EXHIBIT 12.1
Covanta Energy Corporation
Ratios of Earnings to Fixed Charges and Preferred Stock Dividend Requirements
(000s)
Years Ended December 31,
2000 1999 1998 1997 1996
Earnings as Defined in Regulation S-K: (A)
Net income (loss) from continuing operations (B) ($85,621) ($36,290) $37,248 $36,787 $39,081
Income taxes(C) (34,149) (6,917) 21,557 21,715 27,255
Minority interests 4,781 6,176 4,053 1,823 (1,083)
Fixed charges 162,319 154,433 154,331 150,199 154,609
Amortization of capitalized interest 2,199 2,199 2,199 2,199 2,199
Distributed income of equity investees 9,459 12,459 8,479 45,749
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Subtotal 58,988 132,060 227,867 258,472 222,061
Less:
Equity income in equity investees 24,088 13,005 19,340 1,784 3,569
Capitalized interest 2,285 3,158 2,590 1,775 485
Minority interest of subsidiaries with no fixed charges 1,682 1,448 988
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TOTAL EARNINGS $30,933 $114,449 $204,949 $254,913 $218,007
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Fixed Charges as Defined in Regulation S-K: (D)
Interest expense (E) $130,933 $125,917 $129,536 $128,314 $134,076
Amortization of debt issuance costs 8,062 7,258 8,095 7,105 7,309
Capitalized interest 2,285 3,158 2,590 1,775 485
Interest factor in operating lease expense 21,039 18,100 14,110 13,005 12,739
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TOTAL FIXED CHARGES $162,319 $154,433 $154,331 $150,199 $154,609
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PREFERRED DIVIDENDS (F) $97 $169 $219 $237 $277
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TOTAL FIXED CHARGES & PREFERRED DIVIDENDS $162,416 $154,602 $154,550 $150,436 $154,886
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RATIO OF EARNINGS TO FIXED CHARGES (G) 0.19 0.74 1.33 1.70 1.41
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RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED DIVIDENDS (G) 0.19 0.74 1.33 1.69 1.41
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Notes:
(A) The term "earnings" shall be defined as income from continuing operations
before income taxes and adjustment for for minority interests, plus fixed
charges, amortization of capitalized interest, and distributed income of equity
investees, less equity income in equity affiliates, capitalized interest and
minority interest in pre-tax income of subsidiaries that have not incurred fixed
charges.
(B) Excludes income (loss) from discontinued operations, and cumulative effect
of change in accounting principle recorded in 1999.
(C) Includes State income taxes and Federal income taxes on continuing
operations, and excludes taxes applicable to the cumulative effect of change in
accounting principle recorded in 1999.
(D) Fixed charges consist of interest expense on indebtedness of continuing
operations, including that interest included in debt service expense in the
Company's consolidated financials statements, amortization of deferred financing
costs, capitalized interest and the portion of lease rental expense that is
representative of the interest factor.
(E) Excludes interest expense from discontinued operations.
(F) Preferred dividends includes the amount of preferred dividends divided by (1
minus the effective income tax rate applicable to continuing operations).
(G) For 2000 and 1999, the deficiency of earnings to fixed charges totaled
$131,386,000 and $39,984,000, respectively, and the deficiency of earnings to
combined fixed charges and preference share dividends totaled $131,483,000 and
$40,153,000, respectively. These deficiencies are due mainly to losses from
continuing operations incurred in 2000 and 1999, of which pre-tax changes of
$77,240,000 in 2000 relate to the write-down of net assets held for sale.