EXHIBIT 12
CUMMINS INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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| Nine months ended |
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|
| September 25, |
| September 26, |
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In millions |
| 2011 |
| 2010 |
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Earnings |
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|
|
|
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Earnings before income taxes and noncontrolling interests |
| $ | 1,913 |
| $ | 1,087 |
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Add: |
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|
|
|
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Fixed charges |
| 80 |
| 74 |
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Amortization of capitalized interest |
| 2 |
| 3 |
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Distributed income of equity investees |
| 288 |
| 150 |
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Less: |
|
|
|
|
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Equity in earnings of investees |
| 284 |
| 239 |
| ||
Capitalized interest |
| 2 |
| 4 |
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Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges |
| 1 |
| — |
| ||
Earnings before fixed charges |
| $ | 1,996 |
| $ | 1,071 |
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|
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|
|
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Fixed charges |
|
|
|
|
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Interest expense |
| $ | 34 |
| $ | 29 |
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Capitalized interest |
| 2 |
| 4 |
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Amortization of debt discount |
| 2 |
| 6 |
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Interest portion of rental expense (1) |
| 42 |
| 35 |
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Total fixed charges |
| $ | 80 |
| $ | 74 |
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|
|
|
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Ratio of earnings to fixed charges |
| 25.0 |
| 14.5 |
|
(1) Amounts represent those portions of rent expense that are reasonable approximations of interest costs.