EX-12.1 6 exhibit121-ratioofearnings.htm RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 - Ratio of Earnings to Fixed Charges


Exhibit 12.1

RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges included herein is calculated in accordance with the rules of the Securities and Exchange Commission. The foregoing is calculated differently than a similarly titled ratio and covenant in the company's senior secured credit facility. As previously disclosed, the company is in compliance and expects to remain in compliance with the covenants in its credit facility.

 
 
Six Months Ended
 
 
 
 
June 30
 
Year Ended December 31,
(Dollars in millions)
 
2013
 
2012
 
2011
 
2010
 
2009
 
2008
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
Add:
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes
 
$
34

 
$
(298
)
 
$
(25
)
 
$
59

 
$
91

 
$
(332
)
Fixed charges (see below)
 
53

 
90

 
86

 
99

 
104

 
133

 
 
87

 
(208
)
 
60

 
158

 
195

 
(199
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtract:
 
 
 
 
 
 
 
 
 
 
 
 
Undistributed shares of income (loss) of less-than-fifty-percent-owned investees
 
—

 
(33
)
 
(6
)
 
(3
)
 
17

 
10

Capitalized interest
 
1

 
1

 
—

 
—

 
—

 
—

 
 
1

 
(33
)
 
(6
)
 
(3
)
 
17

 
10

Total earnings (as defined)
 
$
85

 
$
(175
)
 
$
67

 
$
161

 
$
178

 
$
(209
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
$
29

 
$
45

 
$
52

 
$
57

 
$
62

 
$
81

Capitalized interest
 
1

 
1

 
—

 
—

 
—

 
—

Estimated interest component of rental expense
 
22

 
43

 
34

 
42

 
42

 
52

Total fixed charges (as defined)
 
$
53

 
$
90

 
$
86

 
$
99

 
$
104

 
$
133

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of Earnings to Fixed Charges (a)
 
1.61x
 
(b)
 
(b)
 
1.63x
 
1.71x
 
(b)
Table may not total due to rounding.
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Earnings is the amount resulting from adding and subtracting the following items. Add the following: (i) pre-tax income from continuing operations before adjustment for income or loss from equity investees; and (ii) fixed charges. From the total of the added items, subtract the following: (i) interest capitalized; and (ii) undistributed income (loss) of equity investees. Total fixed charges is the sum of interest expense, capitalized interest and the estimated interest component of rental expense. Consistent with the company's accounting policy, interest related to uncertain tax positions is included as a component of income tax expense, and is not included in fixed charges.
(b)
For these periods, earnings were inadequate to cover fixed charges. The amount of the coverage deficiencies were: $265 million for the year ended December 31, 2012; $19 million for the year ended December 31, 2011; and $342 million for the year ended December 31, 2008.