EX-12 2 l08950aexv12.txt EXHIBIT 12 RATIO OF EARNINGS TO FIXED CHARGES . . . Exhibit 12 Eaton Corporation Quarterly Report on Form 10-Q Second Quarter 2004 Ratio of Earnings to Fixed Charges
Six months ended Year ended December 31 June 30, --------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- Income from continuing operations before income taxes $376 $508 $399 $278 $552 $ 943 Adjustments ----------- Minority interests in consolidated subsidiaries 4 12 14 8 8 2 Income of equity investees (2) (3) (1) - (1) (1) Interest expensed 42 93 110 149 182 159 Amortization of debt issue costs 1 2 2 1 1 - Estimated portion of rent expense representing interest 19 38 34 38 39 36 Amortization of capitalized interest 8 13 13 13 10 8 Distributed income of equity investees 3 - - - 1 - ---- ---- ---- ---- ---- ------ Adjusted income from continuing operations before income taxes $451 $663 $571 $487 $792 $1,147 ==== ==== ==== ==== ==== ====== Fixed charges ------------- Interest expensed $ 42 $ 93 $110 $149 $182 $ 159 Interest capitalized 3 7 8 12 22 21 Amortization of debt issue costs 1 2 2 1 1 - Estimated portion of rent expense representing interest 19 38 34 38 39 36 ---- ---- ---- ---- ---- ------ Total fixed charges $ 65 $140 $154 $200 $244 $ 216 ==== ==== ==== ==== ==== ====== Ratio of earnings to fixed charges 6.94 4.73 3.71 2.44 3.25 5.31
Income from continuing operations before income taxes for years before 2002 includes amortization expense related to goodwill and other intangible assets. Upon adoption of Statement of Financial Accounting Standard No. 142 on January 1, 2002, Eaton ceased amortization of goodwill and indefinite life intangible assets. 21