Exhibit 12
EL PASO CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
For the Nine Months ended September 30, | ||||||||
2008 | 2007 | |||||||
Earnings | ||||||||
Pre-tax income from continuing operations | $ | 1,305 | $ | 427 | ||||
Minority interests in consolidated subsidiaries | 23 | 1 | ||||||
Income from equity investees | (141 | ) | (75 | ) | ||||
Pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries and income from equity investees | 1,187 | 353 | ||||||
Fixed charges | 717 | 801 | ||||||
Distributed income of equity investees | 129 | 156 | ||||||
Capitalized interest | (33 | ) | (37 | ) | ||||
Preferred returns on consolidated subsidiaries | — | (1 | ) | |||||
Total earnings available for fixed charges | $ | 2,000 | $ | 1,272 | ||||
Fixed charges | ||||||||
Interest and debt expense | $ | 708 | $ | 789 | ||||
Interest component of rent | 9 | 11 | ||||||
Preferred returns on consolidated subsidiaries | — | 1 | ||||||
Total fixed charges | $ | 717 | $ | 801 | ||||
Ratio of earnings to fixed charges | 2.79 | 1.59 | ||||||
Fixed charges | ||||||||
Interest and debt expense | $ | 708 | $ | 789 | ||||
Interest component of rent | 9 | 11 | ||||||
Preferred returns on consolidated subsidiaries | — | 1 | ||||||
Preferred stock dividend of parent | 42 | 43 | ||||||
Total fixed charges and preferred stock dividend | $ | 759 | $ | 844 | ||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 2.64 | 1.51 | ||||||
For purposes of computing these ratios, earnings means pre-tax income from continuing operations before:
- | minority interests in consolidated subsidiaries; | ||
- | income or loss from equity investees, adjusted to reflect actual distributions from equity investments; and | ||
- | fixed charges; |
less:
- | capitalized interest; and | ||
- | preferred returns on consolidated subsidiaries. |
Fixed charges means the sum of the following:
- | interest costs, not including interest on tax liabilities which is included in income tax expense our income statement | ||
- | amortization of debt costs | ||
- | that portion of rental expense which we believe represents an interest factor; and | ||
- | preferred stock dividends and preferred returns on consolidated subsidiaries. |