exv12

EX-12 2 c92348q3exv12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES exv12

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND

TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS


		Nine months		March 29		January 1
		ended		through		through
		September 30,		September 30,		March 28,
		2004		2003		2003


				(Successor)		(Predecessor)
		(Successor)		(Restated)
		(Restated)		(in millions)
Net income		$	1,228	$	765	$	246
Income tax expense			619		384		182

Income before income tax expense			1,847		1,149		428

Fixed charges:
	Interest expense⁽¹⁾		2,225		1,362		898
	Interest portion of rentals⁽²⁾		39		26		18

Total fixed charges			2,264		1,388		916

Total earnings as defined		$	4,111	$	2,537	$	1,344

Ratio of earnings to fixed charges			1.82		1.83		1.47	⁽⁴⁾
Preferred stock dividends⁽³⁾			81		59		32
Ratio of earnings to combined fixed charges and preferred stock dividends			1.75		1.75		1.42	⁽⁴⁾

⁽¹⁾ For financial statement purposes for the periods January 1 through March 28, 2003 and March 29 through September 30, 2003, these amounts are reduced for income earned on temporary investment of excess funds, generally resulting from over-subscriptions of commercial paper issuances.

⁽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 ratios for the period January 1 through March 28, 2003 have been negatively impacted by $167 million (after-tax) of HSBC acquisition related costs and other merger related items incurred by Household. Excluding these charges, our ratio of earnings to fixed charges would have been 1.69 and our ratio of earnings to combined fixed charges and preferred stock dividends would have been 1.63. These non-GAAP financial ratios are provided for comparison of our operating trends only.


⁽¹⁾	For financial statement purposes for the periods January 1 through March 28, 2003 and March 29 through September 30, 2003, these amounts are reduced for income earned on temporary investment of excess funds, generally resulting from over-subscriptions of commercial paper issuances.

⁽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 ratios for the period January 1 through March 28, 2003 have been negatively impacted by $167 million (after-tax) of HSBC acquisition related costs and other merger related items incurred by Household. Excluding these charges, our ratio of earnings to fixed charges would have been 1.69 and our ratio of earnings to combined fixed charges and preferred stock dividends would have been 1.63. These non-GAAP financial ratios are provided for comparison of our operating trends only.