EXHIBIT 12 CENDANT CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN THOUSANDS) NINE MONTHS ENDED YEARS ENDED DECEMBER 31, SEPTEMBER 30, ---------------------------------------------------------------------- 1997 1996 1995 1994 1993 1992 ------------- ----------- ----------- ----------- ----------- ----------- Income before income taxes, minority interest and extraordinary loss (1) $ 747,230 $ 713,670 $ 503,332 $ 464,332 $ 365,930 $ 236,949 Plus: Fixed charges 304,720 345,421 302,539 238,212 206,031 240,103 Less: Capitalized interest -- (560) -- (246) (440) -- ----------- ----------- ----------- ----------- ----------- ----------- Earnings available to cover fixed charges $ 1,051,950 $ 1,058,531 $ 805,871 $ 702,298 $ 571,521 $ 477,052 =========== =========== =========== =========== =========== =========== Fixed charges (1, 2): Interest, including amortization of deferred loans costs $ 281,207 $ 317,127 $ 280,499 $ 219,417 $ 187,447 $ 226,350 Capitalized interest -- 560 -- 246 440 -- Interest portion of rental payment 23,513 27,734 22,040 18,549 18,144 13,753 ----------- ----------- ----------- ----------- ----------- ----------- Total fixed charges $ 304,720 $ 345,421 $ 302,539 $ 238,212 $ 206,031 $ 240,103 =========== =========== =========== =========== =========== =========== Ratio of earnings to fixed charges 3.45 3.06 2.66 2.95 2.77 1.99 =========== =========== =========== =========== =========== =========== - --------- (1) For years ended 1992 through 1995, information included for the Company and PHH Corporation is based on the fiscal years ended January 31. (2) Fixed charges consist of interest expense on all indebtedness (including amortization of deferred financing costs) and the portion of operating lease rental expense that is representative of the interest factor (deemed to be one-third of operation lease rentals).