EXHIBIT 12
 
CUMMINS INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 
 
 
Six months ended
In millions
 
July 3, 2016
 
June 28, 2015
Earnings
 
 

 
 

Income before income taxes
 
$
1,040

 
$
1,252

Add
 
 

 
 

Fixed charges
 
74

 
68

Amortization of capitalized interest
 
1

 
1

Distributed income of equity investees
 
51

 
146

Less
 
 

 
 

Equity in earnings of investees
 
141

 
143

Capitalized interest
 
3

 
3

Earnings before fixed charges
 
$
1,022


$
1,321

 
 
 
 
 
Fixed charges
 
 

 
 
Interest expense(1)
 
$
35

 
$
31

Capitalized interest
 
3

 
3

Amortization of debt discount and deferred costs
 
1

 
1

Interest portion of rental expense(2)
 
35

 
33

Total fixed charges
 
$
74

 
$
68

 
 
 
 
 
Ratio of earnings to fixed charges(3)
 
13.8

 
19.4

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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.