Exhibit 12
INTERNATIONAL PAPER COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollar amounts in millions)
(Unaudited)
For the Years Ended December 31, | Three Months Ended March 31, | |||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | 2008 | ||||||||||||||||||||||||
TITLE | ||||||||||||||||||||||||||||||
A) | Earnings from continuing operations before income taxes, equity earnings and minority interest | $ | 89.0 | $ | 376.0 | $ | 286.0 | $ | 3,188.0 | $ | 1,654.0 | $ | 606.0 | $ | 198.0 | (1) | ||||||||||||||
B) | Minority interest expense, net of taxes | (79.0 | ) | (24.0 | ) | (9.0 | ) | (17.0 | ) | (24.0 | ) | (5.7 | ) | (5.2 | ) | |||||||||||||||
C) | Fixed charges excluding capitalized interest | 943.8 | 859.7 | 752.0 | 724.5 | 552.8 | 127.9 | 125.1 | ||||||||||||||||||||||
D) | Amortization of previously capitalized interest | 40.8 | 40.3 | 39.2 | 34.8 | 27.2 | 7.5 | 7.0 | ||||||||||||||||||||||
E) | Equity in undistributed earnings of affiliates | 3.1 | (13.4 | ) | 9.7 | (5.8 | ) | (10.7 | ) | 6.6 | — | (1) | ||||||||||||||||||
F) | Earnings from continuing operations before income taxes and fixed charges | $ | 997.7 | $ | 1,238.6 | $ | 1,077.9 | $ | 3,924.5 | $ | 2,199.3 | $ | 742.3 | $ | 324.9 | |||||||||||||||
Fixed Charges | ||||||||||||||||||||||||||||||
G) | Interest and amortization of debt expense | $ | 801.8 | $ | 780.3 | $ | 680.8 | $ | 651.4 | $ | 487.0 | $ | 114.0 | $ | 108.2 | |||||||||||||||
H) | Interest factor attributable to rentals | 74.9 | 63.9 | 61.2 | 60.2 | 55.4 | 14.1 | 14.3 | ||||||||||||||||||||||
I) | Preferred dividends of subsidiaries | 67.1 | 15.5 | 10.0 | 12.9 | 10.4 | (0.2 | ) | 2.6 | |||||||||||||||||||||
J) | Capitalized interest | 8.0 | 9.7 | 13.7 | 20.7 | 29.9 | 11.2 | 4.2 | ||||||||||||||||||||||
K) | Total fixed charges | $ | 951.8 | $ | 869.4 | $ | 765.7 | $ | 745.2 | $ | 582.7 | $ | 139.1 | $ | 129.3 | |||||||||||||||
L) | Ratio of earnings to fixed charges | 1.05 | 1.42 | 1.41 | 5.27 | 3.77 | 5.34 | 2.51 | ||||||||||||||||||||||
(1) | Beginning in 2008, earnings from continuing operations are reported before equity earnings. Therefore, equity earnings will no longer be adjusted out of the total in Line E. |
Note: Dividends on International Paper’s preferred stock are insignificant. As a result, for all periods presented, the ratios of earnings to fixed charges and preferred stock dividends are the same as the ratios of earnings to fixed charges.