EX-12 8 xrx-123112xex12.htm EXHIBIT XRX-12.31.12-Ex12


EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges, the ratio of earnings to combined fixed charges and preferred stock dividends, as well as any deficiency of earnings are determined using the following applicable factors:
 
Earnings available for fixed charges are calculated first, by determining the sum of: (a) income (loss) from continuing operations before income taxes and equity income; (b) distributed equity income; (c) fixed charges, as defined below; and (d) amortization of capitalized interest, if any. From this total, we subtract capitalized interest and net income attributable to noncontrolling interests.
 
Fixed charges are calculated as the sum of: (a) interest costs (both expensed and capitalized); (b) amortization of debt expense and discount or premium relating to any indebtedness; and (c) that portion of rental expense that is representative of the interest factor.

Preferred stock dividends used in the ratio of earnings to combined fixed charges and preferred stock dividends consist of the amount of pre-tax earnings required to cover dividends paid on our Series A convertible preferred stock.
 
 
Year Ended December 31,
(in millions)
 
2012
 
2011
 
2010
 
2009
 
2008
Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Interest expense
 
$
428

 
$
478

 
$
592

 
$
527

 
$
567

Capitalized interest
 
13

 
13

 
5

 
8

 
10

Portion of rental expense which represents interest factor
 
215

 
227

 
211

 
89

 
84

Total Fixed Charges
 
$
656

 
$
718

 
$
808

 
$
624

 
$
661

 
 
 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Pre-tax income
 
$
1,348

 
$
1,565

 
$
815

 
$
627

 
$
(79
)
Distributed equity income of affiliated companies
 
62

 
63

 
41

 
16

 
60

Add: Fixed charges
 
656

 
718

 
808

 
624

 
661

Less: Capitalized interest
 
(13
)
 
(13
)
 
(5
)
 
(8
)
 
(10
)
Less: Net income-noncontrolling interests
 
(28
)
 
(33
)
 
(31
)
 
(31
)
 
(35
)
Total Earnings Available for Fixed Charges
 
$
2,025

 
$
2,300

 
$
1,628

 
$
1,228

 
$
597

 
 
 

 
 

 
 

 
 

 
 

Ratio of Earnings to Fixed Charges
 
3.09

 
3.20

 
2.01

 
1.97

 
*

 
 
 
 
 
 
 
 
 
 
 
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Interest expense
 
$
428

 
$
478

 
$
592

 
$
527

 
$
567

Capitalized interest
 
13

 
13

 
5

 
8

 
10

Portion of rental expense which represents interest factor
 
215

 
227

 
211

 
89

 
84

Total Fixed Charges before preferred stock dividends pre-tax income requirements
 
656

 
718

 
808

 
624

 
661

Preferred stock dividends pre-tax income requirements
 
39

 
39

 
35

 
—

 
—

Total Combined Fixed Charges and Preferred Stock Dividends
 
$
695

 
$
757

 
$
843

 
$
624

 
$
661

 
 
 
 
 
 
 
 
 
 
 
Earnings Available for Fixed Charges:
 
 
 
 
 
 
 
 
 
 
Pre-tax income
 
$
1,348

 
$
1,565

 
$
815

 
$
627

 
$
(79
)
Distributed equity income of affiliated companies
 
62

 
63

 
41

 
16

 
60

Add: Fixed charges before preferred stock dividends
 
656

 
718

 
808

 
624

 
661

Less: Capitalized interest
 
(13
)
 
(13
)
 
(5
)
 
(8
)
 
(10
)
Less: Net income-noncontrolling interests
 
(28
)
 
(33
)
 
(31
)
 
(31
)
 
(35
)
Total Earnings Available for Fixed Charges and Preferred Stock Dividends
 
$
2,025

 
$
2,300

 
$
1,628

 
$
1,228

 
$
597

 
 
 
 
 
 
 
 
 
 
 
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends
 
2.91

 
3.04

 
1.93

 
1.97

 
*


* Earnings for year ended December 31, 2008 were inadequate to cover fixed charges by $64.