EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
FOR SIX MONTHS ENDED JUNE 30:
(UNAUDITED)
(Dollars in millions)
1998 1997
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Earnings before income taxes(1) $ 3,598 $ 4,036
Add:
Fixed charges, excluding capitalized interest 1,027 945
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Earnings as adjusted $ 4,625 $ 4,981
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Fixed charges:
Interest expense 789 757
Capitalized interest 11 16
Portion of rental expense representative of
interest 238 188
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Total fixed charges $ 1,038 $ 961
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Preferred stock dividends(2) 14 15
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Combined fixed charges and preferred stock
dividends $ 1,052 $ 976
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Ratio of earnings to fixed charges 4.46 5.18
Ratio of earnings to combined fixed charges and
preferred stock dividends 4.40 5.10
(1) Earnings before income taxes excludes the company's share in the income
and losses of less-than-fifty percent-owned affiliates.
(2) Included in the ratio computation are preferred stock dividends of $10
million for the first six months of 1998 and 1997, or $14 million and $15
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 six months ended June 30, 1998 and 1997.
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