EXHIBIT 12
Statement of Computation of Ratio of Earnings to Fixed Charges
Omnicare, Inc. and Subsidiary Companies
(in thousands, except ratios)
Unaudited
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| Three months ended |
| Nine months ended |
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| 2009 |
| 2008 |
| 2009 |
| 2008 |
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Income from continuing operations before income taxes |
| $ | 96,584 | (1) | $ | 85,886 | (1) | $ | 230,837 | (1) | $ | 184,982 | (1) |
Add fixed charges: |
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Interest expense, excluding amortization of disount on convertible notes (Note 6) |
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| 28,261 |
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| 34,885 |
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| 86,423 |
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| 103,786 |
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Amortization of discount on convertible notes (Note 6) |
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| 7,059 |
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| 6,544 |
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| 20,783 |
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| 19,265 |
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Amortization of debt issuance expense |
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| 1,327 |
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| 1,777 |
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| 4,227 |
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| 5,382 |
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Interest portion of rent expense |
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| 5,703 |
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| 6,217 |
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| 17,366 |
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| 18,707 |
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Adjusted income |
| $ | 138,934 |
| $ | 135,309 |
| $ | 359,636 |
| $ | 332,122 |
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Fixed charges: |
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Interest expense, excluding amortization of discount on convertible notes (Note 6) |
| $ | 28,261 |
| $ | 34,885 |
| $ | 86,423 |
| $ | 103,786 |
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Amortization of discount on convertible notes (Note 6) |
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| 7,059 |
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| 6,544 |
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| 20,783 |
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| 19,265 |
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Amortization of debt issuance expense |
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| 1,327 |
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| 1,777 |
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| 4,227 |
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| 5,382 |
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Interest portion of rent expense |
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| 5,703 |
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| 6,217 |
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| 17,366 |
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| 18,707 |
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Fixed charges |
| $ | 42,350 |
| $ | 49,423 |
| $ | 128,799 |
| $ | 147,140 |
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Ratio of earnings to fixed charges(2) |
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| 3.3 | x |
| 2.7 | x |
| 2.8 | x |
| 2.3 | x |
(1) Income from continuing operations before income taxes includes certain special items and accounting change impacts (pretax), (which are further discussed in the Management’s Discussion and Analysis at Part I, Item 2 of this Filing):
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| Three months ended |
| Nine months ended |
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| 2009 |
| 2008 |
| 2009 |
| 2008 |
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Restructuring and other related charges (a) |
| $ | 6,295 |
| $ | 7,655 |
| $ | 19,095 |
| $ | 24,887 |
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Litigation and other related professional fees (b) |
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| 1,739 |
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| 13,479 |
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| 71,761 |
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| 51,143 |
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Heartland repack matters (b) |
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| 2,032 |
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| 1,170 |
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| 5,221 |
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| 4,803 |
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Acquisition and other related costs (c) |
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| (632 | ) |
| - |
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| 2,218 |
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| - |
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(a) See the “Restructuring and Other Related Charges” note of the Notes to the Consolidated Financial Statements.
(b) See the “Commitments and Contingencies” note of the Notes to the Consolidated Financial Statements.
(c) See the “Acquisitions” note of the Notes to the Consolidated Financial Statements.
(2) The ratio of earnings to fixed charges has been computed by adding income from continuing operations before income taxes and fixed charges to derive adjusted income, and dividing adjusted income by fixed charges. Fixed charges consist of interest expense on debt (including the amortization of debt issuance expense) and one-third (the proportion deemed representative of the interest portion) of rent expense.
(3) Effective January 1, 2009, Omnicare adopted the provisions of the authoritative guidance for accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement). Financial statements for 2008 and prior periods have been restated for this change in accounting.
(4) As discussed elsewhere herein, during the second quarter of 2009, the Company commenced activities to divest certain non-core businesses within its Pharmacy Services segment. The financial results have been revised to reflect such businesses as discontinued operations.
E-3
