EX-12 9 exhibit12.htm EXHIBIT 12 exhibit12.htm
Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges
Omnicare, Inc. and Subsidiary Companies
(in thousands, except ratio)

   
For the years ended December 31,
  
   
2010
        
2009
        
2008
        
2007
        
2006
      
Income from continuing operations before income taxes
   $ (73,991 ) (2 )   $ 332,339   (2 )   $ 241,796   (2 )   $ 167,107   (2 )   $ 296,051   (2 )
Add fixed charges:
                                                            
Interest expense
     115,481           114,307           135,177           155,864           161,890      
Amortization of discount on convertible notes (1)
     29,536           27,977           25,934           24,041           22,286      
Amortization of debt issuance expense
     5,944           5,589           7,896           7,209           7,278      
Interest expense-special items
     14,297   (2 )     -           -           -           -      
Interest portion of rent expense
     20,926           23,049           25,157           23,794           22,459      
Adjusted income from continuing operations
   $ 112,193         $ 503,261         $ 435,960         $ 378,015         $ 509,964      
                                                             
Fixed charges:
                                                            
Interest expense
   $ 115,481         $ 114,307         $ 135,177         $ 155,864         $ 161,890      
Amortization of discount on convertible notes (1)
     29,536           27,977           25,934           24,041           22,286      
Amortization of debt issuance expense
     5,944           5,589           7,896           7,209           7,278      
Interest expense-special items
     14,297   (2 )     -           -           -           -      
Interest portion of rent expense
     20,926           23,049           25,157           23,794           22,459      
Fixed charges
   $ 186,184         $ 170,922         $ 194,164         $ 210,908         $ 213,913      
                                                             
Ratio of earnings to fixed charges(3)
     -  x         2.9  x         2.2  x         1.8  x         2.4  x    

(1)  
See the “Debt” note of the Notes to Consolidated Financial Statements.
(2)  
Certain of the Company’s debt agreements and indentures provide for the exclusion of various special charges/(credits) from applicable financial covenant coverage calculations.  The following listing of charges/(credits), which are included in the Company’s income from continuing operations before income taxes, includes certain of these excludable charges/(credits) for the years ended December 31 (in thousands):

   
2010
    
2009
    
2008
    
2007
    
2006
  
Restructuring and other related charges (a)
   $ 27,927     $ 29,155     $ 35,784     $ 27,883     $ 29,562  
Settlement, litigation and other related charges (b)
     113,709       77,449       99,267       42,516       125,128  
Goodwill and other asset impairment charges (c)
     113,512       -       -       -       -  
Separation, benefit plan termination and related costs (d)
     64,760                                  
Other expense (b)(e)(f)(g)(a)
     87,316       5,893       6,445       17,193       39,858  
Total - non-interest expense special items
   $ 407,224     $ 112,497     $ 141,496     $ 87,592     $ 194,548  
                                         
Interest expense special items (d)
   $ 14,297     $ -     $ -     $ -     $ -  
                                         
(a) See the "Restructuring and Other Related Charges" note of the Notes to Consolidated Financial Statements.
  
(b) See the "Commitments and Contingencies" note of the Notes to the Consolidated Financial Statements.
  
(c) See the "Goodwill and Other Intangible Assets" note of the Notes to the Consolidated Financial Statements.
  
(d) See the "Separation, Benefit Plan Termination and Related Costs" note of the Notes to the Consolidated Financial Statements.
  
(e) See the "Debt" note of the Notes to the Consolidated Financial Statements.
  
(f) See the "Acquisitions" note of the Notes to the Consolidated Financial Statements.
  
(g) See the "Stock-Based Compensation" note of the Notes to Consolidated Financial Statements.
 
  
 
For the 2007 and 2006 years data, see the respective note in that years consolidated financial statements for additional information on the nature of the charge reflected above.
 
(3)  
The ratio of earnings to fixed charges has been computed by adding income before income taxes and fixed charges to derive adjusted income, and dividing adjusted income by fixed charges.  Fixed charges consist of interest expense on debt (including the amortization of debt expense) and one-third (the proportion deemed representative of the interest portion) of rent expense.  Due to the registrant’s loss (including the charges/(credits) above) in the year ended December 31, 2010, the ratio coverage was less than 1:1.  The registrant would have needed to generate additional earnings of $73,991 to achieve a coverage of 1:1 in the year ended December 31, 2010.