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, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | 2008 | ||||||||||||||||||||||
TITLE | ||||||||||||||||||||||||||||
A) Earnings from continuing operations before income taxes and minority interest | $ | 89.0 | $ | 376.0 | $ | 286.0 | $ | 3,188.0 | $ | 1,654.0 | $ | 900.0 | $ | 500.1 | (1) | |||||||||||||
B) Minority interest expense, net of taxes | (79.0 | ) | (24.0 | ) | (9.0 | ) | (17.0 | ) | (24.0 | ) | (10.8 | ) | (11.8 | ) | ||||||||||||||
C) Fixed charges excluding capitalized interest | 943.8 | 859.7 | 752 | 724.5 | 552.8 | 268.4 | 240.6 | |||||||||||||||||||||
D) Amortization of previously capitalized interest | 40.8 | 40.3 | 39.2 | 34.8 | 27.2 | 13.9 | 14.8 | |||||||||||||||||||||
E) Equity in undistributed earnings of affiliates | 3.1 | (13.4 | ) | 9.7 | (5.8 | ) | (10.7 | ) | 4.3 | — | (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 | $ | 1,175.8 | $ | 743.7 | ||||||||||||||
Fixed Charges | ||||||||||||||||||||||||||||
G) Interest and amortization of debt expense | $ | 801.8 | $ | 780.3 | $ | 680.8 | $ | 651.4 | $ | 487.0 | $ | 239.0 | $ | 206.6 | ||||||||||||||
H) Interest factor attributable to rentals | 74.9 | 63.9 | 61.2 | 60.2 | 55.4 | 27.4 | 29.1 | |||||||||||||||||||||
I) Preferred dividends of subsidiaries | 67.1 | 15.5 | 10.0 | 12.9 | 10.4 | 2.0 | 4.9 | |||||||||||||||||||||
J) Capitalized interest | 8.0 | 9.7 | 13.7 | 20.7 | 29.9 | 18.1 | 9.8 | |||||||||||||||||||||
K) Total fixed charges | $ | 951.8 | $ | 869.4 | $ | 765.7 | $ | 745.2 | $ | 582.7 | $ | 286.5 | $ | 250.4 | ||||||||||||||
L) Ratio of earnings to fixed charges | 1.05 | 1.42 | 1.41 | 5.27 | 3.77 | 4.10 | 2.97 | |||||||||||||||||||||
(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.