EX-12 2 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Computation of Ratio of Earnings to Fixed Charges

Exhibit 12

ALLEGHENY ENERGY, INC. AND SUBSIDIARIES

COMPUTATION IN SUPPORT OF RATIO OF EARNINGS TO FIXED CHARGES

 

     Years Ended December 31,  

(Dollar amounts in thousands)

   2009     2008     2007     2006     2005  

Earnings:

          

Income from continuing operations before income taxes

   $ 635,672      $ 599,856      $ 666,840      $ 496,012      $ 144,574   

Exclude amounts reflected in line above:

          

Amortization of capitalized interest

     3,828        2,413        1,923        1,644        2,695   

Loss (income) from unconsolidated equity investees

     (126     (1,795     (334     (325     770   

Add fixed charges (see below)

     324,486        273,823        216,835        286,769        453,559   

Less amounts included in fixed charges:

          

Capitalized interest

     (25,922     (34,583     (20,028     (6,943     (3,065

Preference security dividend requirements of consolidated subsidiary (a)

     —          —          (1,123     (1,739     (7,284
                                        

Total Earnings (as defined)

   $ 937,938      $ 839,714      $ 864,113      $ 775,418      $ 591,249   
                                        

Fixed charges:

          

Interest expensed including amortization of debt issuance costs

   $ 291,078      $ 231,937      $ 187,226      $ 270,265      $ 436,447   

Interest capitalized including allowance for borrowed funds used during construction

     29,228        37,431        23,903        10,218        4,340   

Estimated interest component of rental expense

     4,180        4,455        4,584        4,547        5,488   

Preference security dividend requirements of consolidated subsidiary (a)

     —          —          1,123        1,739        7,284   
                                        

Total Fixed Charges (as defined)

   $ 324,486      $ 273,823      $ 216,836      $ 286,769      $ 453,559   
                                        

Ratio of Earnings to Fixed Charges (b)

     2.89x        3.07x        3.99x        2.70x        1.30x   
                                        

 

(a) The preference security dividend requirement represents the amount of pre-tax earnings required to pay the dividends on preference securities of a subsidiary.
(b) The ratio of earnings to fixed charges excludes interest expense (benefit) on uncertain tax positions of $1.0 million, $(4.5) million and $0.5 million for the years ended December 31, 2009, 2008 and 2007, respectively, which was recorded as a component of income tax expense.