EX-12 4 xrx-93013xex12.htm EXHIBIT XRX-9.30.13-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
September 30,
 
Nine Months Ended
September 30,
(in millions)
 
2013
 
2012
 
2013
 
2012
Fixed Charges:
 
 
 
 
 
 
 
 
Interest expense
 
$
100

 
$
105

 
$
308

 
$
325

Capitalized interest
 
—

 
3

 
3

 
11

Portion of rental expense which represents interest factor
 
69

 
53

 
188

 
167

Total Fixed Charges
 
$
169

 
$
161

 
$
499

 
$
503

Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
Pre-tax income
 
$
335

 
$
314

 
$
967

 
$
966

Add: Distributed equity income of affiliated companies
 
2

 
2

 
41

 
38

Add: Fixed charges
 
169

 
161

 
499

 
503

Less: Capitalized interest
 
—

 
(3
)
 
(3
)
 
(11
)
Less: Net income-noncontrolling interests
 
(5
)
 
(6
)
 
(15
)
 
(20
)
Total Earnings Available for Fixed Charges
 
$
501

 
$
468

 
$
1,489

 
$
1,476

Ratio of Earnings to Fixed Charges
 
2.96

 
2.91

 
2.98

 
2.93

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends:
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
Interest expense
 
$
100

 
$
105

 
$
308

 
$
325

Capitalized interest
 
—

 
3

 
3

 
11

Portion of rental expense which represents interest factor
 
69

 
53

 
188

 
167

Total Fixed Charges before preferred stock dividends pre-tax income requirements
 
169

 
161

 
499

 
503

Preferred stock dividends pre-tax income requirements
 
10

 
10

 
29

 
29

Total Combined Fixed Charges and Preferred Stock Dividends
 
$
179

 
$
171

 
$
528

 
$
532

Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
Pre-tax income
 
$
335

 
$
314

 
$
967

 
$
966

Add: Distributed equity income of affiliated companies
 
2

 
2

 
41

 
38

Add: Fixed charges before preferred stock dividends
 
169

 
161

 
499

 
503

Less: Capitalized interest
 
—

 
(3
)
 
(3
)
 
(11
)
Less: Net income-noncontrolling interests
 
(5
)
 
(6
)
 
(15
)
 
(20
)
Total Earnings Available for Fixed Charges and Preferred Stock Dividends
 
$
501

 
$
468

 
$
1,489

 
$
1,476

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
 
2.80

 
2.74

 
2.82

 
2.77