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EXHIBIT 12
CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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| Three months ended |
| Six months ended |
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| July 2, |
| June 26, |
| July 2, |
| June 26, |
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| 2006 |
| 2005 |
| 2006 |
| 2005 |
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| Millions | ||||||||||||
Earnings | |||||||||||||
Earnings before income taxes and minority interests | $ | 299 | $ | 207 | $ | 527 | $ | 342 | |||||
Add: | |||||||||||||
Fixed charges | 35 | 36 | 71 | 72 | |||||||||
Amortization of capitalized interest | 2 | 1 | 3 | 2 | |||||||||
Distributed income of equity investees | 17 | 50 | 34 | 57 | |||||||||
Less: | |||||||||||||
Equity in earnings of investees | (34 | ) | (32 | ) | (60 | ) | (60 | ) | |||||
Capitalized interest | (1 | ) | (1 | ) | (2 | ) | (1 | ) | |||||
Earnings before fixed charges | $ | 318 | $ | 261 | $ | 573 | $ | 412 | |||||
Fixed charges | |||||||||||||
Interest expense | $ | 26 | $ | 28 | $ | 53 | $ | 56 | |||||
Capitalized interest | 1 | 1 | 2 | 1 | |||||||||
Interest portion of rental expense(1) | 8 | 7 | 16 | 15 | |||||||||
Total fixed charges | $ | 35 | $ | 36 | $ | 71 | $ | 72 | |||||
Ratio of earnings to fixed charges | 9.1 | 7.3 | 8.1 | 5.7 | |||||||||
(1) Amounts represent those portions of rent expense that are reasonable approximations of interest costs. |