Exhibit 12
Baxter International Inc. and Subsidiaries
Exhibit 12—Computation of Ratio of Earnings to Fixed Charges
(unaudited—in millions, except ratios)
Years ended December 31, | 2004 (B) | 2003 (B) | 2002 (B) | 2001 (B) | 2000 (B) | |||||||||||||||
Income from continuing operations before income taxes and cumulative effect of accounting changes | $ | 430 | $ | 1,129 | $ | 1,386 | $ | 962 | $ | 956 | ||||||||||
Fixed charges | ||||||||||||||||||||
Interest costs | 144 | 152 | 100 | 129 | 134 | |||||||||||||||
Estimated interest in rentals (A) | 50 | 51 | 46 | 36 | 32 | |||||||||||||||
Fixed charges as defined | 194 | 203 | 146 | 165 | 166 | |||||||||||||||
Adjustments to income | ||||||||||||||||||||
Interest costs capitalized | (18 | ) | (37 | ) | (30 | ) | (22 | ) | (14 | ) | ||||||||||
Net gains of less than majority-owned affiliates, net of dividends | (5 | ) | (23 | ) | (1 | ) | (1 | ) | (2 | ) | ||||||||||
Income as adjusted | $ | 601 | $ | 1,272 | $ | 1,501 | $ | 1,104 | $ | 1,106 | ||||||||||
Ratio of earnings to fixed charges | 3.10 | 6.27 | 10.28 | 6.69 | 6.66 |
(A) | Represents the estimated interest portion of rents. |
(B) | Excluding the following pre-tax special charges, the ratio of earnings to fixed charges was 7.98, 7.93, 11.58, 9.53 and 8.39 in 2004, 2003, 2002, 2001 and 2000, respectively. |
2004: | $543 million charge for restructuring, $289 million charge for impairments and $115 million for other special charges. |
2003: | $337 million charge for restructuring. |
2002: | $163 million charge for in-process research and development and $26 million charge for restructuring. |
2001: | $280 million charge for in-process research and development and other special charges and $189 million charge relating to discontinuing the A, AF and AX series dialyzers. |
2000: | $286 million charge for in-process research and development and other special charges. |