Exhibit 12.1
HEXION SPECIALTY CHEMICALS, INC.
Statement regarding Computation of Ratios
(Amounts in millions of dollars)
Pro forma Nine months ended September 30, | Nine months ended September 30, | Year ended December 31, | ||||||||||||||||||||||||||||||
2005 | 2005(1) | 2004(2) | 2004(2) | 2003 | 2002 | 2001 | 2000(3) | |||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations | $ | 11 | $ | (17 | ) | $ | (105 | ) | $ | (113 | ) | $ | (100 | ) | $ | (24 | ) | $ | (6 | ) | $ | (24 | ) | |||||||||
Add back | ||||||||||||||||||||||||||||||||
Minority interest expense (income) | (4 | ) | (3 | ) | 7 | 8 | 13 | 3 | 1 | 1 | ||||||||||||||||||||||
Loss (gain) from equity investees | (1 | ) | (1 | ) | — | (1 | ) | (2 | ) | (1 | ) | — | 1 | |||||||||||||||||||
Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees | 6 | (21 | ) | (98 | ) | (106 | ) | (89 | ) | (22 | ) | (5 | ) | (22 | ) | |||||||||||||||||
Fixed charges: | ||||||||||||||||||||||||||||||||
Interest expense | 166 | 169 | 73 | 118 | 77 | 65 | 70 | 9 | ||||||||||||||||||||||||
Interest element of lease costs (4) | 4 | 4 | 3 | 5 | 3 | 3 | 2 | — | ||||||||||||||||||||||||
Preferred stock dividend requirements of consolidated subsidiaries | 43 | 18 | — | — | — | — | — | — | ||||||||||||||||||||||||
Total fixed charges | 213 | 191 | 76 | 123 | 80 | 68 | 72 | 9 | ||||||||||||||||||||||||
Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees plus fixed charges, less preferred stock dividend requirements of consolidated subsidiaries | 176 | 152 | (22 | ) | 17 | (9 | ) | 46 | 67 | (13 | ) | |||||||||||||||||||||
Ratio of earnings to fixed charges (5) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||
(1) | Includes data for Bakelite from date of acquisition by Borden Chemical on April 29, 2005. |
(2) | Includes data for Resolution Specialty from August 2, 2004 and for Borden Chemical from August 12, 2004, their respective dates of acquisition by Apollo. |
(3) | Data from date of acquisition by Apollo on November 14, 2000 through December 31, 2000. |
(4) | The interest element of lease costs has been calculated as 1/3 of the rental expense relating to operating leases as management believes this represents the interest portion hereof. |
(5) | Our earnings were insufficient to cover fixed charges and preferred stock dividend requirements by $39, $98, $106, $89, $22, $5 and $22 for the nine months ended September 30, 2005 and 2004 and for the years ended December 31, 2004, 2003, 2002, 2001 and for the two months ended December 31, 2000. On a pro forma basis, our earnings were insufficient to cover fixed charges and preferred stock dividend requirements by $37 for the nine months ended September 30, 2005. |