Eastman Chemical (EMN) 10-K 2005 FY Annual report

EXHIBIT 12.01

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES

COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO FIXED CHARGES

Dollars in millions)		2005		2004		2003		2002		2001
Earnings (loss) before income taxes and cumulative effect of change in accounting principle	$	783	$	64	$	(381)	$	84	$	(291)
Add:
Interest expense		113		123		130		128		146
Appropriate portion of rental expense (1)		21		21		21		28		28
Amortization of capitalized interest		11		15		12		13		15
Earnings (loss) as adjusted	$	928	$	223	$	(218)	$	253	$	(102)
Fixed charges:
Interest expense	$	113	$	123	$	130	$	128	$	146
Appropriate portion of rental expense (1)		21		21		21		28		28
Capitalized interest		5		3		3		4		5
Total fixed charges	$	139	$	147	$	154	$	160	$	179
Ratio of earnings (loss) to fixed charges		6.7x		1.5x		(A)		1.6x		(B)

⁽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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