EX-12 2 ratioofearningsex121.htm EXHIBIT 12.1 Ratio of Earnings Ex 12.1


EXHIBIT 12.1
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
(Dollars in millions)
Nine Months Ended September 30,
Year Ended December 31,
EARNINGS
2011
2010
2009
2008
2007
2006
Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees
$
602

$
(3
)
$
(365
)
$
176

$
436

$
(230
)
 
 
 
 
 
 
 
Add:
 
 
 
 
 
 
Amortization of previously capitalized interest
7

9
 
8

8

10

12

Distributed income of equity investees
6

4
 
3

3

3

5

          Total additions
13

13
 
11

11

13

17

 
 
 
 
 
 
 
Deduct:
 
 
 
 
 
 
Capitalized interest
25

26
 
14

23

10

7

Minority interest in pre-tax income of consolidated subsidiaries with no fixed charges
10

6
 
4

11

14

8

  Total deductions
35

32
 
18

34

24

15

 
 
 
 
 
 
 
TOTAL EARNINGS (LOSS)
$
580

$
(22
)
$
(372
)
$
153

$
425

$
(228
)
 
 
 
 
 
 
 
FIXED CHARGES
 
 
 
 
 
 
Interest expense
$
241

$
316
 
$
311

$
320

$
470

$
467

Capitalized interest
25

26
 
14

23

10

7

Amortization of debt discount, premium or expense
10

14
 
16

17

26

21

Interest portion of rental expense (1)
83

111
 
105

105

101

98

Proportionate share of fixed charges of investees accounted for by the equity method
—

1
 
1

1

1

—

 
 
 
 
 
 
 
TOTAL FIXED CHARGES
$
359

$
468
 
$
447

$
466

$
608

$
593

 
 
 
 
 
 
 
TOTAL EARNINGS BEFORE FIXED CHARGES
$
939

$
446
 
$
75

$
619

$
1,033

$
365

 
 
 
 
 
 
 
Preferred Dividends
$
15

$ *
 
$ *

$ *

$ *

$ *

 
 
 
 
 
 
 
Ratio of pre-tax income to net income
1.56

     *
 
     *

     *

     *

     *

 
 
 
 
 
 
 
Preferred Dividend Factor
$
23

$ *
 
$ *

$ *

$ *

$ *

Total Fixed Charges
359

468
 
447

466

608

593

TOTAL FIXED CHARGES AND PREFERRED DIVIDENDS
$
382

$
468
 
$
447

$
466

$
608

$
593

 
 
 
 
 
 
 
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
2.46

**
 
***

1.33

1.70

****

*    No preferred stock was outstanding for these periods.
**    Earnings for the year ended December 31, 2010 were inadequate to cover fixed charges. The coverage deficiency was $22 million.
***    Earnings for the year ended December 31, 2009 were inadequate to cover fixed charges. The coverage deficiency was $372 million.
****    Earnings for the year ended December 31, 2006 were inadequate to cover fixed charges. The coverage deficiency was $228 million.
(1) Interest portion of rental expense is estimated to equal 1/3 of such expense, which is considered a reasonable approximation of the interest factor.