EXHIBIT 12
CUMMINS INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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For the six months ended |
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June 27, |
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June 28, |
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In millions |
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2010 |
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2009 |
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Earnings |
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Earnings before income taxes and noncontrolling interests |
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$ |
649 |
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$ |
120 |
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Add: |
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Fixed charges |
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50 |
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42 |
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Amortization of capitalized interest |
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2 |
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2 |
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Distributed income of equity investees |
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116 |
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145 |
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Less: |
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Equity in earnings of investees |
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158 |
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83 |
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Capitalized interest |
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3 |
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3 |
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Earnings before fixed charges |
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$ |
656 |
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$ |
223 |
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Fixed charges |
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Interest expense |
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$ |
18 |
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$ |
17 |
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Capitalized interest |
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3 |
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3 |
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Amortization of debt discount |
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5 |
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1 |
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Interest portion of rental expense(1) |
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24 |
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21 |
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Total fixed charges |
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$ |
50 |
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$ |
42 |
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Ratio of earnings to fixed charges |
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13.1 |
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5.3 |
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(1) Amounts represent those portions of rent expense that are reasonable approximations of interest costs.