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, | |||||||||||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||||
Earnings available for fixed charges | ||||||||||||||||||||||||||||||
- Income from continuing operations before provision for income taxes and cumulative effect of accounting changes | $ | 2,287.8 | (1) | $ | 3,114.2 | (2) | $ | 4,154.4 | (3) | $ | 3,660.2 | $ | 3,217.0 | (4) | $ | 2,349.4 | (5) | $ | 1,665.8 | (6) | ||||||||||
- Minority interest expense 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 | 6.1 | 4.1 | 5.5 | 1.2 | 4.4 | 18.6 | 8.2 | |||||||||||||||||||||||
- Income tax provision (benefit) of 50% owned affiliates included in income from continuing operations before provision for income taxes | 21.9 | 7.0 | 5.9 | (3.5 | ) | 13.1 | (28.6 | ) | (9.5 | ) | ||||||||||||||||||||
- Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | 230.2 | 230.7 | 304.0 | 292.8 | 272.2 | 257.6 | 236.3 | |||||||||||||||||||||||
- Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest* | 323.4 | 330.1 | 437.4 | 392.2 | 394.2 | 427.2 | 419.7 | |||||||||||||||||||||||
| $ | 2,869.4 | $ | 3,686.1 | $ | 4,907.2 | $ | 4,342.9 | $ | 3,900.9 | $ | 3,024.2 | $ | 2,320.5 | |||||||||||||||||
Fixed charges | ||||||||||||||||||||||||||||||
- Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* | $ | 230.2 | $ | 230.7 | $ | 304.0 | $ | 292.8 | $ | 272.2 | $ | 257.6 | $ | 236.3 | ||||||||||||||||
-Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock* | 309.1 | 315.8 | 418.4 | 373.4 | 375.6 | 408.7 | 401.7 | |||||||||||||||||||||||
-Capitalized interest* | 3.8 | 3.7 | 5.5 | 5.0 | 4.1 | 7.9 | 14.4 | |||||||||||||||||||||||
| $ | 543.1 | $ | 550.2 | $ | 727.9 | $ | 671.2 | $ | 651.9 | $ | 674.2 | $ | 652.4 | |||||||||||||||||
Ratio of earnings to fixed charges | 5.28 | 6.70 | 6.74 | 6.47 | 5.98 | 4.49 | 3.56 | |||||||||||||||||||||||
| * | Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates. The Company records interest expense on income tax contingencies in the provision for income taxes. This interest is not included in the computation of fixed charges. |
| (1) | Includes pretax charges of $1.7 billion primarily related to impairment in connection with the Company’s sale of Latam to a developmental licensee. |
| (2) | Includes pretax charges of $125.5 million primarily related to impairment. |
| (3) | Includes pretax charges of $134.2 million primarily related to impairment. |
| (4) | Includes pretax charges of $232.1 million consisting of $130.5 million related to impairment and $150.9 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. |
| (5) | Includes pretax charges of $407.6 million primarily related to the disposition of certain non-McDonald’s brands and impairment. |
| (6) | 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. |