EXHIBIT 12
 
CUMMINS INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 
 
 
Three months ended
In millions
 
March 29, 2015
 
March 30, 2014
Earnings
 
 

 
 

Income before income taxes
 
$
548

 
$
511

Add
 
 

 
 

Fixed charges
 
32

 
34

Distributed income of equity investees
 
61

 
26

Less
 
 

 
 

Equity in earnings of investees
 
58

 
79

Capitalized interest
 
1

 
2

Earnings before fixed charges
 
$
582


$
490

 
 
 
 
 
Fixed charges
 
 

 
 
Interest expense(1)
 
$
14

 
$
17

Capitalized interest
 
1

 
2

Amortization of debt discount and deferred costs
 
1

 
—

Interest portion of rental expense(2)
 
16

 
15

Total fixed charges
 
$
32

 
$
34

 
 
 
 
 
Ratio of earnings to fixed charges(3)
 
18.2

 
14.4

___________________________________________________
(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.