Exhibit 12
INTERNATIONAL PAPER COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollar amounts in millions)
(Unaudited)
| For the Years Ended December 31, | Nine Months
Ended September 30, |
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| 2005 | 2006 | 2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||
| TITLE |
||||||||||||||||||||||||||||
| A) Earnings (loss) from continuing operations before income taxes and equity earnings |
$ | 286.0 | $ | 3,188.0 | $ | 1,654.0 | $ | (1,153.0 | )(1) | $ | 1,199.0 | (1) | $ | 1,627.0 | $ | 490.0 | ||||||||||||
| B) Noncontrolling interests, net of taxes |
(9.0 | ) | (17.0 | ) | (24.0 | ) | (3.0 | ) | (18.0 | ) | (14.0 | ) | (18.0 | ) | ||||||||||||||
| C) Fixed charges excluding capitalized interest |
752.0 | 724.5 | 552.8 | 648.2 | 780.6 | 587.1 | 540.2 | |||||||||||||||||||||
| D) Amortization of previously capitalized interest |
39.2 | 34.8 | 27.2 | 30.0 | 31.3 | 19.9 | 22.9 | |||||||||||||||||||||
| E) Equity in undistributed earnings of affiliates |
9.7 | (5.8 | ) | (10.7 | ) | 0 | (1) | 0 | (1) | 0 | 0 | |||||||||||||||||
| F) Distributed income of equity investees |
0 | 0 | 0 | 73.0 | 51.0 | 0 | 33 | |||||||||||||||||||||
| G) Earnings (loss) from continuing operations before income taxes and fixed charges |
$ | 1,077.9 | $ | 3,924.5 | $ | 2,199.3 | $ | (404.8 | ) | $ | 2,043.9 | $ | 2,220.0 | $ | 1,068.1 | |||||||||||||
| Fixed Charges |
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| H) Interest and amortization of debt expense |
$ | 680.8 | $ | 651.4 | $ | 487.0 | $ | 572.5 | $ | 702.3 | $ | 530.4 | $ | 483.6 | ||||||||||||||
| I) Interest factor attributable to rentals |
61.2 | 60.2 | 55.4 | 65.8 | 72.0 | 51.8 | 52.5 | |||||||||||||||||||||
| J) Preferred dividends of subsidiaries |
10.0 | 12.9 | 10.4 | 9.9 | 6.3 | 4.9 | 4.1 | |||||||||||||||||||||
| K) Capitalized interest |
13.7 | 20.7 | 29.9 | 27.5 | 12.1 | 9.0 | 9.5 | |||||||||||||||||||||
| L) Total fixed charges |
$ | 765.7 | $ | 745.2 | $ | 582.7 | $ | 675.7 | $ | 792.7 | $ | 596.1 | $ | 549.7 | ||||||||||||||
| M) Ratio of earnings to fixed charges |
1.41 | 5.27 | 3.77 | 2.58 | 3.72 | 1.94 | ||||||||||||||||||||||
| N) Deficiency in earnings necessary to cover fixed charges |
$ | (1,080.50 | ) | |||||||||||||||||||||||||
| (1) | Beginning in 2008, earnings from continuing operations are reported before equity earnings. Therefore, equity earnings are no longer adjusted out of the total in Line E. |
NOTE: Dividends on International Paper’s preferred stock are insignificant. As a result, for all periods presented, the ratios of earnings to fixed charges and preferred stock dividends are the same as the ratios of earnings to fixed charges.