EX-12.01 2 ex1201.htm COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES Computation of Ratios of Earnings to Fixed Charges
EXHIBIT 12.01

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO FIXED CHARGES


Dollars in millions)
  
2005
  
2004
  
2003
  
2002
  
2001
                     
Earnings (loss) before income taxes and cumulative effect of change in accounting principle
$
 
783
$
 
64
$
 
(381)
$
 
84
$
 
(291)
Add:
                    
Interest expense
  
113
  
123
  
130
  
128
  
146
Appropriate portion of rental expense (1)
  
21
  
21
  
21
  
28
  
28
Amortization of capitalized interest
  
11
  
15
  
12
  
13
  
15
Earnings (loss) as adjusted
$
928
$
223
$
(218)
$
253
$
(102)
                     
Fixed charges:
                    
Interest expense
$
113
$
123
$
130
$
128
$
146
Appropriate portion of rental expense (1)
  
21
  
21
  
21
  
28
  
28
Capitalized interest
  
5
  
3
  
3
  
4
  
5
Total fixed charges
$
139
$
147
$
154
$
160
$
179
                     
Ratio of earnings (loss) to fixed charges
  
6.7x
  
1.5x
  
(A)
  
1.6x
  
(B)
                     
                     
(1)  
For all periods presented, the interest component of rental expense is estimated to equal one-third of such expense.
 
(A)  
Due to the net loss reported, the coverage ratio was less than 1x. To achieve a coverage ratio of 1x, additional pre-tax earnings of $372 million would have been required for 2003.
 
(B)  
Due to the net loss reported, the coverage ratio was less than 1x. To achieve a coverage ratio of 1x, additional pre-tax earnings of $281 million would have been required for 2001.
 
131