Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is calculated using the Securities and Exchange Commission guidelines(a).
Year Ended December 31, | ||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||
(dollars in millions) | ||||||||||||||||
Earnings as defined for fixed charges calculation | ||||||||||||||||
Add: | ||||||||||||||||
Pretax (loss) income from continuing operations(b)(e) | $ | 2,192 | $ | 3,869 | $ | 1,792 | $ | (307 | ) | $ | 1,526 | |||||
Fixed charges | 1,382 | 1,159 | 1,433 | 1,620 | 1,550 | |||||||||||
Distributed income of equity investees | 893 | 473 | 140 | 263 | 369 | |||||||||||
Deduct: | ||||||||||||||||
Preference security dividend requirements of consolidated subsidiaries | 27 | 27 | 31 | 139 | 170 | |||||||||||
Interest capitalized(c) | 56 | 23 | 18 | 58 | 193 | |||||||||||
Total earnings (as defined for the Fixed Charges calculation) | $ | 4,384 | $ | 5,451 | $ | 3,316 | $ | 1,379 | $ | 3,082 | ||||||
Fixed charges: | ||||||||||||||||
Interest on debt, including capitalized portions | $ | 1,311 | $ | 1,096 | $ | 1,365 | $ | 1,441 | $ | 1,340 | ||||||
Estimate of interest within rental expense | 44 | 36 | 37 | 40 | 40 | |||||||||||
Preference security dividend requirements of consolidated subsidiaries | 27 | 27 | 31 | 139 | 170 | |||||||||||
Total fixed charges | $ | 1,382 | $ | 1,159 | $ | 1,433 | $ | 1,620 | $ | 1,550 | ||||||
Ratio of earnings to fixed charges(e) | 3.2 | 4.7 | 2.3 | (d | ) | 2.0 |
(a) | Certain prior year Income Statement amounts above have been adjusted for businesses reclassified to discontinued operations during 2006. |
(b) | Excludes minority interest expenses and income or loss from equity investees. |
(c) | Excludes equity costs related to Allowance for Funds Used During Construction that are included in Other Income and Expenses in the Consolidated Statements of Operations. |
(d) | Earnings were inadequate to cover fixed charges by $241 million for the year ended December 31, 2003. |
(e) | Includes pre-tax gains on the sale of TEPPCO GP and LP of approximately $0.9 billion, net of minority interest, in 2005. |