EX-12.01 4 ratioearningstofixedcharges.htm RATIO OF EARNINGS TO FIXED CHARGES Ratio of Earnings to Fixed Charges


EXHIBIT 12.01

EASTMAN CHEMICAL COMPANY AND SUBSIDIARIES
 
Computation of Ratios of Earnings to Fixed Charges
 
   
 
Third Quarter
First Nine Months
(Dollars in millions)
  
2004
  
2003
  
2004
  
2003
                 
Earnings before income taxes and cumulative effect of
               
changes in accounting principles
$
48
$
(471)
$
45
$
(393)
Add:
                
Interest expense
  
30
  
31
  
92
  
96
Appropriate portion of rental expense (1)
  
3
  
0
  
11
  
13
Amortization of capitalized interest
  
3
  
3
  
11
  
9
Earnings as adjusted
$
84
$
(437)
$
159
$
(275)
                 
Fixed charges:
                
Interest expense
$
30
$
31
$
92
$
96
Appropriate portion of rental expense (1)
  
3
  
0
  
11
  
13
Capitalized interest
  
1
  
1
  
3
  
3
Total fixed charges
$
34
$
32
$
106
$
112
                 
Ratio of earnings to fixed charges
  
2.5x
  
(A)
  
1.5x
  
(A)
                 
(1)   For all periods presented, the interest component of rental expense is estimated to equal one-third of such expense.
 
(A)   Due to the net loss reported, the coverage ratio was less than 1x. To achieve a coverage ratio of 1x, additional pre-tax earnings of $469 million and $387 million would have been required for the third quarter and first nine months 2004, respectively.
 

 
 
 
 
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