Nine Months Ended

September 30,

2017

2016

(Dollars in millions)

EARNINGS:

Income (loss) before income taxes1

$

(137)

$

103 

Add (deduct):

Equity in earnings of unconsolidated entities

(101)

(109)

Distributions from unconsolidated entities

85 

55 

Amortization of capitalized interest

6 

6 

$

(147)

$

55 

Add fixed charges:

Consolidated interest expense2

128 

127 

Interest portion (1/3) of consolidated rent expense

48 

46 

$

29 

$

228 

FIXED CHARGES:

Consolidated interest expense2

$

128 

$

127 

Capitalized interest

1 

2 

Interest portion (1/3) of consolidated rent expense

48 

46 

$

177 

$

175 

RATIO OF EARNINGS TO FIXED CHARGES3

* 

1.30 

1

Includes Loss on impairment of goodwill of $262 million in 2017.   Amount also includes $19 million and $16 million of Gain on license sales and exchanges, net in 2017 and 2016, respectively.

2

Interest expense on income tax contingencies is not included in fixed charges.

3

Ratio of earnings to fixed charges and preferred dividends was also 1.30 for the nine months ended 2016.

*

Earnings in 2017 were inadequate to cover Fixed charges by $148 million.