EXHIBIT 12

 

CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

 

 

Nine months ended

 

 

 

September 28,

 

September 30,

 

 

 

2008

 

2007

 

 

 

Millions

 

Earnings

 

 

 

 

 

Earnings before income taxes and minority interests

 

$

1,131

 

$

859

 

Add:

 

 

 

 

 

   Fixed charges

 

72

 

77

 

   Amortization of capitalized interest

 

3

 

4

 

   Distributed income of equity investees

 

101

 

71

 

Less:

 

 

 

 

 

   Equity in earnings of investees

 

186

 

137

 

   Capitalized interest

 

5

 

4

 

Earnings before fixed charges

 

$

1,116

 

$

870

 

 

 

 

 

 

 

Fixed charges

 

 

 

 

 

Interest expense

 

$

33

 

$

44

 

Capitalized interest

 

5

 

4

 

Amortization of debt discount

 

2

 

1

 

Interest portion of rental expense(1)

 

32

 

28

 

Total fixed charges

 

$

72

 

$

77

 

 

 

 

 

 

 

Ratio of earnings to fixed charges

 

15.5

 

11.3

 

 

 

(1) Amounts represent those portions of rent expense that are reasonable approximations of interest costs.