EX-12.2 5 a07-26898_1ex12d2.htm EX-12.2

Exhibit 12.2

 

RATIO OF EARNINGS TO FIXED CHARGES

 

The following table sets forth the ratio of earnings to fixed charges for Southern Union on a historical basis for the six months ended June 30, 2007, the years ended December 31, 2006 and 2005, the six months ended December 31, 2004, and the years ended June 30, 2004, 2003 and 2002. 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 Southern Union in income tax expense versus interest expense.

 

 

 

6 Months Ended

 

Year Ended

 

Year Ended

 

6 Months Ended

 

Year Ended

 

Year Ended

 

Year Ended

 

 

 

June 30, 2007

 

December 31, 2006

 

December 31, 2005

 

December 31, 2004

 

June 30, 2004

 

June 30, 2003

 

June 30, 2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FIXED CHARGES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

$

102,770

 

$

202,513

 

$

132,971

 

$

65,344

 

$

137,967

 

$

91,731

 

$

98,269

 

Net amortization of debt discount, premium and issuance expense

 

561

 

12,130

 

2,186

 

(446

)

(10,100

)

1,612

 

2,936

 

Capitalized Interest

 

4,632

 

5,492

 

8,950

 

2,614

 

3,865

 

26

 

177

 

Interest portion of rental expense

 

3,254

 

6,234

 

6,700

 

3,152

 

5,940

 

2,012

 

3,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Fixed Charges

 

$

111,217

 

$

226,369

 

$

150,807

 

$

70,664

 

$

137,672

 

$

95,381

 

$

104,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated pre-tax income (loss) from continuing operations

 

$

174,590

 

$

326,330

 

$

203,148

 

$

16,954

 

$

106,468

 

$

(14,371

)

$

(78,626

)

Earnings of equity investments

 

(57,166

)

(141,370

)

(70,742

)

(4,745

)

(200

)

(422

)

(1,420

)

Distributed income from equity investments

 

69,654

 

62,637

 

15,203

 

 

174

 

 

 

Capitalized interest

 

(4,632

)

(5,492

)

(8,950

)

(2,614

)

(3,865

)

(26

)

(177

)

Total fixed charges (from above)

 

111,217

 

226,369

 

150,807

 

70,664

 

137,672

 

95,381

 

104,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Available for Fixed Charges

 

$

293,663

 

$

468,474

 

$

289,466

 

$

80,259

 

$

240,249

 

$

80,562

 

$

24,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of Earnings to Fixed Charges

 

2.6

 

2.1

 

1.9

 

1.1

 

1.7

 

(a

)

(a

)

 


(a) The earnings were inadequate to cover fixed charges by approximately $14.8 million and $80.2 million for the years ended June 30, 2003 and 2002, respectively.  In accordance with accounting principles generally accepted in the United States of America, we did not allocate interest expense or other corporate costs to discontinued operations for any periods presented (except where the underlying debt was assumed by the buyers of these operations), resulting in the recognition of losses from continuing operations for the years ended June 30, 2003 and 2002.  All outstanding debt of Southern Union Company and its subsidiaries, other than Panhandle Eastern Pipe Line Company, LP, is maintained at Southern Union Company.