EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
FOR NINE MONTHS ENDED SEPTEMBER 30:
(UNAUDITED)
(Dollars in millions)
1996 1995
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Earnings before income taxes(1) $ 5,706 $ 5,286
Add:
Fixed charges, excluding capitalized interest 1,450 1,513
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Earnings as adjusted $ 7,156 $ 6,799
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Fixed charges:
Interest expense 1,153 1,209
Capitalized interest 24 16
Portion of rental expense representative of
interest 297 304
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Total fixed charges $ 1,474 $ 1,529
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Preferred stock dividends(2) 25 32
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Combined fixed charges and preferred stock
dividends $ 1,499 $ 1,561
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Ratio of earnings to fixed charges 4.85 4.45
Ratio of earnings to combined fixed charges and
preferred stock dividends 4.78 4.36
(1) Earnings before income taxes excludes the company's share in the
income and losses of less-than-fifty percent-owned affiliates.
(2) The company reported preferred stock dividends and transaction costs
of $15 million and $57 million for the nine months ended September 30,
1996 and 1995, respectively. Excluded from the ratio computation for
the nine months ended September 30, 1995 are transaction costs of
$42 million relating to the repurchase of Series A 7 1/2 percent
preferred stock depositary shares. Included are preferred stock
dividends of $15 million, for the nine months ended September 30, 1996
and 1995 or $25 million and $32 million representing the pre-tax earnings
which would be required to cover such dividend requirements based
on the company's effective income tax rate for the nine months ended
September 30, 1996 and 1995, respectively.
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