Exhibit 12
American Home Products Corporation
Computation of Ratio of Earnings to Fixed Charges (3)
(In Thousands, except ratio amounts)
Years Ended December 31,
Nine Months Ended ----------------------------------------------------------------
September 30, 2001 2000 1999 1998 1997 1996
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Earnings
Income (loss) from continuing operations before
federal and foreign taxes (2) $1,810,152 ($1,101,040) ($1,907,299) $3,089,936 $2,364,753 $2,398,866
Add:
Fixed charges 329,432 324,887 403,694 371,986 513,860 601,927
Minority interests 15,914 26,784 30,301 620 2,421 13,677
Distributed equity income 0 0 0 771 0 0
Amortization of capitalized interest 1,868 1,917 1,803 1,487 1,057 5,621
Less:
Equity income 53,032 55,991 2,122 473 9,777 8,448
Capitalized interest 72,386 43,303 15,375 9,497 12,898 0
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Total earnings (loss) as defined $2,031,948 ($846,746) ($1,488,998) $3,454,830 $2,859,416 $3,011,643
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Fixed Charges:
Interest and amortization of debt expense $224,124 $238,840 $343,271 $322,970 $461,370 $571,414
Capitalized interest 72,386 43,303 15,375 9,497 12,898 0
Interest factor of rental expense (1) 32,922 42,744 45,048 39,519 39,592 30,513
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Total fixed charges as defined $329,432 $324,887 $403,694 $371,986 $513,860 $601,927
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Ratio of earnings to fixed charges (2) 6.2 - - 9.3 5.6 5.0
(1) A 1/3 factor was used to compute the portion of rental expenses deemed representative of the interest factor.
(2) The results of operations for the nine months ended September 30, 2001 are adequate to cover fixed charges as defined.
However, the ratio is negatively affected by the REDUX and PONDIMIN diet drug litigation charge of $950,000 taken in
the third quarter of 2001. Excluding the additional charge for the REDUX and PONDIMIN diet drug litigation, the
pro forma ratio of earnings to fixed charges would be 9.1 for the nine months ended September 30, 2001.
The results of operations for the year ended December 31, 2000 are inadequate to cover total fixed charges as defined.
The coverage deficiency for the year ended December 31, 2000 is $324,887. Excluding the charge for the REDUX and
PONDIMIN diet drug litigation of $7,500,000, the gain on sale of Immunex common stock of $2,061,204 and the
Warner-Lambert Company termination fee of $1,709,380, the pro forma ratio of earnings to fixed charges would be 8.9 for
the year ended December 31, 2000.
The results of operations for the year ended December 31, 1999 are inadequate to cover total fixed charges as defined.
The coverage deficiency for the year ended December 31, 1999 is $403,694. Excluding the charge for the REDUX and
PONDIMIN diet drug litigation of $4,750,000, the pro forma ratio of earnings to fixed charges would be 8.1 for the year
ended December 31, 1999.
(3) Amounts have been restated to reflect the Cyanamid Agricultural Products business as a discontinued operation.