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Exhibit 12
McDONALD'S CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Dollars In Millions
| | Nine months ended September 30, | Years ended December 31, | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2003 | 2002 | 2002 | 2001 | 2000 | 1999 | 1998 | ||||||||||||||
| Earnings available for fixed charges | |||||||||||||||||||||
| -Income before provision for income taxes and cumulative effect of accounting changes | $ | 2,078.9 | $ | 1,983.7 | $ | 1,662.1(1) | $ | 2,329.7(2) | $ | 2,882.3 | $ | 2,884.1 | $ | 2,307.4(3) | |||||||
| -Minority interest expense (income) in operating results of majority-owned subsidiaries, including fixed charges related to redeemable preferred stock, less equity in undistributed operating results of less than 50%-owned affiliates | 7.5 | 3.3 | 6.6 | (15.4 | ) | 16.2 | 21.9 | 23.7 | |||||||||||||
| -Income tax provision (benefit) of 50%-owned affiliates included in consolidated income before provision for income taxes | (3.0 | ) | 6.1 | (9.5 | ) | 51.0 | 93.7 | 72.8 | 99.9 | ||||||||||||
| -Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | 214.8 | 195.5 | 266.7 | 252.5 | 207.0 | 178.5 | 161.3 | ||||||||||||||
| -Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest* | 327.6 | 315.2 | 419.7 | 510.3 | 470.3 | 440.1 | 461.9 | ||||||||||||||
| $ | 2,625.8 | $ | 2,503.8 | $ | 2,345.6 | $ | 3,128.1 | $ | 3,669.5 | $ | 3,597.4 | $ | 3,054.2 | ||||||||
Fixed charges | |||||||||||||||||||||
| -Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | $ | 214.8 | $ | 195.5 | $ | 266.7 | $ | 252.5 | $ | 207.0 | $ | 178.5 | $ | 161.3 | |||||||
| -Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock* | 313.8 | 301.8 | 401.7 | 492.9 | 457.9 | 431.3 | 453.4 | ||||||||||||||
| -Capitalized interest* | 6.5 | 10.7 | 14.4 | 15.4 | 16.5 | 14.7 | 18.3 | ||||||||||||||
| $ | 535.1 | $ | 508.0 | $ | 682.8 | $ | 760.8 | $ | 681.4 | $ | 624.5 | $ | 633.0 | ||||||||
| Ratio of earnings to fixed charges | 4.91 | 4.93 | 3.44 | 4.11 | 5.39 | 5.76 | 4.82 | ||||||||||||||
- *
- Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates.
- (1)
- Includes pretax operating charges of $853.2 million primarily related to restructuring markets and eliminating positions, restaurant closings/asset impairment and the write-off of technology costs.
- (2)
- Includes a net pretax expense of $252.9 million consisting of charges primarily related to the U.S. business reorganization and other global change initiatives and restaurant closings/asset impairment, partly offset by a gain on the initial public offering of McDonald's Japan.
- (3)
- Includes pretax operating charges of $321.6 million consisting of $161.6 million of Made For You costs and the $160.0 million charge related to the home office productivity initiative.
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McDONALD'S CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Dollars In Millions