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Non-GAAP Reconciliation โ€“
     EBIT
  Millions                                                                   Three Months Ended                     For the Years Ended


                                                                  Dec. 31,        Dec. 31,         Sept. 25,        Dec. 31,       Dec. 31,
                                                                   2005            2004             2005             2005           2004

  Earnings before interest, income taxes, minority                $     269      $      172      $       240       $    907        $    543
  interest and restructuring charges
  Restructuring, asset impairment and other                       $      -       $        -      $        -        $      -        $      -


  Earnings before interest, income taxes and                      $     269      $      172      $       240       $    907        $    543
  minority interest
  Interest Expense                                                $     (26)     $      (30)     $       (27)      $    (109)      $    (111)


  Provision for income taxes                                      $     (63)     $      (12)     $       (61)      $    (216)      $     (56)


  Minority Interests in earnings of unconsolidated                $     (13)     $      (11)     $        (7)      $     (32)      $     (26)
  subsidiaries
  Net Earnings                                                    $     167      $      119      $       145       $    550        $    350

EBIT = Earnings before interest, taxes, and minority interests.

We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation
programs. The table above reconciles EBIT, a non-GAAP financial measure, to our consolidated net earnings, for each of the applicable periods.
Non-GAAP Reconciliation โ€“ Net
  Assets
Millions                                        Dec. 31,   Dec. 31,   Sept. 25,
                                                 2005       2004       2005
Net assets for operating segments               $ 3,479    $ 3,151     $ 3,312
Liabilities deducted in computing net assets       3,354      3,168      3,421
Minimum pension liability excluded from net        (837)      (826)       (826)
    assets
Deferred tax assets not allocated to segments        863        990        928
Debt-related costs not allocated to segments          26         27         27
Total assets                                    $ 6,885    $ 6,510     $ 6,862
Non-GAAP Reconciliation โ€“ ROANA

Millions                                      Three Months       For the Year
                                                 Ended              Ended
                                              Dec. 31, 2005      Dec. 31, 2005


Earnings before interest, income taxes and           $    269          $    907
    minority interest
Net Assets for operating segments at                     3,312             3,151
beginning of period
Net Assets for operating segments at end of              3,479             3,479
period
Average Net Assets for operating segments                3,396             3,315
    for period
ROANA                                                    32%               27%

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Cummins__q42005

  • 1. Non-GAAP Reconciliation โ€“ EBIT Millions Three Months Ended For the Years Ended Dec. 31, Dec. 31, Sept. 25, Dec. 31, Dec. 31, 2005 2004 2005 2005 2004 Earnings before interest, income taxes, minority $ 269 $ 172 $ 240 $ 907 $ 543 interest and restructuring charges Restructuring, asset impairment and other $ - $ - $ - $ - $ - Earnings before interest, income taxes and $ 269 $ 172 $ 240 $ 907 $ 543 minority interest Interest Expense $ (26) $ (30) $ (27) $ (109) $ (111) Provision for income taxes $ (63) $ (12) $ (61) $ (216) $ (56) Minority Interests in earnings of unconsolidated $ (13) $ (11) $ (7) $ (32) $ (26) subsidiaries Net Earnings $ 167 $ 119 $ 145 $ 550 $ 350 EBIT = Earnings before interest, taxes, and minority interests. We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. The table above reconciles EBIT, a non-GAAP financial measure, to our consolidated net earnings, for each of the applicable periods.
  • 2. Non-GAAP Reconciliation โ€“ Net Assets Millions Dec. 31, Dec. 31, Sept. 25, 2005 2004 2005 Net assets for operating segments $ 3,479 $ 3,151 $ 3,312 Liabilities deducted in computing net assets 3,354 3,168 3,421 Minimum pension liability excluded from net (837) (826) (826) assets Deferred tax assets not allocated to segments 863 990 928 Debt-related costs not allocated to segments 26 27 27 Total assets $ 6,885 $ 6,510 $ 6,862
  • 3. Non-GAAP Reconciliation โ€“ ROANA Millions Three Months For the Year Ended Ended Dec. 31, 2005 Dec. 31, 2005 Earnings before interest, income taxes and $ 269 $ 907 minority interest Net Assets for operating segments at 3,312 3,151 beginning of period Net Assets for operating segments at end of 3,479 3,479 period Average Net Assets for operating segments 3,396 3,315 for period ROANA 32% 27%