Exhibit 12
Statement of Computation of Ratio of Earnings to Fixed Charges
Omnicare, Inc. and Subsidiary Companies
(in thousands, except ratio)
For the years ended December 31, | |||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||
Income from continuing operations before income taxes | $ | 272,825 | (2) | $ | 33,508 | (2) | $ | 331,551 | (2) | $ | 217,055 | (2) | $ | 151,296 | (2) | ||||||
Add fixed charges: | |||||||||||||||||||||
Interest expense | 105,161 | 115,479 | 114,304 | 135,155 | 155,857 | ||||||||||||||||
Amortization of discount on convertible notes (1) | 24,195 | 29,536 | 27,977 | 25,934 | 24,041 | ||||||||||||||||
Amortization of debt issuance expense | 5,853 | 5,944 | 5,589 | 7,896 | 7,209 | ||||||||||||||||
Interest expense-special items | 25,491 | (2) | 14,297 | (2) | — | — | — | ||||||||||||||
Interest portion of rent expense | 18,852 | 20,926 | 23,049 | 25,157 | 23,794 | ||||||||||||||||
Adjusted income from continuing operations | $ | 452,377 | $ | 219,690 | $ | 502,470 | $ | 411,197 | $ | 362,197 | |||||||||||
Fixed charges: | |||||||||||||||||||||
Interest expense | $ | 105,161 | $ | 115,479 | $ | 114,304 | $ | 135,155 | $ | 155,857 | |||||||||||
Amortization of discount on convertible notes (1) | 24,195 | 29,536 | 27,977 | 25,934 | 24,041 | ||||||||||||||||
Amortization of debt issuance expense | 5,853 | 5,944 | 5,589 | 7,896 | 7,209 | ||||||||||||||||
Interest expense-special items | 25,491 | (2) | 14,297 | (2) | — | — | — | ||||||||||||||
Interest portion of rent expense | 18,852 | 20,926 | 23,049 | 25,157 | 23,794 | ||||||||||||||||
Fixed charges | $ | 179,552 | $ | 186,182 | $ | 170,919 | $ | 194,142 | $ | 210,901 | |||||||||||
Ratio of earnings to fixed charges(3) | 2.5 | x | 1.2 | x | 2.9 | x | 2.1 | x | 1.7 | x |
(1) | See the “Debt” note of the Notes to Consolidated Financial Statements. |
(2) | Certain of the Company’s debt agreements and indentures provide for the exclusion of various special charges/(credits) from applicable financial covenant coverage calculations. The following listing of charges/(credits), which are included in the Company’s income from continuing operations before income taxes, includes certain of these excludable charges/(credits) for the years ended December 31 (in thousands): |
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
Settlement, litigation and other related charges (a) | 55,674 | 113,709 | 77,449 | 99,267 | 42,516 | |||||||||||||||
Other expense (b)(d)(e)(f)(c)(g) | 16,093 | 192,125 | 25,707 | 40,534 | 42,309 | |||||||||||||||
Total - non-interest expense special items | $ | 71,767 | $ | 305,834 | $ | 103,156 | $ | 139,801 | $ | 84,825 | ||||||||||
Interest expense special items (e) | $ | 25,491 | $ | 14,297 | $ | — | $ | — | $ | — | ||||||||||
(a) See the "Commitments and Contingencies" note of the Notes to the Consolidated Financial Statements. | ||||||||||||||||||||
(b) See the "Restructuring and Other Related Charges" note of the Notes to Consolidated Financial Statements. | ||||||||||||||||||||
(c) See the "Goodwill and Other Intangible Assets" note of the Notes to the Consolidated Financial Statements. | ||||||||||||||||||||
(d) See the "Separation, Benefit Plan Termination and Related Costs" note of the Notes to the Consolidated Financial Statements. | ||||||||||||||||||||
(e) See the "Debt" note of the Notes to the Consolidated Financial Statements. | ||||||||||||||||||||
(f) See the "Acquisitions" note of the Notes to the Consolidated Financial Statements. | ||||||||||||||||||||
(g) See the "Stock-Based Compensation" note of the Notes to Consolidated Financial Statements. |
For the 2008 and 2007 years data, see the respective note in that years consolidated financial statements for additional information on the nature of the charge reflected above.
(3) | 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 from continuing operations, and dividing adjusted income from continuing operations 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. |