EX-12 2 d249849dex12.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
September 30,
 
Nine Months Ended
September 30,
(in millions)
 
2011
 
2010
 
2011
 
2010
Fixed Charges:
 
 
 
 
 
 
 
 
Interest expense
 
$
116

 
$
148

 
$
367

 
$
454

Capitalized interest
 
3

 
1

 
9

 
3

Portion of rental expense which represents interest factor
 
56

 
64

 
169

 
161

Total Fixed Charges
 
$
175

 
$
213

 
$
545

 
$
618

 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
Pre-tax income
 
$
367

 
$
328

 
$
1,118

 
$
638

Add: Distributed equity income of affiliated companies
 
—

 
—

 
28

 
17

Add: Fixed charges
 
175

 
213

 
545

 
618

Less: Capitalized interest
 
(3
)
 
(1
)
 
(9
)
 
(3
)
Less: Net income-noncontrolling interests
 
(9
)
 
(6
)
 
(25
)
 
(23
)
Total Earnings Available for Fixed Charges
 
$
530

 
$
534

 
$
1,657

 
$
1,247

 
 
 

 
 

 
 

 
 

Ratio of Earnings to Fixed Charges
 
3.03

 
2.51

 
3.04

 
2.02

 
 
 
 
 
 
 
 
 
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends:
 
 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
Interest expense
 
$
116

 
$
148

 
$
367

 
$
454

Capitalized interest
 
3

 
1

 
9

 
3

Portion of rental expense which represents interest factor
 
56

 
64

 
169

 
161

Total Fixed Charges before preferred stock dividends pre-tax income requirements
 
175

 
213

 
545

 
618

Preferred stock dividends pre-tax income requirements
 
10

 
9

 
29

 
25

Total Combined Fixed Charges and Preferred Stock Dividends
 
$
185

 
$
222

 
$
574

 
$
643

 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
Pre-tax income
 
$
367

 
$
328

 
$
1,118

 
$
638

Add: Distributed equity income of affiliated companies
 
—

 
—

 
28

 
17

Add: Fixed charges before preferred stock dividends
 
175

 
213

 
545

 
618

Less: Capitalized interest
 
(3
)
 
(1
)
 
(9
)
 
(3
)
Less: Net income-noncontrolling interests
 
(9
)
 
(6
)
 
(25
)
 
(23
)
Total Earnings Available for Fixed Charges and Preferred Stock Dividends
 
$
530

 
$
534

 
$
1,657

 
$
1,247

 
 
 
 
 
 
 
 
 
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
 
2.86

 
2.41

 
2.89

 
1.94