Tucson Electric Power 10-Q 2016 Q3 Quarterly report

Exhibit 12

TUCSON ELECTRIC POWER COMPANY

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Nine Months Ended		Twelve Months Ended
	September 30,		September 30,		December 31,		December 31,		December 31,		December 31,		December 31,
(in thousands)	2016		2016		2015		2014		2013		2012		2011
Net Income	$	111,447	$	123,447	$	127,794	$	102,338	$	101,342	$	65,470	$	85,334
Add:
Income Tax Expense	49,985		60,917		71,719		57,911		47,986		39,109		52,000
Interest Expense, Net (1)	48,131		63,925		63,555		68,555		80,793		91,295		93,786
Estimated Interest Portion of Rental Expense (2)	1,255		1,387		1,711		1,691		842		611		795
Total Earnings before Taxes and Fixed Charges	$	210,818	$	249,676	$	264,779	$	230,495	$	230,963	$	196,485	$	231,915
Fixed Charges:
Interest Expense (before deducting capitalized interest) (3)	$	49,428	$	65,977	$	69,179	$	88,340	$	85,591	$	93,077	$	95,859
Estimated Interest Portion of Rental Expense	1,255		1,387		1,711		1,691		842		611		795
Total Fixed Charges	$	50,683	$	67,364	$	70,890	$	90,031	$	86,433	$	93,688	$	96,654
Ratio of Earnings to Fixed Charges	4.16		3.71		3.74		2.56		2.67		2.10		2.40

⁽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.