EX-12 8 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

EXHIBIT 12

INTERNATIONAL PAPER COMPANY

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND

PREFERRED STOCK DIVIDENDS

(Dollar amounts in millions)

(Unaudited)

 

TITLE    2005     2006     2007     2008     2009  

A)    Earnings (loss) from continuing operations before income taxes

    $ 286.0      $ 3,188.0      $ 1,654.0      $ (1,153.0 )(1)    $ 1,199.0 (1) 

B)     Noncontrolling interests, net of taxes

      (9.0 )      (17.0 )      (24.0 )      (3.0 )      (18.0 ) 

C)     Fixed charges excluding capitalized interest

      752.0        724.5        552.8        648.2        780.6   

D)    Amortization of previously capitalized interest

      39.2        34.8        27.2        30.0        31.3   

E)     Equity in undistributed earnings of affiliates

      9.7        (5.8 )      (10.7 )      – (1)      - (1) 

F)     Distributed income of equity investees

      –        –        –        73.0        51.0   

G)    Earnings (loss) from continuing operations before income taxes and fixed charges

    $ 1,077.9      $ 3,924.5      $ 2,199.3      $ (404.8 )    $ 2,043.9   

Fixed Charges

           

H)    Interest and amortization of debt expense

    $ 680.8      $ 651.4      $ 487.0      $ 572.5      $ 702.3   

I)       Interest factor attributable to rentals

      61.2        60.2        55.4        65.8        72.0   

J)     Preferred dividends of subsidiaries

      10.0        12.9        10.4        9.9        6.3   

K)     Capitalized interest

      13.7        20.7        29.9        27.5        12.1   

L)     Total fixed charges

    $ 765.7      $ 745.2      $ 582.7      $ 675.7      $ 792.7   

M)   Ratio of earnings to fixed charges

      1.41        5.27        3.77                2.58   

N)    Deficiency in earnings necessary to cover fixed charges

                            $ (1,080.5 )         

 

(1)

Beginning in 2008, earnings from continuing operations are reported before equity earnings. Therefore, equity earnings will no longer be adjusted out of the total in line E.

Note: Dividends on International Paper’s preferred stock are insignificant. As a result, for all periods presented, the ratios of earnings to fixed charges and preferred stock dividends are the same as the ratios of earnings to fixed charges.