EX-12 3 dex12.htm STATEMENT RE COMPUTATION OF RATIOS Statement re computation of ratios

EXHIBIT 12.

Computation of Earnings to Fixed Charges

Five-Year Ratio of Earnings to Fixed Charges:

 

Dollars in Millions    2007     2006     2005     2004      2003  

Earnings

           

Earnings from continuing operations before minority interest and income taxes

   $ 3,534     $ 2,400     $ 4,304     $ 4,210      $ 4,529  

Less:

           

Equity in net income of affiliates

     524       474       334       273        151  
                                         

Income adjusted for equity income

     3,010       1,926       3,970       3,937        4,378  

Add:

           

Fixed charges

     512       566       408       369        361  

Distributed income of equity investments

     409       439       383       278        155  

Pre-tax losses of equity investees

     12       10       9       3        40  

Less:

           

Capitalized interest

     (35 )     (18 )     (9 )     (10 )      (35 )
                                         

Total Earnings

   $ 3,908     $ 2,923     $ 4,761     $ 4,577      $ 4,899  
                                         

Fixed Charges

           

Interest and debt expense

   $ 422     $ 498     $ 349     $ 310      $ 277  

Capitalized interest

     35       18       9       10        35  

One-third of rental expense (1)

     55       50       50       49        49  
                                         

Total Fixed Charges

   $ 512     $ 566     $ 408     $ 369      $ 361  
                                         

Ratio of Earnings to Fixed Charges

     7.63       5.16       11.67       12.40        13.57  

 

(1) Rents included in the computation consist of one-third of rental expense which we believe to be a conservative estimate of an interest factor in our leases, which are not material.

 

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