EX-12.1 2 pepl_12312012xex121.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES PEPL_12.31.2012_EX 12.1


Exhibit 12.1
Panhandle Eastern Pipe Line Company, LP
Computation of Ratio of Earnings to Fixed Charges
(in millions, except for ratio amounts)
(Unaudited)

The following table sets forth the consolidated ratio of earnings to fixed charges on an historical basis for the periods from March 26, 2012 to December 31, 2012 and January 1, 2012 to March 25, 2012 and the years ended December 31, 2011, 2010, 2009, and 2008. For the purpose of calculating such ratios, “earnings” consist of pre-tax income from continuing operations before income or loss from equity investees, adjusted to reflect distributed income from equity investments, and fixed charges, less capitalized interest. “Fixed charges” consist of interest costs, amortization of debt discount, premiums and issuance costs and an estimate of interest implicit in rentals. No adjustment has been made to earnings for the amortization of capital interest for the periods presented as such amount is immaterial. Interest on FIN 48 liabilities is excluded from the computation of fixed charges as it is recorded by the Company in income tax expense versus interest expense.
 
Successor
 
 
Predecessor
 
Period from Acquisition
(March 26, 2012) to
December 31,
2012
 
 
Period from
January 1, 2012 to
March 25,
2012
 
Years Ended December 31,
 
 
 
 
2011
 
2010
 
2009
 
2008
Fixed Charges:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
$
67

 
 
$
25

 
$
106

 
$
102

 
$
83

 
$
90

Net amortization of debt discount, premium and issuance expense
(24
)
 
 
—

 
2

 
1

 
1

 
(1
)
Capitalized interest
1

 
 
—

 
1

 
7

 
26

 
19

Interest charges included in rental expense
3

 
 
1

 
4

 
4

 
4

 
3

Total fixed charges
$
47

 
 
$
26

 
$
113

 
$
114

 
$
114

 
$
111

Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated pre-tax income from continuing operations
$
164

 
 
$
65

 
$
263

 
$
245

 
$
243

 
$
247

Distributed income of equity investees
—

 
 
—

 
1

 
—

 
—

 
—

Capitalized interest
(1
)
 
 
—

 
(1
)
 
(7
)
 
(26
)
 
(19
)
Total fixed charges (from above)
47

 
 
26

 
113

 
114

 
114

 
111

Earnings Available for Fixed Charges
$
210

 
 
$
91

 
$
376

 
$
352

 
$
331

 
$
339

 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
4.5

 
 
3.5

 
3.3

 
3.1

 
2.9

 
3.1