EXHIBIT 12
Baxter International Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(unaudited — in millions, except ratios)
(unaudited — in millions, except ratios)
years ended December 31, | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
Income from continuing operations before income taxes | $ | 1,890 | $ | 2,734 | $ | 2,462 | $ | 2,128 | $ | 1,760 | ||||||||||
Fixed charges | ||||||||||||||||||||
Interest costs(1) | 148 | 145 | 165 | 136 | 116 | |||||||||||||||
Estimated interest in rentals(2) | 61 | 57 | 54 | 52 | 49 | |||||||||||||||
Fixed charges as defined | 209 | 202 | 219 | 188 | 165 | |||||||||||||||
Adjustments to income | ||||||||||||||||||||
Interest costs capitalized | (33 | ) | (28 | ) | (17 | ) | (12 | ) | (15 | ) | ||||||||||
Net (gains) losses of less than majority-owned affiliates, net of dividends | (1 | ) | — | 1 | — | (2 | ) | |||||||||||||
Income as adjusted | $ | 2,065 | $ | 2,908 | $ | 2,665 | $ | 2,304 | $ | 1,908 | ||||||||||
Ratio of earnings to fixed charges(3) | 9.88 | 14.40 | 12.17 | 12.26 | 11.56 | |||||||||||||||
(1) | Excludes interest on uncertain tax positions. | |
(2) | Represents the estimated interest portion of rents. | |
(3) | Excluding the following pre-tax charges included in “Income from continuing operations,” the ratio of earnings to fixed charges was 15.05, 15.19, 12.97, 13.25 and 12.02 in 2010, 2009, 2008, 2007 and 2006, respectively. |
2010: | $588 million charge relating to infusion pumps, $257 million business optimization charge, $112 million impairment charge, $62 million litigation-related charge, $34 million of charges relating to acquired in-process research and development (IPR&D) and $28 million charge to write down accounts receivable in Greece. | |
2009: | $79 million business optimization charge, $27 million charge relating to infusion pumps and $54 million impairment charge. | |
2008: | $125 million charge relating to infusion pumps, $31 million impairment charge and $19 million of charges relating to IPR&D. | |
2007: | $70 million charge for restructuring, $56 million charge relating to litigation and $61 million of charges relating to IPR&D. | |
2006: | $76 million charge relating to infusion pumps. |