EXHIBIT 12

 

CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

 

 

Nine months ended

 

 

 

October 1,

 

September 25,

 

 

 

2006

 

2005

 

 

 

Millions

Earnings

Earnings before income taxes and minority interests

$

800

$

555

Add:

   Fixed charges

102

109

   Amortization of capitalized interest

4

3

   Distributed income of equity investees

46

67

Less:

   Equity in earnings of investees

(89

)

(85

)

   Capitalized interest

(2

)

(2

)

Earnings before fixed charges

$

861

$

647

Fixed charges

Interest expense

$

76

$

83

Capitalized interest

2

2

Amortization of premiums, discounts and capitalized expenses related to indebtedness

-

1

Interest portion of rental expense(1)

24

23

Total fixed charges

$

102

$

109

Ratio of earnings to fixed charges

8.4

5.9

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