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,
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1998(d) 1997(e) 1996(f) 1995(g) 1994(h) 1999 1998
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Net income/(loss) from continuing operations $(145.7) $88.2 $ 112.9 $(324.8) $(185.4) $20.0 $11.8
Add/(deduct):
Provision for/(benefit from) income taxes (69.0) 55.2 70.4 (192.4) (120.9) 11.7 7.6
Equity in unremitted (earnings)/losses of less
than 50%-owned companies...................... (10.8) (7.0) (.4) .8 (.6) (2.9) (1.9)
Interest expense and related financing costs,
including amortization of capitalized interest 37.9 93.7 169.8 183.5 145.5 4.5 21.4
Estimated amount of rental expense deemed
to represent the interest factor.............. 5.2 6.9 8.4 8.5 10.1 2.3 1.8
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Income/(loss) as adjusted.......................... $(182.4) $ 237.0 $ 361.1 $(324.4) $(151.3) $ 35.6 $40.7
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Combined fixed charges and preferred stock dividends:
Interest expense and related financing costs,
including capitalized interest................ $37.8 $98.5 $ 186.1 $ 199.2 $ 150.2 $ 4.1 $21.0
Estimated amount of rental expense deemed
to represent the interest factor.............. 5.2 6.9 8.4 8.5 10.1 2.3 1.8
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Fixed charges...................................... 43.0 105.4 194.5 207.7 160.3 6.4 22.8
Preferred stock dividend requirements (b).......... -- -- .6 .5 .5 -- --
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Combined fixed charges and preferred stock dividends $43.0 $105.4 $ 195.1 $ 208.2 $ 160.8 $ 6.4 $22.8
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Ratio of earnings to fixed charges................. (i) 2.25 1.86 (i) (i) 5.61 1.79
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Ratio of earnings to combined fixed charges and
preferred stock dividends..................... (i) 2.25 1.85 (i) (i) 5.61 1.79
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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 1998 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 1998 presentation.
(d) Includes a pretax provision of $376.1 for asbestos-related liabilities and
insurance coverage; $21.0 relating to restructuring costs and asset
impairments, offset by a pretax gain of $38.2 for the receipt of insurance
proceeds related to environmental matters, partially offset by a charge to
reflect a change in the environmental remediation strategy for a
particular site.
(e) Includes a pretax gain of $103.1 on sales of businesses, offset by a
pretax provision of $47.8 for restructuring costs and asset impairments.
(f) Includes a pretax gain of $326.4 on sales of businesses, offset by pretax
provisions of $229.1 for asbestos-related liabilities and insurance
coverage and $34.7 for restructuring costs and asset impairments.
(g) Includes pretax provisions of $275.0 for asbestos-related liabilities and
insurance coverage; $151.3 relating to restructuring costs, asset
impairments and other activities; $77.0 for environmental liabilities at
former manufacturing sites; and $30.0 for corporate governance activities.
(h) Includes a pretax provision of $316.0 relating to asbestos-related
liabilities and insurance coverage.
(i) As a result of the losses incurred for the years ended December 31, 1998,
1995 and 1994, Grace was unable to fully cover the indicated fixed
charges.