1 Page 17 EXHIBIT 12 ITT CORPORATION AND SUBSIDIARIES CALCULATION OF RATIOS OF EARNINGS TO TOTAL FIXED CHARGES AND CALCULATION OF EARNINGS TO TOTAL FIXED CHARGES AND PREFERRED DIVIDEND REQUIREMENTS OF ITT (In millions) Nine Months Ended September 30, 1994 ------------------ Earnings: Income from continuing operations $ 610 Adjustment for distributions in excess of undistributed equity earnings 11 Income tax expense 285 Minority equity in net income 16 Amortization of interest capitalized 6 ------- 928 ------- Fixed Charges: Interest and other financial charges 252 Interest factor attributable to rentals 67 ------- 319 ------- Earnings, as adjusted, from continuing operations $ 1,247 ------- Fixed Charges: Fixed charges above $ 319 Dividends on preferred stock of insurance subsidiary included in minority equity 5 Interest capitalized 6 ------- Total fixed charges 330 Dividends on preferred stock of ITT (pre-income tax basis) 36 ------- Total fixed charges and preferred dividend requirements $ 366 ------- Ratios: Earnings, as adjusted, from continuing operations to total fixed charges 3.78 ------- Earnings, as adjusted, from continuing operations to total fixed charges and preferred dividend requirements of ITT 3.41 ------- NOTES: (a) The adjustment for distributions in excess of undistributed equity earnings represents the adjustment to income for distributions in excess of undistributed earnings of companies in which at least 20% but less than 50% equity is owned. (b) The interest factor attributable to rentals was computed by calculating the estimated present value of all long-term rental commitments and applying the approximate weighted average interest rate inherent in the lease obligations and adding thereto the interest element assumed in short-term cancelable and contingent rentals excluded from the commitment data but included in rental expense. (c) The dividend requirements on preferred stock of ITT have been determined by adding to the total preferred dividends an allowance for income taxes, calculated on the effective income tax rate.