EX-12.1 3 a2195127zex-12_1.htm EXHIBIT 12.1

Exhibit 12.1

 

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratios)

 

 

 

Fiscal Year Ended December 31,

 

Nine Months
Ended
September 30,

 

 

 

2004

 

2005

 

2006

 

2007

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before provision (benefit) for income taxes

 

100

 

331

 

405

 

578

 

(813

)

(58

)

 Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges, net of capitalized interest

 

226

 

262

 

289

 

251

 

277

 

212

 

Total earnings available for fixed charges

 

326

 

593

 

694

 

829

 

(536

)

154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

327

 

181

 

208

 

187

 

174

 

154

 

Add back interest income, which is netted in interest expense

 

2

 

8

 

11

 

6

 

6

 

1

 

Add back refinance charges/gains (losses) on bond repurchases/retirement of subordinated convertible debentures, included in interest expense

 

(171

)

—

 

—

 

—

 

41

 

29

 

Interest expense — subordinated convertible debentures, net

 

14

 

14

 

13

 

9

 

9

 

(6

)

Capitalized interest

 

—

 

1

 

1

 

2

 

1

 

1

 

Interest component of rent expense

 

50

 

55

 

53

 

49

 

47

 

34

 

Interest expense — discontinued operation

 

4

 

4

 

4

 

—

 

—

 

—

 

Fixed charges

 

226

 

263

 

290

 

253

 

278

 

213

 

Ratio of earnings to fixed charges

 

1.4

x

2.3

x

2.4

x

3.3

x

—

(2)(3)

—

(2)

 

(1)

 

Fixed charges consist of interest expense, which includes amortization of deferred finance charges, interest expense-subordinated debentures, capitalized interest and imputed interest on our lease obligations. The interest component of rent was determined based on an estimate of a reasonable interest factor at the inception of the leases.

(2)

 

Due to our losses for the year ended December 31, 2008 and the nine months ended September 30, 2009, the ratio coverage was less than 1:1 for these periods. We would have had to have generated additional earnings of $814 million for the year ended December 31, 2008 and $59 million for the nine months ended September 30, 2009 to have achieved coverage ratios of 1:1.

(3)

 

The loss for the year ended December 31, 2008 includes the effect of an $1,147 million pretax non-cash goodwill impairment charge. The effect of this charge was to reduce the ratio of earnings to fixed charges.  Had this charge been excluded from the calculation, the ratio of earnings to fixed charges would have been 2.2x for the year ended December 31, 2008.