Tucson Electric Power 10-Q 2017 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)	2017		2017		2016		2015		2014		2013		2012
Net Income	$	163,694	$	176,685	$	124,438	$	127,794	$	102,338	$	101,342	$	65,470
Add:
Income Tax Expense	83,951		93,342		59,376		71,719		57,911		47,986		39,109
Interest Expense, Net (1)	47,327		63,388		64,192		63,555		68,555		80,793		91,295
Estimated Interest Portion of Rental Expense (2)	1,275		1,727		1,707		1,711		1,691		842		611
Total Earnings before Taxes and Fixed Charges	$	296,247	$	335,142	$	249,713	$	264,779	$	230,495	$	230,963	$	196,485
Fixed Charges:
Interest Expense (before deducting capitalized interest) (3)	$	50,344	$	66,818	$	65,902	$	69,179	$	88,340	$	85,591	$	93,077
Estimated Interest Portion of Rental Expense (2)	1,275		1,727		1,707		1,711		1,691		842		611
Total Fixed Charges	$	51,619	$	68,545	$	67,609	$	70,890	$	90,031	$	86,433	$	93,688
Ratio of Earnings to Fixed Charges	5.74		4.89		3.69		3.74		2.56		2.67		2.10

⁽¹⁾  Interest on uncertain tax positions is included in Interest Expense, Net.

⁽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.