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Content analysis
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8th grade Avg
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EXHIBIT 12
CUMMINS INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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| Three months ended |
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In millions |
| April 1, 2012 |
| March 27, 2011 |
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Earnings |
|
|
|
|
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Earnings before income taxes and noncontrolling interests |
| $ | 650 |
| $ | 522 |
|
Add |
|
|
|
|
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Fixed charges |
| 25 |
| 25 |
| ||
Amortization of capitalized interest |
| 1 |
| 1 |
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Distributed income of equity investees |
| 31 |
| 22 |
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Less |
|
|
|
|
| ||
Equity in earnings of investees |
| 92 |
| 87 |
| ||
Capitalized interest |
| 2 |
| 1 |
| ||
Earnings before fixed charges |
| $ | 613 |
| $ | 482 |
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|
|
|
|
|
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Fixed charges |
|
|
|
|
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Interest expense |
| $ | 8 |
| $ | 10 |
|
Capitalized interest |
| 2 |
| 1 |
| ||
Amortization of debt discount |
| — |
| 1 |
| ||
Interest portion of rental expense (1) |
| 15 |
| 13 |
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Total fixed charges |
| $ | 25 |
| $ | 25 |
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Ratio of earnings to fixed charges |
| 24.5 |
| 19.3 |
|
(1) | Amounts represent those portions of rent expense that are reasonable approximations of interest costs. |