Exhibit 12
McDONALD’S CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Dollars in Millions
Three Months Ended March 31, | Years Ended December 31, | ||||||||||||||||||||||||||||
| 2006 | 2005 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||||
Earnings available for fixed charges | |||||||||||||||||||||||||||||
- Income before provision for income taxes and cumulative effect of accounting changes | $ | 905.8 | $ | 830.2 | $ | 3,701.6 | $ | 3,202.4 | (1) | $ | 2,346.4 | (2) | $ | 1,662.1 | (3) | $ | 2,329.7 | (4) | |||||||||||
- 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 | 3.7 | (2.5 | ) | 3.1 | 5.4 | 18.1 | 6.6 | (15.4 | ) | ||||||||||||||||||||
- Income tax provision (benefit) of 50% owned affiliates included in consolidated income before provision for income taxes | 1.3 | 4.9 | (3.5 | ) | 13.1 | (28.6 | ) | (9.5 | ) | 51.0 | |||||||||||||||||||
- Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | 87.8 | 86.3 | 338.8 | 310.2 | 289.6 | 266.7 | 252.5 | ||||||||||||||||||||||
- Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest* | 126.7 | 98.8 | 392.2 | 394.2 | 427.3 | 419.7 | 510.3 | ||||||||||||||||||||||
| $ | 1,125.3 | $ | 1,017.7 | $ | 4,432.2 | $ | 3,925.3 | $ | 3,052.8 | $ | 2,345.6 | $ | 3,128.1 | ||||||||||||||||
Fixed charges | |||||||||||||||||||||||||||||
- Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | $ | 87.8 | $ | 86.3 | $ | 338.8 | $ | 310.2 | $ | 289.6 | $ | 266.7 | $ | 252.5 | |||||||||||||||
- Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock* | 107.7 | 94.1 | 373.4 | 375.6 | 408.9 | 401.7 | 492.9 | ||||||||||||||||||||||
- Capitalized interest* | 1.2 | 1.0 | 5.0 | 4.1 | 7.9 | 14.4 | 15.4 | ||||||||||||||||||||||
| $ | 196.7 | $ | 181.4 | $ | 717.2 | $ | 689.9 | $ | 706.4 | $ | 682.8 | $ | 760.8 | ||||||||||||||||
Ratio of earnings to fixed charges | 5.72 | 5.61 | 6.18 | 5.69 | 4.32 | 3.44 | 4.11 | ||||||||||||||||||||||
| * | 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. |
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