EX-12 7 ex-12.txt COMPUTATION OF RATIOS Exhibit 12 American Home Products Corporation Computation of Ratio of Earnings to Fixed Charges (3) (In Thousands, except ratio amounts)
Years Ended December 31, Six Month Ended ------------------------------------------------------------------- June 30, 2001 2000 1999 1998 1997 1996 ---------------- ----------- ----------- ---------- ---------- ---------- Earnings Income (loss) from continuing operations before federal and foreign taxes (2) $1,612,878 ($1,101,040) ($1,907,299) $3,089,936 $2,364,753 $2,398,866 Add: Fixed charges 210,792 324,887 403,694 371,986 513,860 601,927 Minority interests 12,211 26,784 30,301 620 2,421 13,677 Distributed equity income 0 0 0 771 0 0 Amortization of capitalized interest 1,240 1,917 1,803 1,487 1,057 5,621 Less: Equity income 36,680 55,991 2,122 473 9,777 8,448 Capitalized interest 44,737 43,303 15,375 9,497 12,898 0 ---------- ----------- ----------- ---------- ---------- ---------- Total earnings (loss) as defined $1,755,704 ($846,746) ($1,488,998) $3,454,830 $2,859,416 $3,011,643 ========== =========== =========== ========== ========== ========== Fixed Charges: Interest and amortization of debt expense $144,107 $238,840 $343,271 $322,970 $461,370 $571,414 Capitalized interest 44,737 43,303 15,375 9,497 12,898 0 Interest factor of rental expense (1) 21,948 42,744 45,048 39,519 39,592 30,513 ---------- ----------- ----------- ---------- ---------- ---------- Total fixed charges as defined $210,792 $324,887 $403,694 $371,986 $513,860 $601,927 ========== =========== =========== ========== ========== ========== Ratio of earnings to fixed charges (2) 8.3 - - 9.3 5.6 5.0 (1) A 1/3 factor was used to compute the portion of rental expenses deemed representative of the interest factor. (2) The results of operations for the year ended December 31, 1999 are inadequate to cover total fixed charges as defined. The coverage deficiency for the year ended December 31, 1999 is $403,694. Excluding the charge for the REDUX and PONDIMIN diet drug litigation of $4,750,000, the pro forma ratio of earnings to fixed charges would be 8.1 for the year ended December 31, 1999. The results of operations for the year ended December 31, 2000 are inadequate to cover total fixed charges as defined. The coverage deficiency for the year ended December 31, 2000 is $324,887. Excluding the charge for the REDUX and PONDIMIN diet drug litigation of $7,500,000, the gain on sale of Immunex common stock of $2,061,204 and the Warner-Lambert Company termination fee of $1,709,380, the pro forma ratio of earnings to fixed charges would be 8.9 for the year ended December 31, 2000. (3) Amounts have been restated to reflect the Cyanamid Agricultural Products business as a discontinued operation.