EX-12 4 ex12.htm EXHIBIT 12 ex12.htm
EXHIBIT 12

 
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, 2009, 2008, 2007, 2006 and 2005. 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,
  
      2009       2008       2007       2006       2005  
   
(In thousands)
FIXED CHARGES:
                                      
Interest Expense
   $ 191,022     $ 204,272     $ 202,403     $ 202,513     $ 132,971  
Net amortization of debt discount, premium and
                                        
   issuance expense
     5,778       3,136       743       12,130       2,186  
Capitalized Interest
     25,747       18,963       14,708       5,492       8,950  
Interest portion of rental expense
     7,576       6,386       6,645       6,234       6,700  
                                         
Total Fixed Charges
   $ 230,123     $ 232,757     $ 224,499     $ 226,369     $ 150,807  
                                         
EARNINGS:
                                        
Consolidated pre-tax income (loss) from
                                        
   continuing operations
   $ 251,480     $ 399,926     $ 323,970     $ 326,330     $ 203,148  
Earnings of equity investments
     (80,790 )     (75,030 )     (100,914 )     (141,370 )     (70,742 )
Distributed income from equity investments
     -       77,150       103,550       62,637       15,203  
Capitalized interest
     (25,747 )     (18,963 )     (14,708 )     (5,492 )     (8,950 )
Total fixed charges (from above)
     230,123       232,757       224,499       226,369       150,807  
                                         
Earnings Available for Fixed Charges
   $ 375,066     $ 615,840     $ 536,397     $ 468,474     $ 289,466  
                                         
                                         
Ratio of Earnings to Fixed Charges
     1.6       2.6       2.4       2.1       1.9