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)
Six Months Ended
Years Ended December 31,(c) June 30,
-------------------------------------------------- ---------------------
1996 (d) 1995 (e) 1994 (f) 1993 (g) 1992 (h) 1997 (i) 1996 (c)(j)
-------- -------- -------- -------- -------- -------- -----------
Net income/(loss) from continuing operations ........... $213.8 $(179.6) $(35.1) $ 28.1 $ 7.7 $163.8 $278.6
Add/(deduct):
Provision for/(benefit from) income taxes .......... 134.8 (104.5) (42.6) 16.4 84.1 99.6 157.4
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 40.3 93.1
Estimated amount of rental expense
deemed to represent the interest factor .......... 8.4 8.5 10.1 11.3 14.0 2.7 5.5
-------- -------- -------- -------- -------- -------- --------
Income/(loss) as adjusted .............................. $517.4 $ (95.0) $ 70.3 $ 178.1 $268.6 $306.4 $534.6
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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 $ 49.6 $104.2
Estimated amount of rental expense
deemed to represent the interest factor .......... 8.4 8.5 10.1 11.3 14.0 2.7 5.5
-------- -------- -------- -------- -------- -------- --------
Fixed charges .......................................... 185.5 204.0 153.3 134.1 190.3 52.3 109.7
Preferred stock dividend requirements(b) ............... .6 .5 .5 .8 .8 -- .4
-------- -------- -------- -------- -------- -------- --------
Combined fixed charges and preferred
stock dividends ..................................... $186.1 $ 204.5 $153.8 $ 134.9 $191.1 $ 52.3 $110.1
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Ratio of earnings to fixed charges ..................... 2.79 (k) (k) 1.33 1.41 5.86 4.87
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to combined fixed charges
and preferred stock dividends ....................... 2.78 (k) (k) 1.32 1.41 5.86 4.86
======== ======== ======== ======== ======== ======== ========
(a) Grace's preferred stocks were retired in 1996; for additional
information, see Note 1 to the consolidated financial statements in
the 1996 Form 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) Includes a pretax gain of $103.1 on the sale of Grace's specialty
polymers business and a pretax provision of $12.4 relating to
restructuring costs.
(j) Includes a pretax gain of $326.4 on the sale of businesses,
principally the water treatment and process chemicals business, and a
pretax provision of $53.7 relating to restructuring costs.
(k) 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.