Exhibit 12
Cendant Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
Year Ended December 31,
------------------------------------------------
2000 1999 1998 1997 1996
------ ----- ----- ----- -----
Earnings available to cover fixed charges:
Income (loss) before income taxes and minority
interest $1,106 $(574) $ 315 $ 257 $ 533
Plus: Fixed charges 574 625 677 409 325
Less: Equity income in unconsolidated affiliates 17 18 14 51 --
Capitalized interest -- -- -- -- 1
Minority interest in mandatorily redeemable
preferred trust securities issued by subsidiary
holding solely senior debentures issued by the
Company 131 96 80 -- --
------ ----- ----- ----- -----
Earnings available to cover fixed charges $1,532 $ (63) $ 898 $ 615 $ 857
====== ===== ===== ===== =====
Fixed charges:(a)
Interest, including amortization of deferred
financing costs $ 381 $ 463 $ 509 $ 379 $ 300
Capitalized interest -- -- -- -- 1
Other charges, financing costs -- -- 28 -- --
Minority interest in mandatorily redeemable
preferred securities issued by subsidiaries 131 96 80 -- --
Interest portion of rental payment 62 66 60 30 24
------ ----- ----- ----- -----
Total fixed charges $ 574 $ 625 $ 677 $ 409 $ 325
------ ----- ----- ----- -----
Ratio of earnings to fixed charges 2.67x(b) (c) 1.33x(b) 1.50x(b) 2.64x
====== ===== ===== ===== =====
- ----------
(a) 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 operating lease rentals).
(b) For the years ended December 31, 2000, 1998 and 1997, income (loss) before
income taxes and minority interest includes other charges, net, of $119
million, $810 million (exclusive of financing costs of $30 million) and
$704 million, respectively. Excluding such charges, the ratio of earnings
to fixed charges for the years ended December 31, 2000, 1998 and 1997 is
2.88x, 2.52x and 3.22x, respectively.
(c) Earnings were inadequate to cover fixed charges for the year ended
December 31, 1999 (deficiency of $688 million) as a result of unusual
charges of $3,032 million, partially offset by $1,109 million related to
the net gain on dispositions of businesses. Excluding such charges and net
gain, the ratio of earnings to fixed charges is 2.98x.