EX-12 3 xrx-63012xex12.htm EARNINGS TO FIXED CHARGES XRX-6.30.12-Ex12


EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges, the ratio of earnings to combined fixed charges and preferred stock dividends, as well as any deficiency of earnings are determined using the following applicable factors:
 
Earnings available for fixed charges are calculated first, by determining the sum of: (a) income from continuing operations before income taxes and equity income; (b) distributed equity income; (c) fixed charges, as defined below; and (d) amortization of capitalized interest, if any. From this total, we subtract capitalized interest and net income attributable to noncontrolling interests.
 
Fixed charges are calculated as the sum of: (a) interest costs (both expensed and capitalized); (b) amortization of debt expense and discount or premium relating to any indebtedness; and (c) that portion of rental expense that is representative of the interest factor.

Preferred stock dividends used in the ratio of earnings to combined fixed charges and preferred stock dividends consist of the amount of pre-tax earnings required to cover dividends paid on our Series A convertible preferred stock.
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
(in millions)
 
2012
 
2011
 
2012
 
2011
Fixed Charges:
 
 
 
 
 
 
 
 
Interest expense
 
$
109

 
$
124

 
$
218

 
$
251

Capitalized interest
 
4

 
4

 
8

 
6

Portion of rental expense which represents interest factor
 
57

 
56

 
114

 
113

Total Fixed Charges
 
$
170

 
$
184

 
$
340

 
$
370

 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
Pre-tax income
 
$
351

 
$
401

 
$
664

 
$
751

Add: Distributed equity income of affiliated companies
 
27

 
27

 
36

 
28

Add: Fixed charges
 
170

 
184

 
340

 
370

Less: Capitalized interest
 
(4
)
 
(4
)
 
(8
)
 
(6
)
Less: Net income-noncontrolling interests
 
(7
)
 
(8
)
 
(14
)
 
(16
)
Total Earnings Available for Fixed Charges
 
$
537

 
$
600

 
$
1,018

 
$
1,127

 
 
 

 
 

 
 

 
 

Ratio of Earnings to Fixed Charges
 
3.16

 
3.26

 
2.99

 
3.05

 
 
 
 
 
 
 
 
 
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends:
 
 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
Interest expense
 
$
109

 
$
124

 
$
218

 
$
251

Capitalized interest
 
4

 
4

 
8

 
6

Portion of rental expense which represents interest factor
 
57

 
56

 
114

 
113

Total Fixed Charges before preferred stock dividends pre-tax income requirements
 
170

 
184

 
340

 
370

Preferred stock dividends pre-tax income requirements
 
9

 
9

 
19

 
19

Total Combined Fixed Charges and Preferred Stock Dividends
 
$
179

 
$
193

 
$
359

 
$
389

 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
Pre-tax income
 
$
351

 
$
401

 
$
664

 
$
751

Add: Distributed equity income of affiliated companies
 
27

 
27

 
36

 
28

Add: Fixed charges before preferred stock dividends
 
170

 
184

 
340

 
370

Less: Capitalized interest
 
(4
)
 
(4
)
 
(8
)
 
(6
)
Less: Net income-noncontrolling interests
 
(7
)
 
(8
)
 
(14
)
 
(16
)
Total Earnings Available for Fixed Charges and Preferred Stock Dividends
 
$
537

 
$
600

 
$
1,018

 
$
1,127

 
 
 
 
 
 
 
 
 
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
 
3.00

 
3.11

 
2.84

 
2.90