EX-12 5 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 June 30,
    Six Months
Ended June 30,
 

(in millions)

   2011     2010     2011     2010  

Fixed Charges:

        

Interest expense

   $           124      $           153      $           251      $           306   

Capitalized interest

     4        2        6        2   

Portion of rental expense which represents interest factor

     56        54        113        97   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Fixed Charges

   $ 184      $ 209      $ 370      $ 405   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Available for Fixed Charges:

        

Pre-tax income

   $ 401      $ 320      $ 751      $ 310   

Distributed equity income of affiliated companies

     27        16        28        17   

Add: Fixed charges

     184        209        370        405   

Less: Capitalized interest

     (4     (2     (6     (2

Less: Net income-noncontrolling interests

     (8     (9     (16     (17
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Earnings Available for Fixed Charges

   $ 600      $ 534      $ 1,127      $ 713   
  

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of Earnings to Fixed Charges

     3.26        2.56        3.05        1.76   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

Fixed Charges:

        

Interest expense

   $           124      $           153      $           251      $           306   

Capitalized interest

     4        2        6        2   

Portion of rental expense which represents interest factor

     56        54        113        97   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     184        209        370        405   

Preferred stock dividends pre-tax income requirements

     9        10        19        16   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Combined Fixed Charges and Preferred Stock Dividends

   $ 193      $ 219      $ 389      $ 421   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Available for Fixed Charges:

        

Pre-tax income

   $ 401      $ 320      $ 751      $ 310   

Distributed equity income of affiliated companies

     27        16        28        17   

Add: Fixed charges before preferred stock dividends

     184        209        370        405   

Less: Capitalized interest

     (4     (2     (6     (2

Less: Net income-noncontrolling interests

     (8     (9     (16     (17
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Earnings Available for Fixed Charges and Preferred Stock Dividends

   $ 600      $ 534      $ 1,127      $ 713   
  

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

     3.11        2.44        2.90        1.69