Exhibit 12
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Year Ended December 31
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1993 1992 1991 1990 1989
--------- --------- -------- -------- --------
(In thousands except ratios)
Fixed Charges, as Defined:
Consolidated interest expense......... $ 80,226 $ 97,050 $ 95,627 $101,452 $ 94,937
Rentals representing the
interest factor...................... 5,826 6,453 6,775 5,361 5,075
-------- -------- -------- -------- --------
Consolidated fixed charges
deducted from earnings............... 86,052 103,503 102,402 106,813 100,012
Capitalized interest.................. 7,006 6,578 7,466 8,366 8,665
-------- -------- -------- -------- --------
Fixed Charges, as Defined 1/......... 93,058 110,081 109,868 115,179 108,677
Preferred stock dividends adjusted
for pretax earnings coverage 2/...... 12,663 12,952 21,019 19,457 19,008
-------- -------- -------- -------- --------
Combined Fixed Charges and
Preferred Stock Dividends............ $105,721 $123,033 $130,887 $134,636 $127,685
======== ======== ======== ======== ========
Earnings, as Defined:
Consolidated income (loss) from
continuing operations before
extraordinary items.................. $(14,712) $ 3,514 $ 37,774 $ 69,418 $ 64,315
Income taxes:
Consolidated......................... 7,472 (808) 17,748 25,611 21,572
Proportional part of income taxes
of unconsolidated entities and
50% owned affiliates................ (71) (12)
Consolidated fixed charges deducted
from earnings........................ 86,052 103,503 102,402 106,813 100,012
Amortization of previously
capitalized interest................. 7,707 6,547 6,130 5,615 5,063
-------- -------- -------- -------- --------
Earnings, as Defined 1/............... $ 86,448 $112,744 $164,054 $207,457 $190,962
======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges 3/.. .93 1.02 1.49 1.80 1.76
======== ======== ======== ======== ========
Ratio of Earnings to Combined
Fixed Charges and Preferred Stock
dividends 4/.......................... .82 .92 1.25 1.54 1.50
======== ======== ======== ======== ========
1/ "Earnings" represent the aggregate of (a) income from continuing operations
before extraordinary items, (b) income taxes, (c) amortization of previously
capitalized interest and (d) fixed charges deducted from earnings, on a total
enterprise basis. "Fixed Charges" represent interest expense, capitalized
interest and the portion of rental expense representing the interest factor.
2/ The preferred stock dividend requirements are assumed to be equal to the
pretax earnings which would be required to cover such dividend requirements.
The amount of such pretax earnings required to cover preferred stock
dividends was computed using tax rates for the applicable year. For the
years 1993 and 1992, the Corporation's effective tax rate was a negative
percentage of the pretax income or loss. Therefore, for these years, the
preferred stock dividends have not been adjusted to a pretax equivalent,
since such an adjustment would have been antidilutive to the ratio of
earnings to combined fixed charges and preferred dividends.
3/ For 1993, fixed charges exceeded earnings by $6.6 million.
4/ For the years 1993 and 1992, combined fixed charges and preferred stock
dividends exceeded earnings by $19.3 million and $10.3 million, respectively.