Tucson Electric Power 10-Q 2015 Q2 Quarterly report

Exhibit 12

Tucson Electric Power Company

Computation of Ratio of Earnings to Fixed Charges

	Six Months Ended		Twelve Months Ended
	June 30,		June 30,		December 31,		December 31,		December 31,		December 31,		December 31,
(in thousands)	2015		2015		2014		2013		2012		2011		2010
Net Income	$	47,255	$	101,696	$	102,338	$	101,342	$	65,470	$	85,334	$	108,260
Add:
Income Tax Expense	24,766		54,597		57,911		47,986		39,109		52,000		59,936
Interest Expense, net(1)	31,796		63,798		68,555		80,793		91,295		93,786		93,465
Estimated Interest Portion of Rental Expense(2)	1,052		2,342		1,691		842		611		795		72
Total Earnings before Taxes and Fixed Charges	$	104,869	$	222,433	$	230,495	$	230,963	$	196,485	$	231,915	$	261,733
Fixed Charges:
Interest Expense (before deducting capitalized interest)(3)	$	35,884	$	79,163	$	88,340	$	85,591	$	93,077	$	95,859	$	95,345
Estimated Interest Portion of Rental Expense	1,052		2,342		1,691		842		611		795		72
Total Fixed Charges	$	36,936	$	81,505	$	90,031	$	86,433	$	93,688	$	96,654	$	95,417
Ratio of Earnings to Fixed Charges	2.839		2.729		2.560		2.672		2.097		2.399		2.743

⁽¹⁾  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.