Tucson Electric Power 10-Q 2014 Q3 Quarterly report

Exhibit 12

Tucson Electric Power Company

Computation of Ratio of Earnings to Fixed Charges

	9 Months Ended		12 Months Ended
	September 30,		September 30,		December 31,		December 31,		December 31,		December 31,		December 31,
	2014		2014		2013		2012		2011		2010		2009
	Thousands of Dollars
Net Income	$	87,541	$	92,451	$	101,342	$	65,470	$	85,334	$	108,260	$	90,688
Add:
Income Tax Expense	51,656		57,905		47,986		39,109		52,000		59,936		54,220
Interest Expense, net(1)	52,657		72,576		80,793		91,295		93,786		93,465		89,715
Estimated Interest Portion of Rental Expense (2)	601		811		842		611		795		72		106
Total Earnings before Taxes and Fixed Charges	$	192,455	$	223,743	$	230,963	$	196,485	$	231,915	$	261,733	$	234,729
Fixed Charges:
Interest Expense (before deducting capitalized interest)(3)	$	66,790	$	89,413	$	85,591	$	93,077	$	95,859	$	95,345	$	91,467
Estimated Interest Portion of Rental Expense	601		811		842		611		795		72		106
Total Fixed Charges	$	67,391	$	90,224	$	86,433	$	93,688	$	96,654	$	95,417	$	91,573
Ratio of Earnings to Fixed Charges	2.856		2.480		2.672		2.097		2.399		2.743		2.563

⁽¹⁾  The ratios of earnings to fixed charges for the fiscal years ended 2012, 2011, 2010, and 2009 have been revised to exclude capitalized interest from the calculation of Earnings before Taxes and Fixed Charges. Capitalized interest was not material to the calculation of Earnings before Taxes and Fixed Charges or the Ratio of Earnings to Fixed Charges in prior periods. Interest on uncertain tax positions is included in Interest Expense.

⁽²⁾  The Estimated Interest Portion of Rental Expense is calculated by using our estimated incremental borrowing rate times the present value of projected operating lease payments.

⁽³⁾ Excludes recognition of Allowance for Borrowed Funds Used During Construction.