EX-12 10 l12143aexv12.htm EX-12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12
 

Exhibit 12
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                           
    Year Ended December 31,
     
        Restated
         
    2004   2003   2002   2001   2000
(Dollars in millions)                    
EARNINGS
                                        
Income (loss) before income taxes
   $ 322.7     $ (690.3 )   $ (19.0 )   $ (339.0 )   $ 69.9  
 
Add:
                                        
Amortization of previously capitalized interest
     11.3       10.7       10.2       9.9       9.8  
Minority interest in net income of consolidated subsidiaries with fixed charges
     62.6       36.3       57.1       28.0       45.5  
Proportionate share of fixed charges of investees accounted for by the equity method
     0.3       7.2       4.7       4.1       5.8  
Proportionate share of net loss of investees accounted for by the equity method
     1.1       21.2       17.1       42.8       28.6  
                               
 
Total additions
     75.3       75.4       89.1       84.8       89.7  
 
Deduct:
                                        
Capitalized interest
     6.7       8.0       7.2       1.7       11.9  
Minority interest in net loss of consolidated subsidiaries
     6.4       14.9       5.3       15.0       8.3  
Undistributed proportionate share of net income of investees accounted for by the equity method
     6.1       3.9       1.7       0.3       2.9  
                               
 
Total deductions
     19.2       26.8       14.2       17.0       23.1  
TOTAL EARNINGS
   $ 378.8     $ (641.7 )   $ 55.9     $ (271.2 )   $ 136.5  
                               
FIXED CHARGES
                                        
Interest expense
   $ 368.8     $ 296.3     $ 242.7     $ 298.0     $ 282.9  
Capitalized interest
     6.7       8.0       7.2       1.7       11.9  
Amortization of debt discount, premium or expense
     61.0       43.7       8.8       6.0       1.5  
Interest portion of rental expense(1)
     91.7       88.4       76.7       74.1       73.5  
Proportionate share of fixed charges of investees accounted for by the equity method
     0.3       7.2       4.7       4.1       5.8  
                               
TOTAL FIXED CHARGES
   $ 528.5     $ 443.6     $ 340.1     $ 383.9     $ 375.6  
                               
TOTAL EARNINGS BEFORE FIXED CHARGES
   $ 907.3     $ (198.1 )   $ 396.0     $ 112.7     $ 512.1  
                               
RATIO OF EARNINGS TO FIXED CHARGES
     1.72       *       1.16       **       1.36  
 
  *  Earnings for the year ended December 31, 2003 were inadequate to cover fixed charges. The coverage deficiency was $641.7 million.
  **  Earnings for the year ended December 31, 2001 were inadequate to cover fixed charges. The coverage deficiency was $271.2 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.