EX-12 3 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES. Computation of Ratio of Earnings to Fixed Charges.

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 March 31,
 

(in millions)

   2010     2009  

Fixed Charges:

    

Interest expense

   $ 153      $ 130   

Capitalized interest

     —          2   

Portion of rental expense which represents interest factor

     43        22   
                

Total Fixed Charges

   $ 196      $ 154   
                

Earnings Available for Fixed Charges:

    

Pre-tax income

   $ (10   $ 78   

Distributed equity income of affiliated companies

     1        —     

Add: Fixed charges

     196        154   

Less: Capitalized interest

     —          (2

Less: Net income-noncontrolling interests

     (8     (7
                

Total Earnings Available for Fixed Charges

   $ 179      $ 223   
                

Ratio of Earnings to Fixed Charges

     *        1.45   
                

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend:

 

     Three Months
Ended March 31,

(in millions)

   2010    2009

Fixed Charges:

     

Interest expense

   $ 153    $ 130

Capitalized interest

     —        2

Portion of rental expense which represents interest factor

     43      22
             

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

     196      154

Preferred stock dividends pre-tax income requirements

     6      —  
             

Total Combined Fixed Charges and Preferred Stock Dividends

   $ 202    $ 154
             

 

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EXHIBIT 12

 

     Three Months
Ended March 31,
 

(in millions)

   2010     2009  

Earnings Available for Fixed Charges:

    

Pre-tax income

   $ (10   $ 78   

Distributed equity income of affiliated companies

     1        —     

Add: Fixed charges

     202        154   

Less: Capitalized interest

     —          (2

Less: Net income-noncontrolling interests

     (8     (7
                

Total Earnings Available for Fixed Charges and Preferred Stock Dividends

   $ 185      $ 223   
                

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

     *        1.45   
                

 

*

Earnings for the three months ended March 31, 2010 were inadequate to cover fixed charges by $17.

 

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