Exhibit 12.2
DDR Corp.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(Amounts in Thousands)
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| | | | | | | | | | | | | | | | | | Three Months Ended | |
| | | Year Ended December 31, | | | March 31, | |
| | | 2008(a) | | | 2009 | | | 2010 | | | 2011 | | | 2012 | | | 2012 | | | 2013 | |
Pretax (loss) income from continuing operations | | $ | (51,052 | ) | | $ | (217,009 | ) | | $ | (112,993 | ) | | $ | 218 | | | $ | (7,753 | ) | | $ | 1,026 | | | $ | 6,551 | |
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Fixed charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense including amortization of deferred costs and capitalized interest | | $ | 300,679 | | | $ | 266,843 | | | $ | 248,586 | | | $ | 249,907 | | | $ | 236,716 | | | $ | 60,000 | | | $ | 57,727 | |
Appropriate portion of rentals representative of the interest factor | | $ | 1,175 | | | $ | 1,589 | | | $ | 1,610 | | | $ | 1,407 | | | $ | 1,405 | | | $ | 341 | | | $ | 361 | |
Write-off of preferred share original issuance costs | | $ | — | | | $ | — | | | $ | — | | | $ | 6,402 | | | $ | 5,804 | | | $ | — | | | $ | — | |
Preferred Dividends | | $ | 42,269 | | | $ | 42,269 | | | $ | 42,269 | | | $ | 31,587 | | | $ | 28,645 | | | $ | 6,967 | | | $ | 7,030 | |
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Total fixed charges | | $ | 344,123 | | | $ | 310,701 | | | $ | 292,465 | | | $ | 289,303 | | | $ | 272,570 | | | $ | 67,308 | | | $ | 65,118 | |
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Capitalized interest during the period | | $ | (41,062 | ) | | $ | (21,814 | ) | | $ | (12,232 | ) | | $ | (12,693 | ) | | $ | (13,327 | ) | | $ | (3,114 | ) | | $ | (2,668 | ) |
Write-off of preferred share original issuance costs | | $ | — | | | $ | — | | | $ | — | | | $ | (6,402 | ) | | $ | (5,804 | ) | | $ | — | | | $ | — | |
Preferred Dividends | | $ | (42,269 | ) | | $ | (42,269 | ) | | $ | (42,269 | ) | | $ | (31,587 | ) | | $ | (28,645 | ) | | $ | (6,967 | ) | | $ | (7,030 | ) |
Amortization of capitalized interest during the period | | $ | 6,720 | | | $ | 7,447 | | | $ | 7,855 | | | $ | 8,278 | | | $ | 8,722 | | | $ | 2,095 | | | $ | 2,203 | |
Equity Company Adjustments | | $ | (17,719 | ) | | $ | 9,733 | | | $ | (5,600 | ) | | $ | (13,734 | ) | | $ | (35,250 | ) | | $ | (8,248 | ) | | $ | (2,954 | ) |
Equity Company Adjustments Distributed Income | | $ | 17,719 | | | $ | 10,889 | | | $ | 7,334 | | | $ | 9,424 | | | $ | 13,165 | | | $ | 1,658 | | | $ | 894 | |
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Earnings before income taxes and fixed charges | | $ | 216,460 | | | $ | 57,678 | | | $ | 134,560 | | | $ | 242,807 | | | $ | 203,678 | | | $ | 53,758 | | | $ | 62,114 | |
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Ratio of earnings to combined fixed charges and preferred dividends | | | (b) | | | | (c) | | | | (d) | | | | (e) | | | | (f) | | | | (g) | | | | 1.0 | |
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| (a) | This period has been adjusted to reflect the retrospective application of ASC 470-02, previously referred to as FSP APB 14-1, for interest expense related to our convertible debt. |
| (b) | Due to the pretax loss from continuing operations for the year ended December 31, 2008, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $127.7 million to achieve a coverage of 1:1. |
The pretax loss from continuing operations for the year ended December 31, 2008, includes consolidated impairment charges of $16.0 million and impairment charges of joint venture investments of $107.0 million, which together aggregate $123.0 million.
| (c) | Due to the pretax loss from continuing operations for the year ended December 31, 2009, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $253.0 million to achieve a coverage of 1:1. |
The pretax loss from continuing operations for the year ended December 31, 2009, includes consolidated impairment charges of $12.2 million, impairment charges of joint venture investments of $184.6 million and losses on equity derivative instruments of $199.8 million, which together aggregate $396.6 million.
| (d) | Due to the pretax loss from continuing operations for the year ended December 31, 2010, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $157.9 million to achieve a coverage of 1:1. |
The pretax loss from continuing operations for the year ended December 31, 2010, includes consolidated impairment charges of $84.9 million and losses on equity derivative instruments of $40.2 million, which together aggregate $125.1 million, that are discussed in our Annual Report on Form 10-K for the year ended December 31, 2012, as amended.
| (e) | For the year ended December 31, 2011, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $46.5 million to achieve a coverage of 1:1. |
The pretax income from continuing operations for the year ended December 31, 2011, includes consolidated impairment charges of $67.9 million and impairment charges of joint venture investments of $2.9 million, which together aggregate $70.8 million, that are discussed in our Annual Report on Form 10-K for the year ended December 31, 2012, as amended.
| (f) | Due to the pretax loss from continuing operations for the year ended December 31, 2012, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $68.9 million to achieve a coverage of 1:1. |
The pretax loss from continuing operations for the year ended December 31, 2012, includes consolidated impairment charges of $105.4 million and impairment charges of joint venture investments of $26.7 million, which together aggregate $132.1 million, that are discussed in our Annual Report on Form 10-K for the year ended December 31, 2012, as amended.
| (g) | For the three months ended March 31, 2012, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $13.5 million to achieve a coverage of 1:1. |
The pretax income from continuing operations for the three months ended March 31, 2012, includes consolidated impairment charges of $1.5 million, impairment charges of joint venture investments of $0.6 million and loss on debt retirement of $5.6 million, which together aggregate $7.7 million, that are discussed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2013.
