COMPAQ COMPUTER CORP, 8-K, EX-12.1, 2000-08-04

Exhibit 12.1

Compaq Computer Corp.
Ratio of Earnings to Fixed Charges
(in millions, except ratios)


		Three months		Six months
		Ended		Ended				Year Ended
		June 30,		June 30,											December 31,
		2000		2000		1999					1998					1997		1996		1995

Fixed Charges




	Interest expensed and capitalized		73		130		148					167					171		114		101




	Interest element of rentals		30		61		93					68					45		42		41




	Preferred dividends of a consolidated subsidiary(1)		—		—		15					19					—		—		—

Total Fixed Charges			103		191		256					254					216		156		142




Earnings




	Income (loss) before provision for income taxes		569		1,047		934					(2,662	)				2,758		1,883		1,326




	Loss from equity investees		17		46		52					—					—		—		—




	Fixed charges less interest capitalized		103		191		256					253					213		148		135




	Amortization of interest capitalized		—		1		3					2					2		1		—

Total Earnings			689		1,285		1,245					(2,407	)				2,973		2,032		1,461
















Ratio of Earnings to Fixed Charges			6.7		6.7		4.9		(2	)		N/A		(3	)		13.8		13.0		10.3

(1)		Represents preferred stock acquired in 1998 in connection with the acquisition of Digital Equipment Corporation (“Digital”). The preferred stock was redeemed in April 1999.




(2)		Excluding the $1.2 billion gain on sale of businesses and the $868 million charge for restructuring and related charges, the ratio of earnings to fixed charges was 3.6.




(3)		Earnings were inadequate to cover fixed charges in 1998 by approximately $2.7 billion. Excluding the $3.2 billion charge associated with purchased in-process technology related to the acquisition of Digital and the $393 million charge for restructuring and related charges, the ratio of earnings to fixed charges was 4.7.