EX-12.1 3 a12-24317_2ex12d1.htm EX-12.1

Exhibit 12.1

 

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(In millions, except ratios)

 

 

 

Year Ended December 31,

 

Nine Months
Ended September 30,

 

 

 

2007

 

2008

 

2009

 

2010

 

2011

 

2012

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

578

 

$

(813

)

$

(107

)

$

(63

)

$

164

 

$

49

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges, net of capitalized interest

 

251

 

277

 

288

 

279

 

271

 

 

365

 

 

Total earnings available for fixed charges

 

829

 

(536

)

181

 

216

 

435

 

 

414

 

 

Fixed charges (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

187

 

174

 

226

 

255

 

228

 

 

316

 

 

Add back interest income, which is netted in interest expense

 

6

 

6

 

1

 

1

 

1

 

 

—

 

 

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

 

—

 

41

 

20

 

(28

)

(5

)

 

—

 

 

Interest expense—subordinated convertible debentures, net

 

9

 

9

 

(4

)

8

 

7

 

 

3

 

 

Capitalized interest

 

2

 

1

 

1

 

—

 

—

 

 

—

 

 

Interest component of rent expense

 

49

 

47

 

45

 

43

 

40

 

 

46

 

 

Fixed charges

 

$

253

 

$

278

 

$

289

 

$

279

 

$

271

 

$

365

 

 

Ratio of earnings to fixed charges

 

3.3x

 

—(2)(3)

 

—(2)

 

—(2)

 

1.6x

 

 

1.1x

 

 

 

(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 years ended December 31, 2010, 2009 and 2008, the ratio coverage was less than 1:1 for these years. We would have had to have generated additional earnings of $63, $108 and $814 for the years ended December 31, 2010, 2009 and 2008, respectively, 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 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.