EX-12 2 h46292exv12.htm RATIO OF EARNINGS TO COMBINED FIXED CHARGES exv12
 

Exhibit 12
EL PASO CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
                 
    For the Three Months ended March 31,  
    2006     2007  
Earnings
                
Pre-tax income (loss) from continuing operations
   $ 425     $ (67 )
Minority interests in consolidated subsidiaries
     —       1  
Income from equity investees
     (29 )     (37 )
 
            
 
                
Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries and (income) loss from equity investees
     396       (103 )
 
                
Fixed charges
     368       310  
Distributed income of equity investees
     38       74  
Capitalized interest
     (10 )     (12 )
Preferred returns on consolidated subsidiaries
     —       (1 )
 
            
 
                
Total earnings available for fixed charges
   $ 792     $ 268  
 
            
 
Fixed charges
                
Interest and debt expense
   $ 365     $ 305  
Interest component of rent
     3       4  
Preferred returns on consolidated subsidiaries
     —       1  
 
            
 
                
Total fixed charges
   $ 368     $ 310  
 
            
 
                
Ratio of earnings to fixed charges (1)
     2.15       —  
 
            
 
Fixed charges
                
Interest and debt expense
   $ 365     $ 305  
Interest component of rent
     3       4  
Preferred returns on consolidated subsidiaries
     —       1  
Preferred stock dividend of parent
     14       9  
 
            
 
                
Total fixed charges
   $ 382     $ 319  
 
            
 
                
Ratio of earnings to combined fixed charges and preferred stock dividends (2)
     2.07       —  
 
            
 
                
 
(1)   Earnings for the quarter ended March 31, 2007 were inadequate to cover fixed charges by $42 million.
 
(2)   Earnings for the quarter ended March 31, 2007 were inadequate to cover fixed charges and preferred stock dividends by $51 million.
     For purposes of computing these ratios, earnings means pre-tax income (loss) from continuing operations before:
  -   minority interests in consolidated subsidiaries;
 
  -   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 FIN No. 48 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 stock dividends and preferred returns on consolidated subsidiaries.