EX-12 4 jul0902_ex12.txt EXHIBIT 12 COMPANHIA VALE DO RIO DOCE COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES MARCH 2002 CVRD ---- Earnings to fixed charges 1996 1997 1998 1999 2000 MAR/2001 2001 MAR/2002 ---- ---- ---- ---- ---- -------- ---- -------- Fixed charges Interest costs - capitalized 11 30 23 12 12 2 11 5 Interest costs - expensed 230 238 243 233 315 84 335 62 Amortization of debt expense (1) 0 0 0 0 0 0 0 0 Amortization of discount or premium (1) 0 0 0 0 0 0 0 0 One third of rental expense on operating leases (2) 0 0 0 0 0 0 0 0 Guaranteed preferrred stock dividend (3) 40 36 40 33 31 28 37 37 Guarantee of debt of equity investee to be or being paid by CVRD (4) 0 0 0 0 0 0 0 0 -------------------------------------------------------------------------------- 281 304.1604 305.7709 278.4249 357.5805 113.7412 382.8812 103.88118 ================================================================================ Earnings Pre-tax income before minorities and income (loss) from equity investees (8) 441 629 892 670 731 333 1,120 261 Fixed Charges 281 304 306 278 358 114 383 104 Amortization of capitalized interest 18 18 18 18 18 18 17 18 Distributed income of equity investees 101 114 116 64 133 86 132 25 Share of pre-tax losses in equity investees related to guarantees (9) 0 0 0 0 0 0 0 0 -------------------------------------------------------------------------------- Subtotal 841 1,065 1,332 1,030 1,240 551 1,652 408 Less interest capitalized -11 -30 -23 -12 -12 -2 -11 -5 Less preference security dividend requirements of subsidiaries (6) 0 0 0 0 0 0 0 0 Less minority interest in pre-tax income of subsidiaries without fixed ch. (7) 0 0 0 0 0 0 0 0 -------------------------------------------------------------------------------- 830 1,035 1,309 1,018 1,228 549 1,641 403 ================================================================================ Ratio of earnings to fixed charges 2.95 3.40 4.28 3.66 3.43 4.82 4.28 3.88
Fixed charges represent the total of capitalized interest, financial expenses and the preferred stock guaranteed dividend equal to 6% of preferred capital. Preferred capital was calculated by applying a pro-rata to total capital based on the number of preferred and ordinary shares. Earnings represents the total of (i) Income before income taxes, equity results and minority interests, (ii) fixed charges, (iii) amortization of capitalized interest (calculated assuming capitalized interest represents the average of the period 1996 to 2000), (iv) distributed income of equity investees less capitalized interest (1) These items are included in interest costs - expensed (2) The company has no significant operating leases (3) Represent 6% of capital guarantee for CVRD preferred shareholders (see spreadsheet 6% PREF. DIVIDEND) (4) CVRD has not been required to honor and guarantee of equity investee debt (5) calculated as average capitalized interest (((11+30+23+12+12)/5)+(11)/6)+(5/4t)) (6) Preferred shares are common stock equivalents and are not recorded as expense and are thus no considered in this calculation (7) All subsidiaries have fixed charges (8) Before extraordinary items (9) See note 4 - no guarantees need to be honored