Exhibit 12.1
BAKER HUGHES INCORPORATED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Millions, Except Ratios)
Three Months Ended March 31, | Year Ended December 31, | |||||||||||||||||||||||||||
2009 | 2008 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||||
Earnings | ||||||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||
Pre-tax income from continuing operations before adjustments for equity investees | $ | 284 | $ | 569 | $ | 2,317 | $ | 2,256 | $ | 1,933 | $ | 1,179 | $ | 740 | ||||||||||||||
Fixed charges | 57 | 33 | 172 | 131 | 124 | 118 | 125 | |||||||||||||||||||||
Amortization of capitalized interest | — | — | 1 | 1 | — | — | — | |||||||||||||||||||||
Distributed income of equity investees | — | — | — | — | 60 | 30 | — | |||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||
Capitalized interest | 3 | 2 | 7 | 5 | 1 | — | — | |||||||||||||||||||||
Total earnings | $ | 338 | $ | 600 | $ | 2,483 | $ | 2,383 | $ | 2,116 | (a) | $ | 1,327 | $ | 865 | |||||||||||||
Fixed Charges | ||||||||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||
Interest expense | $ | 35 | $ | 15 | $ | 89 | $ | 66 | $ | 69 | $ | 72 | $ | 84 | ||||||||||||||
Interest portion of rental expense | 19 | 16 | 76 | 60 | 54 | 46 | 41 | |||||||||||||||||||||
Capitalized interest | 3 | 2 | 7 | 5 | 1 | — | — | |||||||||||||||||||||
Total fixed charges | $ | 57 | $ | 33 | $ | 172 | $ | 131 | $ | 124 | $ | 118 | $ | 125 | ||||||||||||||
Ratio of earnings to fixed charges | 5.9 | 18.2 | 14.4 | 18.2 | 17.1 | 11.2 | 6.9 | |||||||||||||||||||||
(a) | The earnings calculation does not include a $1.7 billion gain recorded in April 2006 from the sale of WesternGeco, Baker Hughes’ equity method investment in which we owned a 30% interest. |