EXHIBIT 12
Statement of Computation of Ratio of Earnings to Fixed Charges
Omnicare, Inc. and Subsidiary Companies
(in thousands, except ratio)
Unaudited
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| Three months ended |
| Nine months ended |
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| 2006 |
| 2005 |
| 2006 |
| 2005 |
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Income before Income Taxes(1) |
| $ | 84,582 |
| $ | 93,508 |
| $ | 215,478 |
| $ | 284,808 |
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Add fixed charges: |
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Interest expense(2) |
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| 41,330 |
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| 45,722 |
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| 122,844 |
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| 83,763 |
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Amortization of debt expense |
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| 2,038 |
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| 1,135 |
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| 6,005 |
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| 3,452 |
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Interest portion of rent expense |
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| 6,041 |
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| 5,091 |
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| 17,240 |
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| 13,594 |
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Adjusted income(1) (2) |
| $ | 133,991 |
| $ | 145,456 |
| $ | 361,567 |
| $ | 385,617 |
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Fixed charges: |
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Interest expense(2) |
| $ | 41,330 |
| $ | 45,722 |
| $ | 122,844 |
| $ | 83,763 |
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Amortization of debt expense |
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| 2,038 |
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| 1,135 |
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| 6,005 |
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| 3,452 |
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Interest portion of rent expense |
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| 6,041 |
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| 5,091 |
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| 17,240 |
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| 13,594 |
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Fixed charges(2) |
| $ | 49,409 |
| $ | 51,948 |
| $ | 146,089 |
| $ | 100,809 |
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Ratio of earnings to fixed charges(3) |
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| 2.7 | x |
| 2.8 | x |
| 2.5 | x |
| 3.8 | x |
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(1) | Includes the following pretax charges: |
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| Nine months ended |
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Restructuring and other related charges (a) |
| $ | 5,119 |
| $ | 8,950 |
| $ | 24,721 |
| $ | 8,950 |
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Litigation charges (b) |
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| 9,886 |
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| — |
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| 118,818 |
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| — |
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Heartland matters (b) |
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| 24,985 |
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| 24,985 |
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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. | |
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(b) | See the “Commitments and Contingencies” note of the Notes to the Consolidated Financial Statements. | |
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(2) | Includes the following pretax charges: |
Call premium and write-off of unamortized debt issuance costs (c) |
| $ | — |
| $ | 7,465 |
| $ | — |
| $ | 7,465 |
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(c) | See the “Debt” note of the Notes to the Consolidated Financial Statements. | |||||
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(3) | The ratio of earnings to fixed charges has been computed by adding income 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 expense) and one-third (the proportion deemed representative of the interest portion) of rent expense. |