EX-12 2 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Computation of Ratio of Earnings to Fixed Charges

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.