EXHIBIT 12.01
EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO FIXED CHARGES
Dollars in millions) | 2004 | 2003 | 2002 | 2001 | 2000 | |||||
Earnings (loss) before income taxes and cumulative effect of change in accounting principle | $ | 64 | $ | (381) | $ | 84 | $ | (291) | $ | 452 |
Add: | ||||||||||
Interest expense | 123 | 130 | 128 | 146 | 142 | |||||
Appropriate portion of rental expense(1) | 21 | 21 | 28 | 28 | 28 | |||||
Amortization of capitalized interest | 15 | 12 | 13 | 15 | 15 | |||||
Earnings (loss) as adjusted | $ | 223 | $ | (218) | $ | 253 | $ | (102) | $ | 637 |
Fixed charges: | ||||||||||
Interest expense | $ | 123 | $ | 130 | $ | 128 | $ | 146 | $ | 142 |
Appropriate portion of rental expense(1) | 21 | 21 | 28 | 28 | 28 | |||||
Capitalized interest | 3 | 3 | 4 | 5 | 6 | |||||
Total fixed charges | $ | 147 | $ | 154 | $ | 160 | $ | 179 | $ | 176 |
Ratio of earnings (loss) to fixed charges | 1.5x | (A) | 1.6x | (B) | 3.6x | |||||
(1) | For all periods presented, the interest component of rental expense is estimated to equal one-third of such expense. |
(A) | Due to the net loss reported, the coverage ratio was less than 1x. To achieve a coverage ratio of 1x, additional pre-tax earnings of $372 million would have been required for 2003. |
(B) | Due to the net loss reported, the coverage ratio was less than 1x. To achieve a coverage ratio of 1x, additional pre-tax earnings of $281 million would have been required for 2001. |
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