EX-12 4 ratio.txt COMPUTATION OF RATIOS 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 ------------------------------------------------------------- -------------------- 1997 1998 1999 2000 2001 2001 2002 --------- --------- --------- --------- ---------- --------- --------- EARNINGS -------- Income from continuing operations $ 169 $ 178 $ 291 $ 292 $ 406 $ 281 $ 82 Income taxes 125 114 193 191 275 187 49 Interest expense 148 133 141 189 160 124 100 Interest portion of rental expense 48 40 35 39 41 29 27 Amortization of deferred debt expense 1 1 1 2 2 1 1 Undistributed earnings of unconsolidated affiliates (6) (62) (11) (112) (90) (83) (20) Earnings of significant affiliates* 7 - - - - - - -------- --------- --------- --------- --------- --------- -------- $ 492 $ 404 $ 650 $ 601 $ 794 $ 539 $ 239 ======== ========= ========= ========= ========= ========= ======== FIXED CHARGES ------------- Interest expense $ 148 $ 133 $ 141 $ 189 $ 160 $ 124 $ 100 Interest portion of rental expense 48 40 35 39 41 29 27 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 $ 154 $ 128 ======== ========= ========= ========= ========= ========= ======== 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 203 174 177 230 203 154 128 -------- --------- --------- --------- --------- --------- -------- $ 220 $ 174 $ 177 $ 230 $ 203 $ 154 $ 128 ======== ========= ========= ========= ========= ========= ======== RATIO OF EARNINGS TO FIXED CHARGES 2.42 2.32 3.67 2.61 3.91 3.51 1.86 RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS 2.24 2.32 3.67 2.61 3.91 3.51 1.86 * 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.