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, | |||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||||||||||
TITLE | ||||||||||||||||||||||||||||||
A) | Earnings (loss) from continuing operations before income taxes | $ | 376.0 | $ | 286.0 | $ | 3,188.0 | $ | 1,654.0 | $ | (1,153.0 | )(1) | $ | 500.1 | $ | 1,038.0 | ||||||||||||||
B) | Noncontrolling interests, net of taxes | (24.0 | ) | (9.0 | ) | (17.0 | ) | (24.0 | ) | (3.0 | ) | (11.8 | ) | (8.0 | ) | |||||||||||||||
C) | Fixed charges excluding capitalized interest | 859.7 | 752.0 | 724.5 | 552.8 | 648.2 | 240.6 | 391.9 | ||||||||||||||||||||||
D) | Amortization of previously capitalized interest | 40.3 | 39.2 | 34.8 | 27.2 | 30.0 | 14.8 | 12.9 | ||||||||||||||||||||||
E) | Equity in undistributed earnings of affiliates | (13.4 | ) | 9.7 | (5.8 | ) | (10.7 | ) | — | (1) | — | — | ||||||||||||||||||
F) | Distributed income of equity investees | — | — | — | — | 73.0 | — | — | ||||||||||||||||||||||
G) | Earnings (loss) from continuing operations before income taxes and fixed charges | $ | 1,238.6 | $ | 1,077.9 | $ | 3,924.5 | $ | 2,199.3 | $ | (404.8 | ) | $ | 743.7 | $ | 1,434.8 | ||||||||||||||
Fixed Charges | ||||||||||||||||||||||||||||||
H) | Interest and amortization of debt expense | $ | 780.3 | $ | 680.8 | $ | 651.4 | $ | 487.0 | $ | 572.5 | $ | 206.6 | $ | 353.4 | |||||||||||||||
I) | Interest factor attributable to rentals | 63.9 | 61.2 | 60.2 | 55.4 | 65.8 | 29.1 | 35.0 | ||||||||||||||||||||||
J) | Preferred dividends of subsidiaries | 15.5 | 10.0 | 12.9 | 10.4 | 9.9 | 4.9 | 3.5 | ||||||||||||||||||||||
K) | Capitalized interest | 9.7 | 13.7 | 20.7 | 29.9 | 27.5 | 9.8 | 7.0 | ||||||||||||||||||||||
L) | Total fixed charges | $ | 869.4 | $ | 765.7 | $ | 745.2 | $ | 582.7 | $ | 675.7 | $ | 250.4 | $ | 398.9 | |||||||||||||||
M) | Ratio of earnings to fixed charges | 1.42 | 1.41 | 5.27 | 3.77 | 2.97 | 3.60 | |||||||||||||||||||||||
N) | Deficiency in earnings necessary to cover fixed charges | $ | (1,080.50 | ) | ||||||||||||||||||||||||||
(1) | Beginning in 2008, earnings from continuing operations are reported before equity earnings. Therefore, equity earnings are no longer 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.