EX-12 10 dex12.txt STATEMENT OF COMPUTATION OF RATIO OF EARINGS TO FIXED CHARGES EXHIBIT 12 HOUSEHOLD INTERNATIONAL, INC. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
----------------------------------------------------------------------------------------- March 29 January 1 Three months through through ended March 31, March 28, March 31, (In millions) 2003 2003 2002 ----------------------------------------------------------------------------------------- (Successor) (Predecessor) (Predecessor) Net income $ 9.7 $ 245.7 $ 491.0 Income taxes 5.0 181.8 254.5 ----------------------------------------------------------------------------------------- Income before income taxes 14.7 427.5 745.5 ----------------------------------------------------------------------------------------- Fixed charges: Interest expense (1) 14.6 898.1 937.2 Interest portion of rentals (2) 0.6 18.2 16.4 ----------------------------------------------------------------------------------------- Total fixed charges 15.2 916.3 953.6 ----------------------------------------------------------------------------------------- Total earnings as defined $29.9 $1,343.8 $1,699.1 ========================================================================================= Ratio of earnings to fixed charges (4) 1.97 1.47 1.78 Preferred stock dividends (3) $ 1.1 $ 32.3 $ 12.9 Ratio of earnings to combined fixed charges and preferred stock dividends (4) 1.83 1.42 1.76 -----------------------------------------------------------------------------------------
(1) For financial statement purposes, interest expense includes income earned on temporary investment of excess funds, generally resulting from over-subscriptions of commercial paper. (2) Represents one-third of rentals, which approximates the portion representing interest. (3) Preferred stock dividends are grossed up to their pretax equivalents. (4) The 2003 ratio for the eighty-seven day period ending March 28, 2003, has been negatively impacted by $170.9 million (after-tax) of HSBC acquisition related costs incurred by Household. Excluding this item, our ratio of earnings to fixed charges would have been 1.69 percent for the eighty-seven day period ended March 28, 2003 (predecessor), and our ratio of earnings to combined fixed charges and preferred stock dividends would have been 1.64 percent for the eighty-seven day period ended March 28, 2003 (predecessor). These non-GAAP financial ratios are provided for comparison of our operating trends only.