EX-12 7 ratioofearnings-63012_ex121.htm Ratio of Earnings-6.30.12_ 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)
Six Months Ended June 30,
Year Ended December 31,
EARNINGS
2012
2011
2010
2009
2008
2007
Pre-tax income (loss) from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees
$
206

$
599
 
$
(3
)
$
(365
)
$
176

$
436

Add:
 
 
 
 
 
 
Amortization of previously capitalized interest
4

9
 
9

8

8

10

Distributed income of equity investees
11

8
 
4

3

3

3

          Total additions
15

17
 
13

11

11

13

Deduct:
 
 
 
 
 
 
Capitalized interest
4

31
 
26

14

23

10

Minority interest in pre-tax income of consolidated subsidiaries with no fixed charges
12

9
 
6

4

11

14

  Total deductions
16

40
 
32

18

34

24

TOTAL EARNINGS (LOSS)
$
205

$
576
 
$
(22
)
$
(372
)
$
153

$
425

 
 
 
 
 
 
 
FIXED CHARGES
 
 
 
 
 
 
Interest expense
$
184

$
330
 
$
316

$
311

$
320

$
470

Capitalized interest
4

31
 
26

14

23

10

Amortization of debt discount, premium or expense
7

14
 
14

16

17

26

Interest portion of rental expense (1)
59

118
 
111

105

105

101

Proportionate share of fixed charges of investees accounted for by the equity method
1

1
 
1

1

1

1

 
 
 
 
 
 
 
TOTAL FIXED CHARGES
$
255

$
494
 
$
468

$
447

$
466

$
608

 
 
 
 
 
 
 
TOTAL EARNINGS BEFORE FIXED CHARGES
$
460

$
1,070
 
$
446

$
75

$
619

$
1,033

 
 
 
 
 
 
 
Preferred Dividends
$
15

$
22
 
$ *

$ *

$ *

$ *

 
 
 
 
 
 
 
Ratio of pre-tax income to net income
2.00

1.48
 
     *

     *

     *

     *

 
 
 
 
 
 
 
Preferred Dividend Factor
$
30

$
33
 
$ *

$ *

$ *

$ *

Total Fixed Charges
255

494
 
468

447

466

608

TOTAL FIXED CHARGES AND PREFERRED DIVIDENDS
$
285

$
527
 
$
468

$
447

$
466

$
608

 
 
 
 
 
 
 
RATIO OF EARNINGS TO FIXED CHARGES
1.80

2.17
 
**

***

1.33

1.70

RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
1.61

2.03
 
**

***

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.

(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.