EX-12 13 xrx-123116xex12.htm EXHIBIT 12 Exhibit
EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends, 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.
 
 
Year Ended December 31,
(in millions)
 
2016
 
2015
 
2014
 
2013
 
2012
Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Interest expense(1) 
 
$
340

 
$
355

 
$
381

 
$
406

 
$
430

Capitalized interest(1)
 
—

 
—

 
4

 
4

 
13

Portion of rental expense which represents interest factor(1) 
 
178

 
228

 
273

 
251

 
215

Total Fixed Charges
 
$
518

 
$
583

 
$
658

 
$
661

 
$
658

 
 
 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Pre-tax income
 
$
568

 
$
924

 
$
1,090

 
$
910

 
$
934

Distributed equity income of affiliated companies
 
52

 
56

 
69

 
78

 
62

Add: Fixed charges
 
518

 
583

 
658

 
661

 
658

Less: Capitalized interest
 
—

 
—

 
(4
)
 
(4
)
 
(13
)
Less: Net income attributable to noncontrolling interests
 
(11
)
 
(18
)
 
(23
)
 
(20
)
 
(28
)
Total Earnings Available for Fixed Charges
 
$
1,127

 
$
1,545

 
$
1,790

 
$
1,625

 
$
1,613

 
 


 
 

 
 

 
 

 
 

Ratio of Earnings to Fixed Charges
 
2.18

 
2.65

 
2.72

 
2.46

 
2.45

 
 
 
 
 
 
 
 
 
 
 
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Interest expense(1) 
 
$
340

 
$
355

 
$
381

 
$
406

 
$
430

Capitalized interest(1)
 
—

 
—

 
4

 
4

 
13

Portion of rental expense which represents interest factor(1) 
 
178

 
228

 
273

 
251

 
215

Total Fixed charges before preferred stock dividends pre-tax income requirements
 
518

 
583

 
658

 
661

 
658

Preferred stock dividends pre-tax income requirements
 
39

 
39

 
39

 
39

 
39

Total Combined Fixed Charges and Preferred Stock Dividends
 
$
557

 
$
622

 
$
697

 
$
700

 
$
697

Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Pre-tax income
 
$
568

 
$
924

 
$
1,090

 
$
910

 
$
934

Distributed equity income of affiliated companies
 
52

 
56

 
69

 
78

 
62

Add: Fixed charges before preferred stock dividends
 
518

 
583

 
658

 
661

 
658

Less: Capitalized interest
 
—

 
—

 
(4
)
 
(4
)
 
(13
)
Less: Net income attributable to noncontrolling interests
 
(11
)
 
(18
)
 
(23
)
 
(20
)
 
(28
)
Total Earnings Available for Fixed Charges and Preferred Stock Dividends
 
$
1,127

 
$
1,545

 
$
1,790

 
$
1,625

 
$
1,613

 
 
 
 
 
 
 
 
 
 
 
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
 
2.02

 
2.48

 
2.57

 
2.32

 
2.31

_______________

(1)
Includes amounts related to discontinued operations. Refer to Note 4 - Divestitures in our Consolidated Financial Statements, which is incorporated by reference for additional information regarding our discontinued operations.