Exhibit 12
Microsoft Corporation
Computation of Ratios of Earnings to Fixed Charges
(in millions, except ratios)
Fiscal Year Ended June 30, | |||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||
Earnings(a): | |||||||||||||||
Earnings from continuing operations before income taxes | $ | 20,363 | $ | 22,271 | $ | 18,438 | $ | 16,380 | $ | 14,576 | |||||
Add: Fixed charges | 108 | 151 | 271 | 331 | 247 | ||||||||||
Add: Cash distributions from equity method investments | 85 | 10 | – | 51 | 11 | ||||||||||
Subtract: Income from equity method investments | 81 | 62 | 62 | – | – | ||||||||||
Total Earnings | $ | 20,475 | $ | 22,370 | $ | 18,647 | $ | 16,762 | $ | 14,834 | |||||
Fixed Charges (b): | |||||||||||||||
Interest expense | $ | 38 | $ | 106 | $ | 230 | $ | 295 | $ | 209 | |||||
Capitalized debt issuances costs | 20 | – | – | – | – | ||||||||||
Interest component of rent expense | 50 | 45 | 41 | 36 | 38 | ||||||||||
Total Fixed Charges | $ | 108 | $ | 151 | $ | 271 | $ | 331 | $ | 247 | |||||
Ratio of Earnings to Fixed Charges | 190 | 148 | 69 | 51 | 60 |
(a) | Earnings represent earnings from continuing operations before income taxes and before income (losses) from equity method investments plus: (a) fixed charges; and (b) cash distributions from equity method investments. |
(b) | Fixed charges include: (a) interest expense; (b) capitalized debt issuance costs; and (c) the portion of operating rental expense which management believes is representative of the interest component of rent expense. |