EXHIBIT 12

 

CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

 

 

Six months ended

 

 

 

June 29,

 

July 1,

 

 

 

2008

 

2007

 

 

Millions

Earnings

Earnings before income taxes and minority interests

$

761

$

567

Add:

   Fixed charges

48

52

   Amortization of capitalized interest

2

3

   Distributed income of equity investees

61

55

Less:

   Equity in earnings of investees

125

83

   Capitalized interest

3

3

Earnings before fixed charges

$

744

$

591

Fixed charges

Interest expense

$

23

$

30

Capitalized interest

3

3

Amortization of debt discount

1

1

Interest portion of rental expense(1)

21

18

Total fixed charges

$

48

$

52

Ratio of earnings to fixed charges

15.5

11.4

           

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