EX-12 3 ratio3-02.txt COMPUTATION OF RATIO EXHIBIT 12 ASHLAND INC. COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (In millions)
Six Months Ended Years Ended September 30 March 31 ------------------------------------------------------------- -------------------- 1997 1998 1999 2000 2001 2001 2002 ---------- ---------- ----------- ---------- ---------- ---------- -------- EARNINGS Income from continuing operations $ 169 $ 178 $ 291 $ 292 $ 406 $ 85 $ 17 Income taxes 125 114 193 191 275 57 10 Interest expense 148 133 141 189 160 84 68 Interest portion of rental expense 48 40 35 39 41 19 18 Amortization of deferred debt expense 1 1 1 2 2 1 1 Undistributed earnings of unconsolidated affiliates (6) (62) (11) (112) (90) (11) 58 Earnings of significant affiliates* 7 - - - - - - ---------- ---------- ----------- ---------- ---------- ---------- -------- $ 492 $ 404 $ 650 $ 601 $ 794 $ 235 $ 172 ========== ========== =========== ========== ========== ========== ======== FIXED CHARGES Interest expense $ 148 $ 133 $ 141 $ 189 $ 160 $ 84 $ 68 Interest portion of rental expense 48 40 35 39 41 19 18 Amortization of deferred debt expense 1 1 1 2 2 1 1 Capitalized interest 1 - - - - - - Fixed charges of significant affiliates* 5 - - - - - - ---------- ---------- ----------- ---------- ---------- ---------- -------- $ 203 $ 174 $ 177 $ 230 $ 203 $ 104 $ 87 ========== ========== =========== ========== ========== ========== ======== COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Preferred dividend requirements $ 9 $ - $ - $ - $ - $ - $ - Ratio of pretax to net income** 1.74 - - - - - - ---------- ---------- ----------- ---------- ---------- ---------- -------- Preferred dividends on a pretax basis 17 - - - - - - Fixed charges 203 174 177 230 203 104 87 ---------- ---------- ----------- ---------- ---------- ---------- -------- $ 220 $ 174 $ 177 $ 230 $ 203 $ 104 $ 87 ========== ========== =========== ========== ========== ========== ======== RATIO OF EARNINGS TO FIXED CHARGES 2.42 2.32 3.67 2.61 3.91 2.26 1.99 RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS 2.24 2.32 3.67 2.61 3.91 2.26 1.99
* 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.