EX-12 2 ex12.htm EXHIBIT - 12 ex12.htm
Exhibit 12
 
 
 
RATIO OF EARNINGS TO FIXED CHARGES
  
                                     
The following table sets forth the consolidated ratio of earnings to fixed charges on an historical basis for the years ended December 31, 2007, 2006, 2005 and 2004 and for the periods June 12 through December 31, 2003 and January 1 through June 11, 2003. Post-acquisition financial statements reflect a new basis of accounting and pre-acquisition period and post-acquisition period financial results (separated by a heavy black line) are presented but are not comparable. The heavy black line separating January 1 through June 11, 2003 from June 12 through December 31, 2003 relates to the acquisition of Panhandle by Southern Union from CMS Energy, effective June 11, 2003.
  
                                     
                                     
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.
  
                                     
                                     
                                     
                                     
                                     
   
Year Ended December 31,
    
June 12 -
    
January 1 -
  
   
2007
    
2006
    
2005
    
2004
      December 31, 2003    
June 11, 2003
  
                                     
FIXED CHARGES:
                                    
Interest Expense
   $ 83,748     $ 63,322     $ 49,578     $ 52,435     $ 29,098     $ 37,802  
Net amortization of debt discount, premium and
                                                
issuance expense
     (1,197 )     (1,333 )     (1,293 )     (4,006 )     (3,561 )     (2,386 )
Capitalized Interest
     14,203       4,645       8,838       4,812       1,624       987  
Interest portion of rental expense
     3,582       3,780       4,284       4,453       745       595  
                                                 
Total Fixed Charges
   $ 100,336     $ 70,414     $ 61,407     $ 57,694     $ 27,906     $ 36,998  
                                                 
EARNINGS:
                                                
Consolidated pre-tax income (loss) from continuing
                                                
operations
   $ 246,742     $ 225,794     $ 166,189     $ 143,989     $ 84,773     $ 78,543  
Earnings of equity investments
     (299 )     (172 )     (226 )     (216 )     (136 )     (411 )
Distributed income from equity investments
     -       174       203       174       -       1,066  
Capitalized interest
     (14,203 )     (4,645 )     (8,838 )     (4,812 )     (1,624 )     (987 )
SFAS 145 Adjustment
     -       -       -       -       -       -  
Minority interest
     -       -       -       -       -       -  
Total fixed charges (from above)
     100,336       70,414       61,407       57,694       27,906       36,998  
                                                 
Earnings Available for Fixed Charges
   $ 332,576     $ 291,565     $ 218,735     $ 196,829     $ 110,919     $ 115,209  
                                                 
                                                 
Ratio of Earnings to Fixed Charges
     3.3       4.1       3.6       3.4       4.0       3.1