1 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, 1996 March 31, 1996 ------------------ ------------------ Fixed Charges as Defined: (1) Interest on Long-Term Debt . . . . . . . . . . . $ 71,395 $ 285,669 (2) Other Interest . . . . . . . . . . . . . . . . . 1,574 14,161 (3) Preferred Dividends Factor of Subsidiary . . . . . . . . . . . . . . . 10,545 41,403 (4) Interest Component of Rentals Charged to Operating Expense . . . . . . . . 384 2,551 ------------------ ------------------ (5) Total Fixed Charges . . . . . . . . . . . . . . $ 83,898 $ 343,784 ================== ================== Earnings as Defined: (6) Income (Loss) from Continuing Operations . . . . . . . . . . . . . $ (16,740) $ 356,811 (7) Income Taxes for Continuing Operations . . . . . . . . . . . . . . . . . (9,910) 179,218 (8) Fixed Charges (line 5) . . . . . . . . . . . . . 83,898 343,784 ------------------ ------------------ (9) Income from Continuing Operations Before Income Taxes and Fixed Charges . . . . . . . . . . . . . . . $ 57,248 $ 879,813 ================== ================== Preferred Dividends Factor of Subsidiary: (10) Preferred Stock Dividends of Subsidiary . . . . . . . . . . . . . . . . . $ 6,632 $ 27,602 (11) Ratio of Pre-Tax Income (Loss) from Continuing Operations to Income (Loss) from Continuing Operations (line 6 plus line 7 divided by line 6) . . . . . . . . . . . . . . . . . 1.59 1.50 ------------------ ------------------ (12) Preferred Dividends Factor of Subsidiary (line 10 times line 11) . . . . . . . . . . . . . . . . . . $ 10,545 $ 41,403 ================== ================== Ratio of Earnings to Fixed Charges (line 9 divided by line 5) . . . . . . . . . . . . . . 0.68 2.56