EXHIBIT 12
CUMMINS INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
|
| | | | | | | | |
| | | Six months ended |
| In millions | | June 28, 2015 | | June 29, 2014 |
| Earnings | | |
| | |
|
| Income before income taxes | | $ | 1,252 |
| | $ | 1,153 |
|
| Add | | |
| | |
|
| Fixed charges | | 68 |
| | 68 |
|
| Amortization of capitalized interest | | 1 |
| | 1 |
|
| Distributed income of equity investees | | 146 |
| | 141 |
|
| Less | | |
| | |
|
| Equity in earnings of investees | | 143 |
| | 175 |
|
| Capitalized interest | | 3 |
| | 3 |
|
| Earnings before fixed charges | | $ | 1,321 |
|
| $ | 1,185 |
|
| | | | | |
| Fixed charges | | |
| | |
Interest expense(1) | | $ | 31 |
| | $ | 32 |
|
| Capitalized interest | | 3 |
| | 3 |
|
| Amortization of debt discount and deferred costs | | 1 |
| | 1 |
|
Interest portion of rental expense(2) | | 33 |
| | 32 |
|
| Total fixed charges | | $ | 68 |
| | $ | 68 |
|
| | | | | |
Ratio of earnings to fixed charges(3) | | 19.4 |
| | 17.4 |
|
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(1) The interest amount in the table above does not include interest expense associated with uncertain tax positions.
(2) Amounts represent those portions of rent expense that are reasonable approximations of interest costs.
(3) We have not issued preferred stock. Therefore, the ratio of earnings to combined fixed charges and preferred stock dividends are the same as the ratios presented above.
