EXHIBIT 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS FOR THREE MONTHS ENDED MARCH 31: (UNAUDITED) (Dollars in millions) 1998 1997 -------- -------- Earnings before income taxes(1) $ 1,521 $ 1,861 Add: Fixed charges, excluding capitalized interest 525 465 -------- -------- Earnings as adjusted $ 2,046 $ 2,326 ======== ======== Fixed charges: Interest expense $ 406 $ 371 Capitalized interest 4 9 Portion of rental expense representative of interest 119 94 -------- -------- Total fixed charges $ 529 $ 474 ======== ======== Preferred stock dividends(2) 7 8 -------- -------- Combined fixed charges and preferred stock dividends $ 536 $ 482 ======== ======== Ratio of earnings to fixed charges 3.87 4.91 Ratio of earnings to combined fixed charges and preferred stock dividends 3.82 4.83 (1) Earnings before income taxes excludes the company's share in the income and losses of less-than-fifty percent-owned affiliates. (2) Included for the ratio computation for the quarter ended March 31, 1998 and 1997, respectively, are preferred stock dividends of $5 million, or $7 million and $8 million, respectively, representing the pre-tax earnings which would be required to cover such dividend requirements based on the company's effective tax rate for the quarter ended March 31, 1998 and 1997. - 16 -