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EXHIBIT 12.01
EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
1997 1996 1995 1994 1993(1)
Earnings from continuing
operations before provision
for income taxes $ 446 $ 607 $ 899 $ 550 $ 439
Add:
Interest expense 87 67 79 87 7
Rental expense (2) 27 22 16 7 11
Amortization of
capitalized interest 16 14 13 15 15
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Earnings as adjusted $ 576 $ 710 $ 1,007 $ 659 $ 472
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Fixed charges:
Interest expense $ 87 $ 67 $ 79 $ 87 $ 7
Rental expense (2) 27 22 16 7 11
Capitalized interest 41 28 9 11 24
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Total fixed charges $ 155 $ 117 $ 104 $ 105 $ 42
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Ratio of earnings to fixed charges 3.7x 6.1x 9.7x 6.3x 11.2x
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(1) The historical amounts for 1993 as presented above, were determined
during periods when the Company was a wholly owned chemical business of
Kodak. If the Company were an independent publicly held entity during 1993,
the pro forma ratio of earnings to fixed charges would approximate 3.7x,
reflecting the assumption of $1,800 million of new borrowings at a 6% annual
interest rate, and adjustments for pension, postretirement and certain other
employee benefit costs. These costs were not allocated to the Company by
Kodak during 1993 and therefore, are not included in the historical amounts
presented above.
(2) For all periods presented, the interest component of rental expense is
estimated to equal one-third of such expense.
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