Exhibit 12
Cendant Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
Year Ended December 31, | ||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||
Earnings available to cover fixed charges: | ||||||||||||||||||||
Income before income taxes, minority interest and equity in Homestore | $ | 2,554 | $ | 2,173 | $ | 1,547 | $ | 638 | $ | 980 | ||||||||||
Plus: Fixed charges | 1,100 | 1,022 | 826 | 963 | 545 | |||||||||||||||
Amortization of capitalized interest | 6 | 4 | - | - | - | |||||||||||||||
Less: Equity income (loss) in unconsolidated affiliates | - | - | 2 | (5 | ) | 17 | ||||||||||||||
Minority interest (pre-tax) in mandatorily redeemable preferred interest in a subsidiary | 6 | 6 | 14 | 23 | 25 | |||||||||||||||
Minority interest (pre-tax) in mandatorily redeemable trust preferred securities | - | - | - | 14 | 106 | |||||||||||||||
Minority interest in pre-tax income of subsidiaries that have not incurred fixed charges(a) | - | 25 | 20 | - | - | |||||||||||||||
Capitalized interest | 5 | 7 | - | - | - | |||||||||||||||
Earnings available to cover fixed charges | $ | 3,649 | $ | 3,161 | $ | 2,337 | $ | 1,569 | $ | 1,377 | ||||||||||
Fixed charges(b): | ||||||||||||||||||||
Interest, including amortization of deferred financing costs | $ | 942 | $ | 880 | $ | 718 | $ | 816 | $ | 381 | ||||||||||
Minority interest (pre-tax) in mandatorily redeemable preferred interest in a subsidiary | 6 | 6 | 14 | 23 | 25 | |||||||||||||||
Minority interest (pre-tax) in mandatorily redeemable trust preferred securities | - | - | - | 14 | 106 | |||||||||||||||
Interest portion of rental payment | 152 | 136 | 94 | 110 | 33 | |||||||||||||||
Total fixed charges | $ | 1,100 | $ | 1,022 | $ | 826 | 963 | $ | 545 | |||||||||||
Ratio of earnings to fixed charges | 3.32 | x | 3.09 | x | 2.83 | x | 1.63 | x | 2.53 | x | ||||||||||
(a) | Includes minority expense related to the Company’s venture with Marriott International, Inc. of $25 million and $20 million during 2003 and 2002, respectively. | |
(b) | Consists of interest expense on all indebtedness (including amortization of deferred financing costs) and the portion of operating lease rental expense that is representative of the interest factor. Interest expense on all indebtedness is detailed as follows: |
Year Ended December 31, | ||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||
Incurred by the Company’s PHH subsidiary | $ | 314 | $ | 264 | $ | 201 | $ | 258 | $ | 156 | ||||||||||
Related to the Company’s stockholder litigation settlement liability | - | - | - | 131 | 63 | |||||||||||||||
Related to the debt under management and mortgage programs incurred by the Company’s car rental subsidiary | 263 | 270 | 213 | 189 | - | |||||||||||||||
All other | 365 | 346 | 304 | 238 | 162 | |||||||||||||||
$ | 942 | $ | 880 | $ | 718 | $ | 816 | $ | 381 | |||||||||||