EX-12 3 ex12_4.txt COMPUTATION OF RATIO EXHIBIT 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (In Thousands, Except Ratios)
Twelve Months Ended March 31, Year Ended December 31 2003 2002 2001(1) 2000(1) 1999 1998 ---------------------------------------------------------------------------------- Earnings: Net income (2) $ 102,410 $ 97,137 $ 44,495 $ 56,901 $ 76,511 $ 70,367 Income taxes 53,478 46,772 21,309 37,077 43,161 39,093 Equity in losses of equity investee 2,250 1,859 463 - - - Fixed Charges (See Below) 68,890 70,693 72,709 48,276 39,240 38,582 Less: Preferred stock dividend 34 32 758 1,017 1,078 1,095 ---------------------------------------------------------------------------------- Total adjusted earnings $ 226,994 $216,428 $138,217 $141,237 $157,834 $ 146,947 ---------------------------------------------------------------------------------- Fixed charges: Total interest expense $ 68,087 $ 69,119 $ 70,745 $ 46,354 $ 36,790 $ 36,670 Interest component of rents 769 1,542 1,206 906 1,372 817 Preferred stock dividend 34 32 758 1,017 1,078 1,095 ---------------------------------------------------------------------------------- Total fixed charges $ 68,890 $ 70,693 $ 72,709 $ 48,276 $ 39,240 $ 38,582 ---------------------------------------------------------------------------------- Ratio of earnings to fixed charges 3.3 3.1 1.9 2.9 4.0 3.8 ==================================================================================
(1) Merger and integration related costs incurred for the years ended December 31, 2001 and 2000 totaled $2.8 million and $32.7 million, respectively. These costs relate primarily to employee and executive severance, transaction costs, and other merger, integration and restructuring activities. As a result of merger integration activities, management has identified certain information systems that were retired in 2001. Accordingly, the useful lives of these assets were shortened to reflect that decision, resulting in additional depreciation expense. For the for the years ended December 31, 2001 and 2000, this additional depreciation expense was $9.6 million and $11.4 million, respectively. In total, merger and integration related costs incurred for the years ended December 31, 2001 and 2000 were $12.4 million ($7.7 million after tax) and $44.1 million ($31.6 million after tax), respectively. In June 2001, Utility Holdings began implementing a restructuring plan to eliminate administrative and supervisory positions in its utility operations and corporate office. Restructuring-related charges incurred during the year ended December 31, 2001 totaled $15.0 million ($9.3 million after tax). (2) Net income, as defined, is before preferred stock dividend requirement of subsidiary and cumulative effect of change in accounting principle.