EX-12 2 l19858aexv12.htm EX-12 RATIO OF EARNINGS TO FIXED CHARGES EX-12
 

Eaton Corporation
First Quarter 2006 Report on Form 10-Q
Item 6
Exhibit 12
Ratio of Earnings to Fixed Charges
                                                 
    Three        
    months        
    ended        
    March 31,     Year ended December 31  
    2006     2005     2004     2003     2002     2001  
Income before income taxes
   $ 253     $ 996     $ 781     $ 508     $ 399     $ 278  
 
                                                
Adjustments
                                                
Minority interests in consolidated subsidiaries
     1       5       7       12       14       8  
Income of equity investees
     2       1       —       (3 )     (1 )     —  
Interest expensed
     33       109       88       93       110       149  
Amortization of debt issue costs
     —       1       1       2       2       1  
Estimated portion of rent expense representing interest
     10       39       38       38       34       38  
Amortization of capitalized interest
     3       12       17       13       13       13  
Distributed income of equity investees
     —       4       3       —       —       —  
 
                                    
Adjusted income before income taxes
   $ 302     $ 1,167     $ 935     $ 663     $ 571     $ 487  
 
                                    
 
                                                
Fixed charges
                                                
Interest expensed
   $ 33     $ 109     $ 88     $ 93     $ 110     $ 149  
Interest capitalized
     3       13       7       7       8       12  
Amortization of debt issue costs
     —       1       1       2       2       1  
Estimated portion of rent expense representing interest
     10       39       38       38       34       38  
 
                                    
Total fixed charges
   $ 46     $ 162     $ 134     $ 140     $ 154     $ 200  
 
                                    
Ratio of earnings to fixed charges
     6.57       7.20       6.98       4.73       3.71       2.44  
Income before income taxes for 2001 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.

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