EX-12 3 exhibit12.htm RATIO OF EARNINGS TO FIXED CHARGES exhibit12.htm  
 
Exhibit 12
PANHANDLE EASTERN PIPE LINE COMPANY, LP
                          
                               
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, 2011, 2010, 2009, 2008 and 2007. 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,
   
2011
    
2010
    
2009
    
2008
    
2007
  
   
(In thousands)
                          
FIXED CHARGES:
                              
Interest Expense
   $ 106,458     $ 102,001     $ 82,881     $ 90,514     $ 83,748  
Net amortization of debt discount, premium and
                                  
  issuance expense
     1,469       1,457       1,615       (1,457 )     (1,197 )
Capitalized Interest
     1,146       6,629       25,701       18,910       14,203  
Interest portion of rental expense
     4,254       4,497       4,122       3,050       3,582  
                                         
Total Fixed Charges
   $ 113,327     $ 114,584     $ 114,319     $ 111,017     $ 100,336  
                                         
EARNINGS:
                                        
Consolidated pre-tax income (loss) from continuing
                                  
   operations
   $ 263,494     $ 244,456     $ 242,315     $ 247,206     $ 246,742  
Earnings of equity investments
     (208 )     (237 )     (224 )     (304 )     (299 )
Distributed income from equity investments
     580       -       -       -       -  
Capitalized interest
     (1,146 )     (6,629 )     (25,701 )     (18,910 )     (14,203 )
Minority interest
     -       -       -       -       -  
Total fixed charges (from above)
     113,327       114,584       114,319       111,017       100,336  
                                         
Earnings Available for Fixed Charges
   $ 376,047     $ 352,174     $ 330,709     $ 339,009     $ 332,576  
                                         
                                         
Ratio of Earnings to Fixed Charges
     3.3       3.1       2.9       3.1       3.3