EX-12 6 y05947exv12.htm STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EX-12
 

Exhibit 12

Cendant Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)

                                         
    Year Ended December 31,  
    2004     2003     2002     2001     2000  
Earnings available to cover fixed charges:
                                        
Income before income taxes, minority interest and equity in Homestore
   $ 2,554     $ 2,173     $ 1,547     $ 638     $ 980  
Plus: Fixed charges
     1,100       1,022       826       963       545  
Amortization of capitalized interest
     6       4       -       -       -  
Less: Equity income (loss) in unconsolidated affiliates
     -       -       2       (5 )     17  
Minority interest (pre-tax) in mandatorily redeemable preferred interest in a subsidiary
     6       6       14       23       25  
Minority interest (pre-tax) in mandatorily redeemable trust preferred securities
     -       -       -       14       106  
Minority interest in pre-tax income of subsidiaries that have not incurred fixed charges (a)
     -       25       20       -       -  
Capitalized interest
     5       7       -       -       -  
 
                              
Earnings available to cover fixed charges
   $ 3,649     $ 3,161     $ 2,337     $ 1,569     $ 1,377  
 
                              
Fixed charges (b):
                                        
Interest, including amortization of deferred financing costs
   $ 942     $ 880     $ 718     $ 816     $ 381  
Minority interest (pre-tax) in mandatorily redeemable preferred interest in a subsidiary
     6       6       14       23       25  
Minority interest (pre-tax) in mandatorily redeemable trust preferred securities
     -       -       -       14       106  
Interest portion of rental payment
     152       136       94       110       33  
 
                              
Total fixed charges
   $ 1,100     $ 1,022     $ 826       963     $ 545  
 
                              
Ratio of earnings to fixed charges
     3.32 x     3.09 x     2.83 x     1.63 x     2.53 x
 
                              
(a)  
Includes minority expense related to the Company’s venture with Marriott International, Inc. of $25 million and $20 million during 2003 and 2002, respectively.
 
(b)  
Consists of interest expense on all indebtedness (including amortization of deferred financing costs) and the portion of operating lease rental expense that is representative of the interest factor. Interest expense on all indebtedness is detailed as follows:
                                         
    Year Ended December 31,  
    2004     2003     2002     2001     2000  
Incurred by the Company’s PHH subsidiary
   $ 314     $ 264     $ 201     $ 258     $ 156  
Related to the Company’s stockholder litigation settlement liability
     -       -       -       131       63  
Related to the debt under management and mortgage programs incurred by the Company’s car rental subsidiary
     263       270       213       189       -  
All other
     365       346       304       238       162  
 
                              
 
   $ 942     $ 880     $ 718     $ 816     $ 381