EXHIBIT 12
W. R. GRACE & CO. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS(a)
(in millions, except ratios)
(Unaudited)
Three Months Ended
Years Ended December 31,(c) March 31,
------------------------------------------------------- -----------------
1996(d) 1995(e) 1994(f) 1993(g) 1992(h) 1997 1996(c)
------ ------- ------- ------ ------- ------ ------
Net income/(loss) from continuing operations ...... $213.8 $(179.6) $ (35.1) $ 28.1 $ 7.7 $ 46.4 $ 43.6
Add/(deduct):
Provision for/(benefit from) income taxes ...... 134.8 (104.5) (42.6) 16.4 84.1 27.3 25.7
Income taxes of 50%-owned companies ............ -- -- -- .1 2.1 -- --
Equity in unremitted losses/(earnings)
of less than 50%-owned companies .............. (.4) .8 (.6) (.5) (2.0) -- --
Interest expense and related financing costs,
including amortization of capitalized interest 160.8 179.8 138.5 122.7 162.7 20.0 47.6
Estimated amount of rental expense
deemed to represent the interest factor ....... 8.4 8.5 10.1 11.3 14.0 1.6 2.8
------ ------- ------- ------ ------- ------ ------
Income/(loss) as adjusted.......................... $517.4 $ (95.0) $ 70.3 $178.1 $ 268.6 $ 95.3 $119.7
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Combined fixed charges and preferred stock dividends:
Interest expense and related financing costs,
including capitalized interest. ............... $177.1 $ 195.5 $ 143.2 $122.8 $ 176.3 $ 24.5 $ 53.1
Estimated amount of rental expense
deemed to represent the interest factor ....... 8.4 8.5 10.1 11.3 14.0 1.6 2.8
------ ------- ------- ------ ------- ------ ------
Fixed charges...................................... 185.5 204.0 153.3 134.1 190.3 26.1 55.9
Preferred stock dividend requirements(b) .......... .6 .5 .5 .8 .8 -- .2
------ ------- ------- ------ ------- ------ ------
Combined fixed charges and preferred
stock dividends................................. $186.1 $ 204.5 $ 153.8 $134.9 $ 191.1 $ 26.1 $ 56.1
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Ratio of earnings to fixed charges ................ 2.79 (i) (i) 1.33 1.41 3.65 2.14
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Ratio of earnings to combined fixed charges
and preferred stock dividends................... 2.78 (i) (i) 1.32 1.41 3.65 2.13
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(a) Grace's preferred stocks were retired in 1996; for additional information,
see Note 1 to the consolidated financial statements in the 1996 10-K.
(b) For each period with an income tax provision, the preferred stock dividend
requirements have been increased to an amount representing the pretax
earnings required to cover such requirements based on Grace's effective tax
rate.
(c) Certain amounts have been restated to conform to the 1997 presentation.
(d) Includes a pretax gain on sales of businesses of $326.4, offset by pretax
provisions of $229.1 for asbestos-related liabilities and insurance
coverage and $107.5 for restructuring costs and asset impairments.
(e) Includes pretax provisions of $275.0 for asbestos-related liabilities and
insurance coverage; $209.5 related to restructuring costs, asset
impairments and other activities; $77.0 for environmental liabilities at
former manufacturing sites; and $30.0 for corporate governance activities.
(f) Includes a pretax provision of $316.0 relating to asbestos-related
liabilities and insurance coverage.
(g) Includes a pretax provision of $159.0 relating to asbestos-related
liabilities and insurance coverage.
(h) Includes a pretax provision of $140.0 relating to a fumed silica plant in
Belgium.
(i) As a result of the losses incurred for the years ended December 31, 1995
and 1994, Grace was unable to fully cover the indicated fixed charges.