Loews Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratios)
Nine Months Ended
September 30 Year Ended December 31
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1996 1995 1995 1994 1993 1992 1991
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Income (loss) before
cumulative effect of changes
in accounting principle ...... $1,136.1 $1,020.6 $1,765.7 $267.8 $594.1 $ (22.1) $ 904.3
Add (Deduct):
Undistributed income of
associated companies ....... (8.5) (10.0) 61.5 (46.2) (23.1) 463.1
Income taxes (benefits) ..... 639.7 551.6 945.3 (9.0) 46.6 (388.7) 217.5
Minority interest ........... 171.1 96.1 128.1 7.3 48.7 (107.7) 109.3
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1,946.9 1,659.8 2,829.1 327.6 643.2 (541.6) 1,694.2
Fixed charges ................. 273.6 235.7 338.0 202.1 189.3 180.0 192.9
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Income (loss) before
cumulative effect of changes
in accounting principle ...... $2,220.5 $1,895.5 $3,167.1 $529.7 $832.5 $(361.6) $1,887.1
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Fixed charges:
Interest expense ............ $240.3 $195.4 $282.5 $174.6 $162.3 $148.8 $163.6
1/3 of rental expense ....... 33.3 40.3 55.5 27.5 27.0 31.2 29.3
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$273.6 $235.7 $338.0 $202.1 $189.3 $180.0 $192.9
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Ratio of income before
cumulative effect of changes
in accounting principle to
fixed charges (a) ............ 8.lx 8.0x 9.4x 2.6x(b) 4.4x(c) (c) 9.8x(b)
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(a) The ratio of income before cumulative effect of changes in accounting
principles to fixed charges was computed by dividing income before
cumulative effect of changes in accounting principles available for fixed
charges (income before cumulative effect of changes in accounting
principles, undistributed income of associated companies, income taxes and
minority interest, adjusted for interest expense, amortization of debt
issuance costs and one-third of rent expense) by fixed charges. Fixed
charges include (i) interest costs, (ii) amortization of debt issuance
costs, and (iii) one-third of rent expense, which the Company believes
represents the interest factor attributable to rent. Since no preferred
stock was outstanding during the periods presented, the ratio of income
before cumulative effect of changes in accounting principles to fixed
charges and preferred stock dividends would be the same as the ratios
presented here.
(b) Income before cumulative effect of changes in accounting principles for
the fiscal years ended December 31, 1994 and 1991 included $91.6 and
$417.6, respectively, of distribution of CBS equity earnings.
(c) Income before cumulative effect of changes in accounting principles was
insufficient to cover fixed charges by $541.6 for the year ended December
31, 1992. This deficit reflected a $1,500.0 increase in claim reserves by
Casualty with respect to its potential exposure to asbestos-related bodily
injury cases, resulting in an after-tax charge of $822.7 against the
Company's net income for the year ended December 31, 1992. In 1993, The
Company added $500.0 to such claim reserve, resulting in an after-tax
charge of $270.1 against the Company's net income for the year ended
December 31, 1993.