PPL CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (Millions of Dollars) | ||||||||||||||||||||
2008 (a) | 2007 (a) | 2006 (a) | 2005 (a) | 2004 (a) | ||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||
Income from Continuing Operations Before Income Taxes (b) (c) | $ | 1,357 | $ | 1,281 | $ | 1,099 | $ | 780 | $ | 849 | ||||||||||
Less earnings of equity method investments | 1 | 3 | 4 | 5 | 3 | |||||||||||||||
Distributed income from equity method investments | 1 | 5 | 3 | 5 | 5 | |||||||||||||||
1,357 | 1,283 | 1,098 | 780 | 851 | ||||||||||||||||
Total fixed charges as below | 568 | 609 | 559 | 569 | 563 | |||||||||||||||
Less: | ||||||||||||||||||||
Capitalized interest | 59 | 58 | 24 | 9 | 6 | |||||||||||||||
Preferred security distributions of subsidiaries on a pre-tax basis | 27 | 23 | 24 | 5 | 5 | |||||||||||||||
Interest expense related to discontinued operations | 8 | 35 | 36 | 37 | 30 | |||||||||||||||
Total fixed charges included in Income from Continuing Operations Before Income Taxes | 474 | 493 | 475 | 518 | 522 | |||||||||||||||
Total earnings | $ | 1,831 | $ | 1,776 | $ | 1,573 | $ | 1,298 | $ | 1,373 | ||||||||||
Fixed charges, as defined: | ||||||||||||||||||||
Interest on long-term debt (b) | $ | 478 | $ | 522 | $ | 482 | $ | 480 | $ | 496 | ||||||||||
Interest on short-term debt and other interest | 28 | 35 | 13 | 29 | 20 | |||||||||||||||
Amortization of debt discount, expense and premium - net | 12 | 8 | 11 | 23 | 8 | |||||||||||||||
Estimated interest component of operating rentals | 22 | 21 | 29 | 32 | 34 | |||||||||||||||
Preferred securities distributions of subsidiaries on a pre-tax basis | 27 | 23 | 24 | 5 | 5 | |||||||||||||||
Fixed charges of majority-owned share of 50% or less-owned persons | 1 | |||||||||||||||||||
Total fixed charges (d) | $ | 568 | $ | 609 | $ | 559 | $ | 569 | $ | 563 | ||||||||||
Ratio of earnings to fixed charges | 3.2 | 2.9 | 2.8 | 2.3 | 2.4 | |||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends (e) | 3.2 | 2.9 | 2.8 | 2.3 | 2.4 |
(a) | Certain line items have been revised due to the anticipated sales of the Long Island generation business and the majority of the Maine hydroelectric generation business and the related reclassification of operating results to Discontinued Operations. See Note 10 to the Financial Statements for additional information. | |
(b) | 2005 and 2004 were revised to reflect the retrospective application of FSP APB 14-1. See Note 1 to the Financial Statements for additional information. | |
(c) | Revised to reflect the retrospective application of SFAS 160. See Note 1 to the Financial Statements for additional information. | |
(d) | Interest on unrecognized tax benefits is not included in fixed charges. | |
(e) | PPL, the parent holding company, does not have any preferred stock outstanding; therefore, the ratio of earnings to combined fixed charges and preferred stock dividends is the same as the ratio of earnings to fixed charges. |