CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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For the years ended December 31, |
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2007 |
2006 |
2005 |
2004 |
2003 |
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Millions |
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| Earnings | |||||||||||||||||
| Earnings before income taxes, minority interests, dividends on preferred securities of subsidiary trust and cumulative effect of change in accounting principles | $ | 1,169 | $ | 1,083 | $ | 798 | $ | 432 | $ | 91 | |||||||
| Add: | |||||||||||||||||
| Fixed charges | 98 | 134 | 144 | 142 | 134 | ||||||||||||
| Amortization of capitalized interest | 6 | 5 | 5 | 4 | 3 | ||||||||||||
| Distributed income of equity investees | 107 | 75 | 110 | 60 | 17 | ||||||||||||
| Less: | |||||||||||||||||
| Equity in earnings of investees | (192 | ) | (119 | ) | (109 | ) | (99 | ) | (66 | ) | |||||||
| Capitalized interest | (1 | ) | (4 | ) | (2 | ) | — | (1 | ) | ||||||||
| Preferred dividends of consolidated subsidiaries | — | — | — | — | (11 | ) | |||||||||||
| Earnings before fixed charges | $ | 1,187 | $ | 1,174 | $ | 946 | $ | 539 | $ | 167 | |||||||
| Fixed charges | |||||||||||||||||
| Interest expense | $ | 58 | $ | 96 | $ | 109 | $ | 111 | $ | 90 | |||||||
| Capitalized interest | 1 | 4 | 2 | — | 1 | ||||||||||||
| Amortization of premiums, discounts, and capitalized expenses related to indebtedness | 1 | 1 | 2 | 4 | 2 | ||||||||||||
| Interest portion of rental expense(1) | 38 | 33 | 31 | 27 | 30 | ||||||||||||
| Preferred dividends of consolidated subsidiaries | — | — | — | — | 11 | ||||||||||||
| Total fixed charges | $ | 98 | $ | 134 | $ | 144 | $ | 142 | $ | 134 | |||||||
| Ratio of earnings to fixed charges | 12.1 | 8.8 | 6.6 | 3.8 | 1.2 | ||||||||||||