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, | |||||||||||||||||||||||||||
| 2005 | 2004 | 2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||||||
Earnings available for fixed charges | ||||||||||||||||||||||||||||
- Income before provision for income taxes and cumulative effect of accounting changes | $ | 2,851.3 | $ | 2,629.2 | $ | 3,202.4 | (1) | $ | 2,346.4 | (2) | $ | 1,662.1 | (3) | $ | 2,329.7 | (4) | $ | 2,882.3 | ||||||||||
- 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 | 0.8 | 6.3 | 5.4 | 18.1 | 6.6 | (15.4 | ) | 16.2 | ||||||||||||||||||||
- Income tax provision (benefit) of 50% owned affiliates included in consolidated income before provision for income taxes | (3.0 | ) | 9.0 | 13.1 | (28.6 | ) | (9.5 | ) | 51.0 | 93.7 | ||||||||||||||||||
- Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | 256.0 | 242.3 | 310.2 | 289.6 | 266.7 | 252.5 | 207.0 | |||||||||||||||||||||
- Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest* | 291.7 | 294.2 | 394.2 | 427.3 | 419.7 | 510.3 | 470.3 | |||||||||||||||||||||
| $ | 3,396.8 | $ | 3,181.0 | $ | 3,925.3 | $ | 3,052.8 | $ | 2,345.6 | $ | 3,128.1 | $ | 3,669.5 | |||||||||||||||
Fixed charges | ||||||||||||||||||||||||||||
- Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | $ | 256.0 | $ | 242.3 | $ | 310.2 | $ | 289.6 | $ | 266.7 | $ | 252.5 | $ | 207.0 | ||||||||||||||
- Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock* | 277.6 | 280.2 | 375.6 | 408.9 | 401.7 | 492.9 | 457.9 | |||||||||||||||||||||
- Capitalized interest* | 3.7 | 2.9 | 4.1 | 7.9 | 14.4 | 15.4 | 16.5 | |||||||||||||||||||||
| $ | 537.3 | $ | 525.4 | $ | 689.9 | $ | 706.4 | $ | 682.8 | $ | 760.8 | $ | 681.4 | |||||||||||||||
Ratio of earnings to fixed charges | 6.32 | 6.05 | 5.69 | 4.32 | 3.44 | 4.11 | 5.39 | |||||||||||||||||||||
| * | Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates. |
| (1) | Includes pretax charges of $241.1 million consisting of $130.5 million related to asset/goodwill impairment and $159.9 million related to the correction in the Company’s lease accounting practices and policies, as well as a $49.3 million gain relating to the sale of the Company’s interest in a U.S. real estate partnership. |
| (2) | Includes pretax charges of $407.6 million primarily related to the disposition of certain non-McDonald’s brands and asset/goodwill impairment. |
| (3) | Includes pretax charges of $853.2 million primarily related to restructuring markets and eliminating positions, restaurant closings/asset impairment and the write-off of technology costs. |
| (4) | Includes 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. |
31