EXHIBIT 12 HOUSTON INDUSTRIES INCORPORATED AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (THOUSANDS OF DOLLARS) THREE TWELVE MONTHS ENDED MONTHS ENDED MARCH 31, 1995 MARCH 31, 1995 ------------------ ------------------ Fixed Charges as Defined: (1) Interest on Long-Term Debt....................... $ 65,216 $ 264,065 (2) Other Interest................................... 8,999 27,663 (3) Preferred Dividends Factor of Subsidiary................................. 12,938 52,814 (4) Interest Component of Rentals Charged to Operating Expense.................. 936 3,813 ------------------ ------------------ (5) Total Fixed Charges.............................. $ 88,089 $ 348,355 ================== ================== Earnings as Defined: (6) Income from Continuing Operations Before Cumulative Effect of Change in Accounting.......................... $ 23,849 $ 406,236 (7) Income Taxes for Continuing Operations Before Cumulative Effect of Change in Accounting................ 10,427 218,199 (8) Fixed Charges (line 5)........................... 88,089 348,355 ------------------ ------------------ (9) Income from Continuing Operations Before Cumulative Effect of Change in Accounting,Income Taxes and Fixed Charges............................. $ 122,365 $ 972,790 ================== ================== Preferred Dividends Factor of Subsidiary: (10) Preferred Stock Dividends of Subsidiary.................................... $ 8,985 $ 34,295 (11) Ratio of Pre-Tax Income from Continuing Operations to Income from Continuing Operations (line 6 plus line 7 divided by line 6)................................... 1.44 1.54 ------------------ ------------------ (12) Preferred Dividends Factor of Subsidiary (line 10 times line 11)...................................... $ 12,938 $ 52,814 ================== ================== Ratio of Earnings to Fixed Charges (line 9 divided by line 5)............................ 1.39 2.79