Exhibit 12 ---------- CONRAIL INC. ----------- COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES ----------------------------------------------------- ($ In Millions) Quarters Ended Quarters Ended Quarters Ended Quarters Ended Years Ended March 31, June 30, September 30, December 31, December 31, -------------- -------------- -------------- -------------- ----------------- 1994(1) 1993 1994 1993 1994 1993 1994 1993 1994 1993 1992 ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Earnings -------- Pre-tax income (loss) $(53) $ 73 $166 $137 $ 174 $ 58 $245 $172 $532 $440 $460 Add: Interest expense 47 44 48 46 48 48 49 47 192 185 172 Rental expense interest factor 9 7 9 5 7 5 17 12 42 29 26 Less equity in undistributed earnings of 20-50% owned companies (3) (9) (4) 2 (3) (4) (7) (3) (17) (14) 4 ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Earnings available for fixed charges $ - $115 $219 $190 $226 $107 $304 $228 $749 $640 $662 ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== Fixed Charges ------------- Interest expense 47 44 48 46 48 48 49 47 192 185 172 Rental expense interest factor 9 7 9 5 7 5 17 12 42 29 26 Capitalized interest 1 1 1 1 1 ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Fixed charges $ 56 $ 51 $ 57 $ 52 $ 56 $ 53 $ 66 $ 59 $235 $215 $199 ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== Ratio of earnings to fixed charges - 2.25x 3.84x 3.65x 4.04x 2.02x 4.61x 3.86x 3.19X 2.98x 3.33x ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== <FN> Note: For the purpose of computing the ratio of earnings to fixed charges, earnings represent income before income taxes plus fixed charges, less equity in undistributed earnings of 20% to 50% owned companies. Fixed charges represent interest expense together with interest capitalized and a portion of rent under long-term operating leases representative of an interest factor. (1) During the first quarter of 1994, the Company recorded a charge of $51 million (after tax benefits of $33 million) for a non-union employee voluntary retirement program and related costs. After this one-time charge, earnings were insufficient by $56 million to cover fixed charges for the quarter. </FN>