Xerox 10-Q 2012 Q1 Quarterly report

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges, the ratio of earnings to combined fixed charges and preferred stock dividends, as well as any deficiency of earnings are determined using the following applicable factors:

Earnings available for fixed chargesare calculated first, by determining the sum of: (a) income from continuing operations before income taxes and equity income; (b) distributed equity income; (c) fixed charges, as defined below; and (d) amortization of capitalized interest, if any. From this total, we subtract capitalized interest and net income attributable to noncontrolling interests.

Fixed chargesare calculated as the sum of: (a) interest costs (both expensed and capitalized); (b) amortization of debt expense and discount or premium relating to any indebtedness; and (c) that portion of rental expense that is representative of the interest factor.

Preferred stock dividends used in the ratio of earnings to combined fixed charges and preferred stock dividends consist of the amount of pre-tax earnings required to cover dividends paid on our Series A convertible preferred stock.

	Three Months Ended March 31,
(in millions)	2012			2011
Fixed Charges:
Interest expense	$	109		$	127
Capitalized interest	4			2
Portion of rental expense which represents interest factor	57			57
Total Fixed Charges	$	170		$	186
Earnings Available for Fixed Charges:
Pre-tax income	$	313		$	350
Add: Distributed equity income of affiliated companies	9			1
Add: Fixed charges	170			186
Less: Capitalized interest	(4		)	(2		)
Less: Net income-noncontrolling interests	(7		)	(8		)
Total Earnings Available for Fixed Charges	$	481		$	527
Ratio of Earnings to Fixed Charges	2.83			2.83
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends:
Fixed Charges:
Interest expense	$	109		$	127
Capitalized interest	4			2
Portion of rental expense which represents interest factor	57			57
Total Fixed Charges before preferred stock dividends pre-tax income requirements	170			186
Preferred stock dividends pre-tax income requirements	10			10
Total Combined Fixed Charges and Preferred Stock Dividends	$	180		$	196
Earnings Available for Fixed Charges:
Pre-tax income	$	313		$	350
Add: Distributed equity income of affiliated companies	9			1
Add: Fixed charges before preferred stock dividends	170			186
Less: Capitalized interest	(4		)	(2		)
Less: Net income-noncontrolling interests	(7		)	(8		)
Total Earnings Available for Fixed Charges and Preferred Stock Dividends	$	481		$	527
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends	2.67			2.69