EX-12 5 comp.txt EXHIBIT 12 COMPUTATION OF EARNINGS EXHIBIT 12 ASHLAND INC. COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (In millions)
Nine Months Ended Years Ended September 30 June 30 ------------------------------------------------------------- ----------------------- 1996 1997 1998 1999 2000 2000 2001 ---------- ---------- ----------- ---------- ---------- ---------- ----------- EARNINGS Income from continuing operations $ 115 $ 169 $ 178 $ 291 $ 292 $ 281 $ 195 Income taxes 71 125 114 193 191 187 135 Interest expense 154 148 133 141 189 124 142 Interest portion of rental expense 44 48 40 35 39 29 29 Amortization of deferred debt expense 1 1 1 1 2 1 1 Undistributed earnings of unconsolidated affiliates (3) (6) (62) (11) (112) (83) (143) Earnings of significant affiliates* 7 7 - - - - - ---------- ---------- ----------- ---------- ---------- ---------- ----------- $ 389 $ 492 $ 404 $ 650 $ 601 $ 539 $ 359 ========== ========== =========== ========== ========== ========== =========== FIXED CHARGES Interest expense $ 154 $ 148 $ 133 $ 141 $ 189 $ 124 $ 142 Interest portion of rental expense 44 48 40 35 39 29 29 Amortization of deferred debt expense 1 1 1 1 2 1 1 Capitalized interest - 1 - - - - - Fixed charges of significant affiliates* 6 5 - - - - - ---------- ---------- ----------- ---------- ---------- ---------- ----------- $ 205 $ 203 $ 174 $ 177 $ 230 $ 154 $ 172 ========== ========== =========== ========== ========== ========== =========== COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Preferred dividend requirements $ 19 $ 9 $ - $ - $ - $ - $ - Ratio of pretax to net income** 1.61 1.74 - - - - - ---------- ---------- ----------- ---------- ---------- ---------- ----------- Preferred dividends on a pretax basis 30 17 - - - - - Fixed charges 205 203 174 177 230 154 172 ---------- ---------- ----------- ---------- ---------- ---------- ----------- $ 235 $ 220 $ 174 $ 177 $ 230 $ 154 $ 172 ========== ========== =========== ========== ========== ========== =========== RATIO OF EARNINGS TO FIXED CHARGES 1.90 2.42 2.32 3.67 2.61 3.51 2.08 RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS 1.66 2.24 2.32 3.67 2.61 3.51 2.08
* Significant affiliates are companies accounted for on the equity method that are 50% or greater owned or whose indebtedness has been directly or indirectly guaranteed by Ashland or its consolidated subsidiaries. ** Computed as income from continuing operations before income taxes divided by income from continuing operations, which adjusts dividends on preferred stock to a pretax basis.