995, and the related statements of changes in net
assets by plan and by fund, for the years ended December 31, 1996
and 1995. These financial statements and the schedules referred to
below are the responsibility of the Plans' management. Our
responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. 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 net assets of the Plans as of
December 31, 1996 and 1995, and the changes in the net assets for
the years ended December 31, 1996 and 1995, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes, reportable
transactions, matching contribution formulas, employee locations by
plan, and loans or fixed income obligations are presented for the
purpose of additional analysis and are not a required part of the
basic financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The Fund Information in the statement of net
assets and the statement of changes in net assets is presented for
purposes of additional analysis rather than to present the net
assets and changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in
all material respects in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 20, 1997.
<PAGE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF NET ASSETS BY PLAN
DECEMBER 31, 1996
(stated in OOO's)
<TABLE>
<CAPTION>
Salaried Bargaining Onan Lubricon
CDC TOTAL
________ __________ _______ ________
_______ ________
<S> <C> <C> <C> <C>
<C> <C>
Assets
______
Cash and investments:
The Northern Trust Company
Short-Term Investment Fund $ 1,134 $ - $ - $ -
$ - $ 1,134
Cummins Engine Company, Inc.
Fixed Income Fund 89,808 111,753 19,473 68
5,920 227,022
Vanguard Wellington Fund 77,360 49,591 24,290 74
4,352 155,667
Vanguard U.S. Growth Fund 45,475 17,367 13,167 91
3,182 79,282
Vanguard Index Trust Fund 53,581 23,567 15,973 105
3,323 96,549
Vanguard Explorer Fund 9,192 2,262 2,179 43
411 14,087
Vanguard International Fund 6,971 1,335 1,292 33
312 9,943
Cummins Engine Company, Inc.
Common Stock 111,725 5,847 2,383 18
858 120,831
Participant Loans 5,919 4,084 1,734 21
954 12,712
________ ________ _______ ____
_______ ________
Total cash and investments 401,165 215,806 80,491 453
19,312 717,227
________ ________ _______ ____
_______ ________
Receivables:
Employer contributions 3,555 1,332 262 21
562 5,732
Employee contributions 1,411 1,384 436 3
239 3,473
Employee loan repayments 274 208 85 1
65 633
Accrued interest 4 - - -
- - 4
________ ________ _______ ____
_______ ________
Total receivables 5,244 2,924 783 25
866 9,842
________ ________ _______ ____
_______ ________
Total assets 406,409 218,730 81,274 478
20,178 727,069
________ ________ _______ ____
_______ ________
Liabilities
___________
Interest payable 2,888 - - -
- - 2,888
Note payable - ESOP 66,550 - - -
- - 66,550
________ ________ _______ ____
_______ ________
Total liabilities 69,438 - - -
- - 69,438
________ ________ _______ ____
_______ ________
Net Assets $336,971 $218,730 $81,274 $478
$20,178 $657,631
________ ________ _______ ____
_______ ________
________ ________ _______ ____
_______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF NET ASSETS BY PLAN
DECEMBER 31, 1995
(stated in OOO's)
<TABLE>
<CAPTION>
Salaried Bargaining Onan Lubricon
CDC TOTAL
________ __________ _______ ________
_______ ________
<S> <C> <C> <C> <C>
<C> <C>
Assets
______
Cash and investments:
The Northern Trust Company
Short-Term Investment Fund $ 1,156 $ - $ - $ -
$ - $ 1,156
Cummins Engine Company, Inc.
Fixed Income Fund 89,546 110,828 19,251 82
5,104 224,811
Vanguard Wellington Fund 67,646 40,998 21,159 103
3,716 133,622
Vanguard U.S. Growth Fund 31,366 10,322 9,393 74
2,218 53,373
Vanguard Index Trust Fund 39,208 16,324 11,728 82
2,593 69,935
Vanguard Explorer Fund 5,911 1,727 1,238 19
271 9,166
Vanguard International Fund 5,396 1,221 1,098 46
178 7,939
Cummins Engine Company, Inc.
Common Stock 94,522 7,356 2,480 14
1,193 105,565
Participant Loans 5,439 3,587 1,632 23
897 11,578
________ ________ _______ ____
_______ ________
Total cash and investments 340,190 192,363 67,979 443
16,170 617,145
________ ________ _______ ____
_______ ________
Receivables:
Employer contributions 3,528 1,454 280 20
575 5,857
Employee contributions 1,758 1,485 631 4
248 4,126
Employee loan repayments 319 216 136 2
70 743
Accrued interest 4 - - -
- - 4
________ ________ _______ ____
_______ ________
Total receivables 5,609 3,155 1,047 26
893 10,730
________ ________ _______ ____
_______ ________
Total assets 345,799 195,518 69,026 469
17,063 627,875
________ ________ _______ ____
_______ ________
Liabilities
___________
Interest payable 2,953 - - -
- - 2,953
Note payable - ESOP 68,050 - - -
- - 68,050
________ ________ _______ ____
_______ ________
Total liabilities 71,003 - - -
- - 71,003
________ ________ _______ ____
_______ ________
Net Assets $274,796 $195,518 $69,026 $469
$17,063 $556,872
________ ________ _______ ____
_______ ________
________ ________ _______ ____
_______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF CHANGES IN NET ASSETS BY PLAN
DECEMBER 31, 1996
(stated in OOO's)
<TABLE>
<CAPTION>
Salaried Bargaining Onan
Lubricon CDC TOTAL
________ __________ _______
________ _______ ________
<S> <C> <C> <C> <C>
<C> <C>
Net Assets - beginning of year $274,796 $195,518 $69,026
$469 $17,063 $556,872
________ ________ _______
____ _______ ________
Investment income:
Fund investment income 39,001 23,366 11,144
68 2,551 76,130
Interest income 26 - -
- - - 26
Dividend income 2,252 - -
- - - 2,252
Net realized & unrealized depreciation
in the value of investments 20,256 - -
- - - 20,256
_________ ________ _______
____ _______ _________
Total investment income 61,535 23,366 11,144
68 2,551 98,664
Less: investment advisory expense 44 - -
- - - 44
interest expense 5,777 - -
- - - 5,777
________ ________ _______
____ _______ ________
Net investment income 55,714 23,366 11,144
68 2,551 92,843
________ ________ _______
____ _______ ________
Contributions:
Employer 5,342 1,346 266
21 564 7,539
Employee 19,798 13,885 5,768
46 2,161 41,658
Rollover 779 34 193
- - 44 1,050
________ ________ _______
____ _______ ________
Total contributions 25,919 15,265 6,227
67 2,769 50,247
________ ________ _______
____ _______ ________
Participant withdrawals (19,649) (15,218) (5,191)
(126) (2,147) (42,331)
Inter-plan transfers 191 (201) 68
- - (58) -
________ _________ _______
____ ________ ________
Net assets - end of year $336,971 $218,730 $81,274
$478 $20,178 $657,631
________ ________ _______
____ _______ ________
________ ________ _______
____ _______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF CHANGES IN NET ASSETS BY PLAN
DECEMBER 31, 1995
(stated in OOO's)
<TABLE>
<CAPTION>
Salaried Bargaining Onan
Lubricon CDC TOTAL
________ __________ _______
________ _______ ________
<S> <C> <C> <C> <C>
<C> <C>
Net Assets - beginning of year $238,898 $167,221 $54,262
$369 $13,892 $474,642
________ ________ _______
____ _______ ________
Investment income:
Fund investment income 39,792 22,889 11,797
79 2,290 76,847
Interest income 28 - -
- - - 28
Dividend income 2,287 - -
- - - 2,287
Net realized & unrealized depreciation
in the value of investments (18,865) - -
- - - (18,865)
_________ ________ _______
_____ _______ _________
Total investment income 23,242 22,889 11,797
79 2,290 60,297
Less: investment advisory expense 70 25 4
- - 2 101
interest expense 5,907 - -
- - - 5,907
________ ________ _______
_____ _______ ________
Net investment income 17,265 22,864 11,793
79 2,288 54,289
________ ________ _______
_____ _______ _________
Contributions:
Employer 5,390 1,462 286
20 592 7,750
Employee 21,602 13,946 5,903
59 2,213 43,723
Rollover 1,029 88 106
- - 23 1,246
________ ________ _______
____ _______ ________
Total contributions 28,021 15,496 6,295
79 2,828 52,719
________ ________ _______
____ _______ ________
Participant withdrawals (9,896) (10,006) (3,265)
(57) (1,554) (24,778)
Inter-plan transfers 508 (57) (59)
(1) (391) -
________ _________ ________
_____ ________ ________
Net assets - end of year $274,796 $195,518 $69,026
$469 $17,063 $556,872
________ ________ _______
____ _______ ________
________ ________ _______
____ _______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF NET ASSETS BY FUND
DECEMBER 31, 1996
(stated in OOO's)
<CAPTION>
Non-
Participant
Participant Directed
Directed
_________________________________________________________________ __________
Fixed U.S. Index Explorer
Cummins Loan
Income Wellington Growth Fund Fund
Intl. Stock ESOP Fund Total
________ __________ _______ _______ ________
______ _______ _______ _______ ________
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Assets
______
Cash and investments:
The Northern Trust Company
Short-Term Investment Fund $ - $ - $ - $ - $ - $
- - $ - $ 1,134 $ - $ 1,134
Cummins Engine Company, Inc.
Fixed Income Fund 227,022 - - - -
- - - - - 227,022
Vanguard Wellington Fund - 155,667 - - -
- - - - - 155,667
Vanguard U.S. Growth Fund - - 79,282 - -
- - - - - 79,282
Vanguard Index Trust Fund - - - 96,549 -
- - - - - 96,549
Vanguard Explorer Fund - - - - 14,087
- - - - - 14,087
Vanguard International Fund - - - - -
9,943 - - - 9,943
Cummins Engine Company, Inc.
Common Stock - - - - -
- - 18,136 102,695 - 120,831
Participant Loans - - - - -
- - - - 12,712 12,712
________ ________ _______ _______ _______
______ _______ _______ _______ ________
Total cash and investments 227,022 155,667 79,282 96,549 14,087
9,943 18,136 103,829 12,712 717,227
________ ________ _______ _______ _______
______ _______ _______ _______ ________
Receivables:
Employer contributions 1,037 500 303 350 58
41 78 3,365 - 5,732
Employee contributions 1,126 838 555 646 129
79 100 - - 3,473
Employee loan repayments 209 155 102 112 18
11 26 - - 633
Accrued interest - - - - -
- - - 4 - 4
________ ________ _______ _______ ______
______ _______ _______ _______ ________
Total receivables 2,372 1,493 960 1,108 205
131 204 3,369 - 9,842
________ ________ _______ _______ ______
______ _______ _______ _______ ________
Total assets 229,394 157,160 80,242 97,657 14,292
10,074 18,340 107,198 12,712 727,069
________ ________ _______ _______ ______
______ _______ _______ _______ ________
Liabilities
___________
Interest payable - - - - -
- - - 2,888 - 2,888
Note payable - ESOP - - - - -
- - - 66,550 - 66,550
________ ________ _______ _______ ______
______ _______ _______ _______ ________
Total liabilities - - - - -
- - - 69,438 - 69,438
________ ________ _______ _______ _______
______ _______ _______ _______ ________
Net Assets $229,394 $157,160 $80,242 $97,657 $14,292
$10,074 $18,340 $37,760 $12,712 $657,631
________ ________ _______ _______ _______
_______ _______ _______ _______ ________
________ ________ _______ _______ _______
_______ _______ _______ _______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF NET ASSETS BY FUND
DECEMBER 31, 1995
(stated in OOO's)
<CAPTION>
Non-
Participant
Participant Directed
Directed
_________________________________________________________________ __________
Fixed U.S. Index Explorer
Cummins Loan
Income Wellington Growth Fund Fund
Intl. Stock ESOP Fund Total
________ __________ _______ _______ ________
_______ _______ _______ _______ ________
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Assets
______
Cash and investments:
The Northern Trust Company
Short-Term Investment Fund $ - $ - $ - $ - $ - $
- - $ - $ 1,156 $ - $ 1,156
Cummins Engine Company, Inc.
Fixed Income Fund 224,811 - - - -
- - - - - 224,811
Vanguard Wellington Fund - 133,622 - - -
- - - - - 133,622
Vanguard U.S. Growth Fund - - 53,373 - -
- - - - 53,373
Vanguard Index Trust Fund - - - 69,935 -
- - - - - 69,935
Vanguard Explorer Fund - - - - 9,166
- - - - - 9,166
Vanguard International Fund - - - - -
7,939 - - - 7,939
Cummins Engine Company, Inc.
Common Stock - - - - -
- - 21,368 84,197 - 105,565
Participant Loans - - - - -
- - - - 11,578 11,578
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total cash and investments 224,811 133,622 53,373 69,935 9,166
7,939 21,368 85,353 11,578 617,145
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Receivables:
Employer contributions 1,269 524 266 307 45
40 93 3,313 - 5,857
Employee contributions 1,473 1,033 554 677 126
109 154 - - 4,126
Employee loan repayments 269 182 100 127 15
14 36 - - 743
Accrued interest - - - - -
- - - 4 - 4
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total receivables 3,011 1,739 920 1,111 186
163 283 3,317 - 10,730
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total assets 227,822 135,361 54,293 71,046 9,352
8,102 21,651 88,670 11,578 627,875
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Liabilities
___________
Interest payable - - - - -
- - - 2,953 - 2,953
Note payable - ESOP - - - - -
- - - 68,050 - 68,050
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total liabilities - - - - -
- - - 71,003 - 71,003
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Net Assets $227,822 $135,361 $54,293 $71,046 $9,352 $
8,102 $21,651 $17,667 $11,578 $556,872
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF CHANGES IN NET ASSETS BY FUND
DECEMBER 31, 1996
(stated in OOO's)
<CAPTION>
Non-
Participant
Participant Directed
Directed
_________________________________________________________________ __________
Fixed U.S.
Cummins Loan
Income Wellington Growth Index Explorer
Intl. Stock ESOP Fund Total
________ __________ _______ _______ ________
_______ _______ _______ _______ ________
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Net Assets - beginning of year $227,822 $135,361 $54,293 $71,046 $9,352 $
8,102 $21,651 $17,667 $11,578 $556,872
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Investment income:
Fund investment income 14,358 21,729 15,259 17,404 1,357
904 5,119 - - 76,130
Interest income - - - - -
- - - 26 - 26
Dividend income - - - - -
- - - 2,252 - 2,252
Net realized and unrealized
depreciation in the value
of investments - - - - -
- - - 20,256 - 20,256
________ ________ _______ _______ ______
_______ _______ _______ _______ _________
Total investment income 14,358 21,729 15,259 17,404 1,357
904 5,119 22,534 - 98,664
Less: investment advisory expense - - - - -
- - - 44 - 44
interest expense - - - - -
- - - 5,777 - 5,777
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Net investment income 14,358 21,729 15,259 17,404 1,357
904 5,119 16,713 - 92,843
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Contributions:
Employer 1,080 501 303 350 58
41 80 5,126 - 7,539
Employee 13,169 10,273 6,426 7,533 1,657
1,194 1,406 - - 41,658
Rollover 207 182 192 265 91
53 60 - - 1,050
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total contributions 14,456 10,956 6,921 8,148 1,806
1,288 1,546 5,126 - 50,247
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Participant loan repayments 2,751 1,971 1,229 1,405 244
180 364 - (8,144) -
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Inter-fund transfers (7,367) ( 470) 8,234 5,399 2,371
389 (8,556) - - -
_________ _________ ________ _______ ______
_______ _______ _______ _______ ________
Payments:
Participant withdrawals (19,211) (10,208) (4,406) (4,179) (673)
(644) (1,264) (1,746) - (42,331)
Participant loan withdrawals ( 3,415) ( 2,179) (1,288) (1,566) (165)
(145) ( 520) - 9,278 -
_________ _________ ________ ________ _______
________ ________ ________ _______ _________
Total payments (22,626) (12,387) (5,694) (5,745) (838)
(789) (1,784) (1,746) 9,278 (42,331)
_________ ________ _______ ________ _______
________ ________ ________ _______ _________
Net assets - end of year $229,394 $157,160 $80,242 $97,657 $14,292
$10,074 $18,340 $37,760 $12,712 $657,631
________ ________ _______ _______ _______
_______ _______ _______ _______ ________
________ ________ _______ _______ _______
_______ _______ _______ _______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
COMBINING STATEMENTS OF CHANGES IN NET ASSETS BY FUND
DECEMBER 31, 1995
(stated in OOO's)
<CAPTION>
Non-
Participant
Participant Directed
Directed
_________________________________________________________________ __________
Fixed U.S.
Cummins Loan
Income Wellington Growth Index Explorer
Intl. Stock ESOP Fund Total
________ __________ _______ _______ ________
_______ _______ _______ _______ ________
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Net Assets - beginning of year $214,951 $ 99,306 $31,985 $44,135 $4,134
$10,511 $22,298 $35,953 $11,369 $474,642
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Investment income:
Fund investment income (loss) 15,416 31,854 13,383 17,250 1,429
770 (3,255) - - 76,847
Interest income - - - - -
- - - 28 - 28
Dividend income - - - - -
- - - 2,287 - 2,287
Net realized and unrealized
depreciation in the value
of investments - - - - -
- - - (18,865) - (18,865)
________ ________ _______ _______ ______
_______ _______ _______ _______ _________
Total investment income (loss) 15,416 31,854 13,383 17,250 1,429
770 (3,255) (16,550) - 60,297
Less: investment advisory expense 51 - - - -
- - - 50 - 101
interest expense - - - - -
- - - 5,907 - 5,907
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Net investment income (loss) 15,365 31,854 13,383 17,250 1,429
770 (3,255) (22,507) - 54,289
________ ________ _______ _______ ______
_______ _______ _______ _______ _________
Contributions:
Employer 1,309 526 268 309 45
40 96 5,157 - 7,750
Employee 16,125 10,654 5,579 6,694 1,175
1,489 2,007 - - 43,723
Rollover 254 262 235 291 68
62 74 - - 1,246
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total contributions 17,688 11,442 6,082 7,294 1,288
1,591 2,177 5,157 - 52,719
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Participant loan repayments 2,994 1,835 945 1,137 151
204 461 - (7,727) -
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Inter-fund transfers (6,077) (2,427) 4,462 4,288 2,792
(4,420) 1,382 - - -
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Payments:
Participant withdrawals (13,912) (4,811) (1,651) (1,922) (298)
(361) (887) (936) - (24,778)
Participant loan withdrawals ( 3,187) (1,838) ( 913) (1,136) (144)
(193) (525) - 7,936 -
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Total payments (loss) (17,099) (6,649) (2,564) (3,058) (442)
(554) (1,412) (936) 7,936 (24,778)
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
Net assets - end of year $227,822 $135,361 $54,293 $71,046 $9,352 $
8,102 $21,651 $17,667 $11,578 $556,872
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
________ ________ _______ _______ ______
_______ _______ _______ _______ ________
The accompanying notes and schedules are an integral part of these statements.
</TABLE>
<PAGE>
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. SUMMARY OF THE PLAN
___________________
The Cummins Engine Company, Inc. and Affiliates Retirement and
Savings Plans (the Plan or the Plans) are defined contribution plans that
cover five employee groups, as described in Note 2. Participants have the
opportunity to make pre-tax and after-tax contributions to the plan and can
choose from seven different investment options. Investment options and
details of the plans are described in Note 2 and Note 3.
2. SUMMARY OF ACCOUNTING POLICIES
______________________________
Basis of Combination
____________________
The Combining Statements of Net Assets and Changes in Net Assets
reflect the financial activity of the Retirement and Savings Plans of
Cummins Engine Company, Inc. (the Company) and certain subsidiary companies
(the Companies). These Plans include:
Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan
for Salaried and Non-Bargaining Hourly Employees (Salaried Plan)
Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan
for Bargaining Unit Employees (Bargaining Plan)
Cummins Engine Company, Inc. Retirement and Savings Plan for Onan
Corporation Employees (Onan Plan)
Cummins Engine Company, Inc. Retirement and Savings Plan for Lubricant
Consultants, Inc. Employees (Lubricon Plan)
Cummins Engine Company, Inc. Retirement and Savings Plan for Consolidated
Diesel Company Employees (CDC Plan)
Trust Arrangements
__________________
A single trust arrangement is maintained with the Trustee for the
administration of the primary investments in the Plans; however, a separate
trust arrangement was maintained with The Northern Trust Company for the
Employee Stock Ownership (ESOP) portion of the Plans (as described in Note
3). Effective February 1997, Vanguard Fiduciary Trust Company assumed
responsibility for the ESOP trust.
Accounting Method
_________________
Accounting records are maintained by the Trustee on a modified cash
basis. All material adjustments have been made to present the financial
statements under the accrual basis of accounting as required by generally
accepted accounting principles.
All investments included in the Combining Statements of Net Assets and
Schedule I and the investment related income included in the Combining
Statements of Changes in Net Assets reflect amounts obtained from and
certified by the respective trustees as being complete and accurate.
Investments
___________
Investments held by the Trust are stated at market value except for
its investment contracts which are stated at contract value and changes in
market value are reflected in Fund investment income (loss). Quoted market
prices are used to value investments.
The Fixed Income Fund consists primarily of insurance contracts and
bank investment contracts with various insurance companies. The insurance
companies maintain investment accounts for each contract. The accounts are
credited with earnings on the underlying investments at interest rates
ranging from 4.95% to 9.27% for both 1995 and 1996 and charged for
withdrawals and administrative expenses by the insurance companies. The
contracts are included in the financial statements at contract value, which
approximates fair value as reported to the Plan by the investment
administrator. Contract values represent contributions made under the
contracts, plus earnings, less Plan withdrawals and administrative
expenses. The crediting interest rate is based on an agreed upon formula
with the issuer.
Assets of the Trust are segregated into seven investment funds: the
Cummins Engine Company, Inc. Fixed Income Fund, the Wellington Fund, the
Vanguard U.S. Growth Fund, the Vanguard Institutional Index Fund, the
Vanguard Explorer Fund, the Vanguard International Fund, and the Cummins
Common Stock Fund. Maintenance of separate funds provides investment
alternatives to participants in the Plans; the allocation of investments
between the funds is at the direction of participants.
Like all the other investment alternatives, the Cummins Common Stock
Fund is valued in units. The net asset value per unit fluctuates on a
daily basis with the change in the price of Cummins Stock. At December 31,
1996 there were a total of 2,056,000 units and a net asset value of
$18,340,000.
The assets of the Fixed Income Fund consist primarily of insurance and
bank investment contracts. The Wellington Fund consists primarily of
equity, fixed income, and cash equivalent marketable securities. The
Vanguard U.S. Growth Fund consists primarily of long-term domestic and
foreign capital growth stock. The Vanguard Institutional Index Fund
consists primarily of equity and cash equivalent marketable securities
whose investment results should correspond to the performance of the
Standard & Poor's 500 Composite Stock Price (S & P 500) Index. The
Explorer Fund consists of common stocks of small companies with favorable
prospects for above-average growth in market value. The International Fund
consists of a broadly diversified portfolio of non-U.S. equity securities
selected on the basis of relative value. The Cummins Common Stock Fund
consists of investments in Company common stock. The ESOP Fund consists of
matching contributions in the form of common stock for certain plans.
Effective January 1996, the Vanguard Institutional Index Fund replaced
Vanguard Index Trust-500 Fund.
Net investment income (loss) of each fund is allocated to each Plan
based on the relationship of each Plan's investment in the fund to the
total investment in the fund. Net investment income (loss) is likewise
allocated to participants based on the relationship of participant account
balances in each fund to the total balance in each fund.
Participant Loans
_________________
The Plans permit participants to borrow portions of their accounts
subject to Department of Labor regulations. Participants may take out
loans limited to the lessor of $50,000 or 50 percent of the present value
of their accounts (excluding ESOP accounts) over a period not to exceed 54
months. The annual interest rate is the Prime Rate, as quoted in the Wall
Street Journal, plus 1 percent. The amount used to secure a loan is 50
percent of the participant's account balance.
Participant loan activity is reported in the Combining Statements of
Net Assets and Changes in Net Assets by Fund in the Loan Fund.
Administrative Expenses and Investment Advisory Fees
____________________________________________________
Administrative expenses such as record keeping fees are paid by the
Companies. Investment advisory fees for portfolio management of Vanguard
Funds are paid directly from fund earnings. Investment advisory fees for
the Fixed Income Fund are paid directly from the fund. The trust agreement
entitles the Trustee to receive reasonable compensation for services
rendered and expenses incurred in the administration and execution of the
Plans.
3. DESCRIPTION OF THE PLANS
________________________
Participation
_____________
Substantially all full-time, domestic employees of the Company and
designated subsidiaries are eligible to participate in one of the Plans no
later than the first day of the month following the 60th day after date of
employment. Nonresident aliens employed by the Company or a foreign
subsidiary are eligible to participate if the Company owns at least 80
percent of the foreign subsidiary's common stock.
The Plans encourage voluntary savings through regular payroll
deductions. Subject to limitations contained in the Internal Revenue Code
and Regulations, participants may contribute up to 15 percent of gross pay
(10 percent with respect to certain highly compensated participants) as pre-
tax contributions, and 10 percent of gross pay as after-tax contributions
(not to exceed 20% in total). In addition, participants are permitted to
make voluntary additional after-tax contributions once each year.
At the end of each Plan year, the Companies make matching
contributions for each participant's pre-tax and after-tax contributions
that remain in the Plans at the end of the Plan year. The formulas for
these matches, as set forth in the Plans, vary for each Company (see
Schedule III). Certain groups of participants receive cash matches and
other groups participate in the ESOP (as described below) and receive
matching contributions in the form of Company common stock. All matching
cash contributions, ESOP shares, and earnings thereon are immediately
vested and nonforfeitable.
In July 1989, the Company established the ESOP Trust and sold
2,362,206 shares of its common stock at $31.75 per share (amounts reflect
two-for-one common stock split) to the ESOP Trust in exchange for a $75
million promissory note (the Note) secured by the shares. In December
1990, the ESOP Trust prepaid its then-current indebtedness to the Company
with proceeds from the issuance of $72,750,000 of 8.76 percent ESOP Notes
due 1998 and guaranteed by the Company (see Note 6). The arrangement
requires the Companies to contribute an aggregate annual amount to the ESOP
Trust equal to the annual principal and interest payable under the terms of
the Note after application of dividends paid on shares held in the ESOP
Trust. As the ESOP Trust's indebtedness is repaid from these sources of
funds, shares are allocated to the accounts of participants in the ESOP in
relative proportion to each participant's contributions to the Plans as
well as dividends received on shares previously allocated to the
participant's account in the ESOP Trust. As of December 31, 1996, 897,070
shares were allocated and 1,465,136 remain unallocated in the ESOP Trust.
Participant and Company cash matching contributions are deposited in
the Trust and then invested in the seven investment funds in accordance
with participant elections. Account balances and contributions can be
invested in one or more of the seven investment funds in multiples of 1
percent. Investment direction can be changed daily with a limit of two
times per month. Until February 3, 1997, common stock account balances in
the ESOP account could not be redirected. As of February 3, 1997,
participants 55 years of age or older are able to diversify their stock
account balances in the ESOP account into the other RSP investment options.
Investment experience is allocated to participant accounts on a daily
basis.
Participant Withdrawals
_______________________
Participants are permitted to withdraw their after-tax contributions,
the Company cash matching contributions (after remaining in the account for
two full plan years) and accumulated earnings thereon. Participants are
also permitted to take out loans (see Note 2). In the event of financial
hardship, participants are permitted to withdraw pre-tax contributions and
accumulated earnings thereon. Each hardship withdrawal request, including
proof of financial hardship, is reviewed individually by the Plans'
Administrator. In-service withdrawals from the ESOP account are
prohibited.
Plan Payouts
____________
Upon termination of employment, immediate distribution is made to
those participants with account balances less than or equal to $3,500.
Terminating participants with account balances greater than $3,500 must
consent to any payment prior to the attainment of age 70 1/2. Participants
who do not consent to immediate distribution may subsequently elect in
writing to begin receiving benefits as soon as is practical, provided that
in any event the distribution commences no later than April 1 of the Plan
year following the Plan year in which age 70 1/2 occurs. Account balances
remaining in the Plans will continue to share in the earnings of the
investments prior to distribution. Distributions from the ESOP portion of
the Plans are in whole shares of stock allocated to participant accounts,
with cash for partial shares unless participants elect to receive the
entire distribution in cash at current market value.
4. PLAN AMENDMENTS
_______________
Effective January 1, 1995, the after-tax match for DWU-CMEP employees
(Bargaining Plan) was replaced by a pre-tax match of $1 for every $1
contributed up to 2% of gross pay and $.25 for every $1 contributed up to
the next 4% of gross pay.
Effective January 1, 1996, the after-tax match for OCU employees
hired after June 19, 1990 and OCU-CMEP employees (Bargaining Plan) was
replaced by a pre-tax match of $1 for every $1 contributed up to 2% of
gross pay and $.25 for every $1 contributed up to the next 4% of gross pay.
Effective January 1, 1997, the pre- and after-tax matches for Salaried
and Nonbargaining Hourly and Consolidated Diesel Company (CDC) was replaced
by a pre-tax match of $.50 for every $1 contributed up to 6% of gross pay.
However, hourly employees meeting certain criteria at Jamestown, Charleston
and CDC had the option of adopting the above mentioned amendment or
remaining with the old plan.
5. TAX STATUS
__________
The Internal Revenue Service issued determination letters stating that
the Plans were qualified in accordance with applicable plan design
requirements as of their dates. In the opinion of the Plan Administrator
and Internal Tax Counsel, the Plans are currently designed and continue to
operate in a manner that qualifies them under Internal Revenue Code (IRC)
Section 401(a) and, therefore, are exempt from income taxes under the
provisions of IRC Section 501(a). Accordingly, no provision for Federal
income taxes has been made.
6. LONG-TERM DEBT
______________
The ESOP Trust has issued $72,750,000 of ESOP Notes due in 1998 with
an annual interest rate of 8.76 percent payable semi-annually to the Note
holders (see Note 3). Effective January 1, 1993, the interest rate on the
notes was reduced to 8.68 percent due to a tax law change. Principal
payments of $1.6 million and $1.7 million are due in 1997, and 1998
respectively. The final principal payment, $63.3 million, is due on July
15, 1998.
7. PARTIES-IN-INTEREST AND REPORTABLE TRANSACTIONS
_______________________________________________
Party-in-interest transactions during the plan year ended December 31,
1996 are included in Schedules I and II of these statements.
Reportable transactions during the plan year ended December 31, 1996
are included in Schedule II of these statements.
<PAGE>
SCHEDULE I
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
EIN 35-0257090
ITEM 27 A: SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(cost and market value amounts stated in 000's)
ISSUER/DESCRIPTION COST MARKET VALUE
_______________________________ ________ ____________
Salaried:
The Northern Trust Company
Short-Term Investment Fund $ 1,134 $ 1,134
Cummins Engine Company, Inc.
Fixed Income Fund**** 89,808 89,808
Vanguard Wellington Fund*** 62,735 77,360
Vanguard U.S. Growth Fund*** 35,396 45,475
Vanguard Index Trust Fund*** 45,273 53,581
Vanguard Explorer Fund*** 8,778 9,192
Vanguard International Fund*** 7,913 6,971
Cummins Engine Company, Inc.
Common Stock*** 79,698 111,725
Participant Loans (7.0%-10.0%) 5,919 5,919
________ ________
$336,653 $401,165
________ ________
Bargaining:
The Northern Trust Company
Short-Term Investment Fund $ - $ -
Cummins Engine Company, Inc.
Fixed Income Fund**** 111,753 111,753
Vanguard Wellington Fund*** 40,215 49,591
Vanguard U.S. Growth Fund*** 13,518 17,367
Vanguard Index Trust Fund*** 19,913 23,567
Vanguard Explorer Fund*** 2,160 2,262
Vanguard International Fund*** 1,515 1,335
Cummins Engine Company, Inc.
Common Stock*** 4,171 5,847
Participant Loans (7.0%-10.0%) 4,084 4,084
________ ________
$197,330 $215,806
________ ________
Onan:
The Northern Trust Company
Short-Term Investment Fund $ - $ -
Cummins Engine Company, Inc.
Fixed Income Fund**** 19,473 19,473
Vanguard Wellington Fund*** 19,697 24,290
Vanguard U.S. Growth Fund*** 10,249 13,167
Vanguard Index Trust Fund*** 13,496 15,973
Vanguard Explorer Fund*** 2,081 2,179
Vanguard International Fund*** 1,466 1,292
Cummins Engine Company, Inc.
Common Stock*** 1,700 2,383
Participant Loans (7.0%-10.0%) 1,734 1,734
________ ________
$ 69,897 $ 80,491
________ ________
Lubricon:
The Northern Trust Company
Short-Term Investment Fund $ - $ -
Cummins Engine Company, Inc.
Fixed Income Fund**** 67 68
Vanguard Wellington Fund*** 60 74
Vanguard U.S. Growth Fund*** 71 91
Vanguard Index Trust Fund*** 89 105
Vanguard Explorer Fund*** 41 43
Vanguard International Fund*** 38 33
Cummins Engine Company, Inc.
Common Stock*** 12 18
Participant Loans (7.0%-10.0%) 21 21
________ ________
$ 401 $ 453
________ ________
CDC:
The Northern Trust Company
Short-Term Investment Fund $ - $ -
Cummins Engine Company, Inc.
Fixed Income Fund**** 5,921 5,920
Vanguard Wellington Fund*** 3,529 4,352
Vanguard U.S. Growth Fund*** 2,477 3,182
Vanguard Index Trust Fund*** 2,808 3,323
Vanguard Explorer Fund*** 393 411
Vanguard International Fund*** 354 312
Cummins Engine Company, Inc.
Common Stock*** 612 858
Participant Loans (7.0%-10.0%) 954 954
________ ________
$ 17,046 $ 19,312
________ ________
Total:
The Northern Trust Company
Short-Term Investment Fund $ 1,134 $ 1,134
Cummins Engine Company, Inc.
Fixed Income Fund**** 227,022 227,022
Vanguard Wellington Fund*** 126,237 155,667
Vanguard U.S. Growth Fund*** 61,711 79,282
Vanguard Index Trust Fund*** 81,578 96,549
Vanguard Explorer Fund*** 13,453 14,087
Vanguard International Fund*** 11,286 9,943
Cummins Engine Company, Inc.
Common Stock*** 86,193 120,831
Participant Loans (7.0%-10.0%) 12,712 12,712
________ ________
$621,326 $717,227
________ ________
*** Identifies known party-in-interest to the plan
****See detail of Cummins Engine Company, Inc. Fixed Income Fund
following Schedule I.
<PAGE>
Schedule I
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND INVESTMENT PLANS
EIN 35-0257090
ITEM 27A: SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(cost and market value amounts stated in 000's)
SECURITY NAME MARKET VALUE
UNDERLYING ASSET RATE AT 12/31/96
__________________________ _____ ____________
AIG 129128 7.12% $ 8,300
AIG 181758 4.95% 3,053
Canada Life P45735 5.90% 7,308
Deutschi Bank VG-CUM-1 6.34% 16,768
Harford Life GA-9650 5.43% 8,536
Metropolitan 13296 5.66% 6,341
Metropolitan 13753 6.93% 8,375
New York Life GA-06971 7.10% 5,957
New York Life GA-06971-002 7.32% 11,861
New York Life GA-30196 7.88% 12,865
New York Life GA-30196-002 7.35% 6,352
Principal 4-15203-1 7.75% 8,231
Principal 4-15203-2 7.86% 8,249
Principal 4-15203-3 7.30% 6,810
Prudential GA 5036-214 5.21% 4,696
Prudential GA 5036-216 7.26% 8,443
Rarobank CUM-118601 6.03% 5,039
Rarobank CUM-090501 6.17% 10,863
Rarobank CUM-049601 6.51% 10,432
Sun Life Canada S-0856-G 5.77% 9,914
Sun Life Canada S-0834-G 6.70% 13,082
Sun Life Canada S-0877-G 5.70% 6,070
Union DK Switzerland 2112 6.05% 13,226
VGI Money Market Prime 5.19% 26,328
________
Total $227,099
________
________
<PAGE>
<TABLE>
Schedule II
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND INVESTMENT PLANS
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(amounts stated in 000's)
<CAPTION>
Par Value
Number of or Principal Purchased Sales
Current Gain or
Transactions Amount Cost
Proceeds Value (Loss)
____________ ____________ _________
________ _______ _______
<S> <C> <C> <C> <C>
<C> <C>
Description of Issue
____________________
Vanguard Wellington Fund*** 150 N/A $35,829 $
- - $35,829 $ -
Vanguard Wellington Fund*** 167 N/A 18,703
23,284 4,581
Vanguard World-U.S. Growth*** 196 N/A 27,741
- - 27,741 -
Vanguard World-U.S. Growth*** 118 N/A 8,430
11,312 - 2,882
VMMR - Prime Portfolio*** 118 N/A 53,456
- - 53,456 -
VMMR - Prime Portfolio*** 64 N/A 54,496
54,496 - -
Vanquard Index Trust 500*** 6 N/A 309
- - 309 -
Vanquard Index Trust 500*** 3 N/A 56,183
69,531 - 13,348
Vanquard Institutional Index*** 169 N/A 91,909
- - 91,909 -
Vanquard Institutional Index*** 139 N/A 10,331
11,503 - 1,172
Fixed Income Fund 157 N/A 50,131
- - 50,131 -
Fixed Income Fund 170 N/A 47,988
47,988 - -
***Identifies known party-in-interest to the plan
</TABLE>
<PAGE>
Schedule III
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
SCHEDULE OF MATCHING CONTRIBUTION FORMULAS
AS OF DECEMBER 31, 1996
LOC CASH ESOP STOCK
EMPLOYING COMPANY CODE LOCATION NAME CONTRIBUTIONS CONTRIBUTION
_________________ ____ _____________ _____________ ____________
Cummins Engine Company 110 Columbus Exempt No Yes(1)(2)
" 120 Columbus DWU Yes(3)(4) No
" 121 Walesboro DWU Yes(15) No
" 130 Columbus OCU Yes(3)(4) No
" 131 OCU New Hires Yes(15) No
" 132 Walesboro OCU Yes(15) No
" 133 OCU Levels 4 & 5 Yes(15) No
" 135 Cols. Security No Yes(1)(2)
" 136 Cols Sec. New Hires Yes(4)(5) No
CADEC 190 CADEC Yes(11) No
Cummins Engine Company 200 CHS Mgmt. Services No Yes(1)(2)
Combustion Technologies 210 CTI Georgia No Yes(1)(2)
" 220 CTI Charleston No Yes(1)(2)
Cummins Engine Company 240 CHS Cylinder Head No Yes(1)(2)
" 250 CHS ReCon No Yes(1)(2)
" 260 CHS Engr Test Svcs. No Yes(1)(2)
" 291 Cummins Marine No Yes(1)(2)
" 300 Jamestown No Yes(1)(2)
" 301 JEP New Hires Yes(5)(6) No
Cummins Natural Gas 390 Cummins Natural Gas Yes(13)(14) No
Engines
Cummins Americas, Inc. 400 Miami PDC No Yes(1)(2)
Atlas Crankshaft 500 Atlas Salaried No Yes(1)(2)
" 510 Atlas Union Yes(16) No
Onan Corporation 550 Onan-Multiple Loc. Yes(9) Yes(8)
" 551 Onan Huntsville Yes(9) Yes(8)
" 552 Onan OPE St. Peter Yes(9) Yes(8)
Fleetguard, Inc. 600 Fleetguard TN No Yes(1)(2)
Salaried
" 610 Fleetguard Lake No Yes(1)(2)
Mills Salaried
" 620 Fleetguard Lake No Yes(1)(2)
Mills Hourly
Fleetguard, Inc. 630 Fleetguard TN Hourly Yes(10) No
Lubricant Consultants 640 Lubricon Yes(12) No
Kuss 650 Kuss Salaried No Yes(1)(2)
Kuss 651 Kuss Union No Yes(1)(2)
Fleetguard, Inc. 655 Separation Tech. No Yes(1)(2)
Cummins Engine Company 700 DRC Salaried No Yes(1)(2)
" * 720 DRC TN Union Yes(11) No
" * 730 DRC LA Union Yes(13) No
" * 740 DRC LA Union Yes(13) No
Cummins Diesel Intl. 810 CDIL No Yes(1)(2)
Cummins Engine Company 815 CKEC No Yes(1)(2)
Consolidated Diesel Co. 900 Consol. Diesel Co. Yes(11)(7) No
Holset Engr. Company 950 Holset Memphis No Yes(1)(2)
" 951 Holset CHS No Yes(1)(2)
" 952 Holset Air
Compressors No Yes(1)(2)
*Participants at locations 720, 730 and 740 are not eligible
to make Basic Savings Contributions.
Matching Contribution Legend
____________________________
( 1) ESOP Stock Contribution based on 50% of 1st 2% of pay
contributed as a Pre-Tax Contribution.
( 2) ESOP Stock Contribution based on 50% of 1st $900 of pay
contributed as a Basic Savings Contribution.
( 3) Cash Contribution of 50% (up to a maximum of $325) of 1st 2%
of pay contributed as a Pre-tax Contribution.
( 4) Cash Contribution of 50% of the 1st $900 of pay contributed
as a Basic Savings Contribution.
( 5) Cash Contribution of $325 per year to Pre-Tax Contribution
account, regardless of % of pay contributed.
( 6) Cash Contribution of 100% on 1st $450 of pay contributed as a
Basic Savings Contribution.
( 7) Cash Contribution based on 50% (up to a maximum of $900) on
1st $1,800 of pay contributed as a Basic Savings Contribution.
( 8) ESOP Stock Contribution based on 100% of 1st $250, 75% of next
$250, 50% of next $1,000, and 25% of next $1,000 (maximum
stock match = $1,187.50). NOTE: Applies to Pre-Tax
Contributions.
( 9) Cash Contribution of 25% of the 1st $1,000 of pay contributed
as a Basic Savings Contribution.
(10) Cash Contribution of 50% of the 1st 2% of pay contributed as a
Pre-Tax Contribution with a minimum of $200 if at least 2% is
contributed.
(11) Cash Contribution of 50% of 1st 2% of pay contributed as a
Pre-Tax Contribution.
(12) Cash Contribution of 100% of 1st 2.5% of pay contributed as
a Pre-Tax Contribution.
(13) Cash Contribution of 50% of 1st 4% of pay contributed as a
Pre-Tax Contribution.
(14) Discretionary Cash Contribution.
(15) Cash Contribution of $1 for $1 up to 2% of gross pay; $.25
on dollar up to next 4% of gross pay for pretax.
(16) Cash Contribution of $1 for $1 up to 2% of gross pay contributed
as a Pre-Tax Contribution.
<PAGE>
Schedule IV
Cummins Engine Company, Inc. and Affiliates
Retirement and Savings Plans
Employing Locations by Plan
As of December 31, 1996
Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan for
Salaried and Non-Bargaining Hourly Employees
EIN # 35-0257090
Plan 020
- ---------------------------------------------------------------------------
110 Columbus Exempt 400 Miami PDC
135 Columbus Security 500 Atlas Salaried
136 Columbus Security New Hires 600 Fleetguard TN Salaried
190 CADEC 610 Fleetguard Lake Mills Salaried
200 Charleston Management Svcs. 620 Fleetguard Lake Mills Hourly
210 CTI Georgia 650 Kuss Salaried
220 CTI Charleston 655 Separation Technologies
240 CHS Headline 700 DRC Salaried
250 CHS ReCon 810 CDIL
260 CHS Engr. Test Services 815 Cummins Komatsu
291 Cummins Marine 950 Holset Memphis
300 Jamestown 951 Holset Charleston
301 Jamestown New Hires 952 Holset Air Compressors
390 Cummins Natural Gas Engines
Cummins Engine Company, Inc. Retirement and Savings Plan for
Onan Corporation Employees
EIN # 41-0965373
Plan 025
- --------------------------------------------------------------------------
550 Onan Multiple Locations 552 Onan OPE St. Peter
551 Onan Huntsville
Cummins Engine Company, Inc. Retirement and Savings Plan for
Consolidated Diesel Company Employees
EIN # 56-1896727
Plan 020
- -------------------------------------------------------------------------
900 Consolidated Diesel Company
Cummins Engine Company, Inc. Retirement and Savings Plan for
Lubricant Consultants, Inc. Employees
EIN # 22-2083361
Plan 020
- -------------------------------------------------------------------------
640 Lubricon
Cummins Engine Company, Inc. and Affiliates Retirement and Savings Plan for
Bargaining Unit Employees
EIN # 35-0257090
Plan 030
- ---------------------------------------------------------------------------
120 Columbus DWU 510 Atlas Union
121 Walesboro DWU 630 Fleetguard TN Hourly
130 Columbus OCU 651 Kuss Union
131 OCU New Hires 720 DRC TN Union
132 Walesboro OCU 730 DRC LA Union
133 OCU Levels 4 & 5 740 DRC LA Union
Schedule V
CUMMINS ENGINE COMPANY, INC. AND AFFILIATES
RETIREMENT AND SAVINGS PLANS
EIN 35-0257090
ITEM 27B: SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
AS OF DECEMBER 31, 1996
(amounts stated in 000's)
PRINCIPAL
ORIGINAL RECEIVED UNPAID
AMOUNT OF DURING PRINCIPAL AMOUNT
PLAN LOAN THE YEAR AT 12/31/96 OVERDUE
__________ _________ _________ ___________ _______
Salaried $183 $27 $106 $16
Bargaining 148 15 94 12
Onan 27 3 12 3
CDC 17 5 11 1
Participants may borrow amounts contributed up to 50% of the participant's
account balance, not to exceed $50,000. Loans must be repaid at least
quarterly over a period not to exceed five years. Interest rates vary
depending upon the time the loans are requested. A collection policy has been
implemented to tax all delinquent loans greater than 90 days past due as
distributions to the participant.
<PAGE>
SIGNATURE
_________
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
CUMMINS ENGINE COMPANY, INC.
RETIREMENT AND SAVINGS PLAN
____________________________
(Name of Plan)
By /s/ Carol K. Smalley
____________________
Carol K. Smalley
Secretary - Pension
Policy Committee
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
_________________________________________
As independent public accountants, we hereby consent to the
incorporation of our report dated June 20, 1996, included in this Form
11-K, into the Company's previously filed Registration Statement File
Nos. 2-32091, 2-53247, 2-58696, 33-2161, 33-8842, 33-31095,
33-37690, 33-46096, 33-46097, 33-46098, 33-50665, 33-56115 and
33-32165.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 20, 1997.
