EX-12 2 h84347exv12.htm EX-12 exv12
Exhibit 12
EL PASO CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
                 
    For the nine months ended September 30,  
    2011     2010  
Earnings
                
Income before income taxes
   $ 109     $ 1,131  
Income from equity investees
     (98 )     (167 )
 
            
Income before income taxes before adjustment for income from equity investees
     11       964  
 
                
Fixed charges
     853       853  
Distributed income of equity investees
     48       52  
Capitalized interest
     (58 )     (41 )
Preferred returns on consolidated subsidiaries
    (65 )     (21 )
 
            
 
                
Total earnings available for fixed charges
   $ 789     $ 1,807  
 
            
 
                
Fixed charges
                
Interest and debt expense
   $ 779     $ 823  
Interest component of rent
     9       9  
Preferred returns on consolidated subsidiaries
     65       21  
 
            
 
                
Total fixed charges
   $ 853     $ 853  
 
            
 
                
Ratio of earnings to fixed charges (1)
     —       2.12  
 
            
 
                
Fixed charges
                
Interest and debt expense
   $ 779     $ 823  
Interest component of rent
     9       9  
Preferred returns on consolidated subsidiaries
     65       21  
 
            
 
                
Total fixed charges
   $ 853     $ 853  
 
            
 
                
Preferred stock dividend of parent
     —       40  
 
            
 
                
Total fixed charges and preferred stock dividend
   $ 853     $ 893  
 
            
 
                
Ratio of earnings to combined fixed charges and preferred stock dividends (2)
     —       2.02  
 
            
 
(1)   Earnings for the nine months ended September 30, 2011 were inadequate to cover fixed charges by $64 million.
 
(2)   Earnings for the nine months ended September 30, 2011 were inadequate to cover fixed charges and preferred stock dividends by $64 million.
For purposes of computing these ratios, earnings means income (loss) before income taxes before:
-   income or loss from equity investees, adjusted to reflect actual distributions from equity investments; and
 
-   fixed charges;
less:
-   capitalized interest; and
 
-   preferred returns on consolidated subsidiaries.
Fixed charges means the sum of the following:
-   interest costs, not including interest on tax liabilities which is included in income tax expense on our income statement;
 
-   amortization of debt costs;
 
-   that portion of rental expense which we believe represents an interest factor; and
 
-   preferred returns on consolidated subsidiaries.