EX-12 4 ratio12.htm RATIO OF EARNINGS TO FIXED CHARGES ratio12.htm 
Exhibit 12
 
SOUTHERN UNION COMPANY
RATIO OF EARNINGS TO FIXED CHARGES 
 
The following table sets forth the ratio of earnings to fixed charges for Southern Union on a historical basis for the years ended December 31, 2008, 2007, 2006 and 2005, the six months ended December 31, 2004, and the year ended June 30, 2004.  For the purpose of calculating such ratios, “earnings” consist of pre-tax income from continuing operations before income or loss from equity investees, adjusted to reflect distributed income from equity investments, and fixed charges, less capitalized interest.  “Fixed charges” consist of interest costs, amortization of debt discount, premiums and issuance costs and an estimate of interest implicit in rentals.  No adjustment has been made to earnings for the amortization of capital interest for the periods presented as such amount is immaterial.  Interest on FIN 48 liabilities is excluded from the computation of fixed charges as it is recorded by Southern Union in income tax expense versus interest expense.
 
                           
 
          
      Year Ended December 31,    
6 Months Ended
December 31,
      
Year Ended June 30,
  
 
   
2008
    
2007
    
2006
    
2005
    
2004
    
2004
    
   
(dollars in thousands)
    
FIXED CHARGES:
                                      
Interest Expense
   $ 204,272     $ 202,403     $ 202,513     $ 132,971     $ 65,344     $ 137,967    
Net amortization of debt discount, premium and
                                                  
   issuance expense
     3,136       743       12,130       2,186       (446 )     (10,100 )  
Capitalized Interest
     18,963       14,708       5,492       8,950       2,614       3,865    
Interest portion of rental expense
     6,386       6,645       6,234       6,700       3,152       5,940    
                                                   
Total Fixed Charges
   $ 232,757     $ 224,499     $ 226,369     $ 150,807     $ 70,664     $ 137,672    
                                                   
EARNINGS:
                                                  
Consolidated pre-tax income (loss) from
                                                  
   continuing operations
   $ 399,926     $ 323,970     $ 326,330     $ 203,148     $ 16,954     $ 106,468    
Earnings of equity investments
     (75,030 )     (100,914 )     (141,370 )     (70,742 )     (4,745 )     (200 )  
Distributed income from equity investments
     77,150       103,550       62,637       15,203       -       174    
Capitalized interest
     (18,963 )     (14,708 )     (5,492 )     (8,950 )     (2,614 )     (3,865 )  
Total fixed charges (from above)
     232,757       224,499       226,369       150,807       70,664       137,672    
                                                   
Earnings Available for Fixed Charges
   $ 615,840     $ 536,397     $ 468,474     $ 289,466     $ 80,259     $ 240,249    
                                                   
                                                   
Ratio of Earnings to Fixed Charges
     2.6       2.4       2.1       1.9       1.1       1.7