EX-12 2 q113ex12.htm EXHIBIT Q1 13 Ex. 12


Exhibit 12

Statement of Computation of Ratio of Earnings to Fixed Charges
Omnicare, Inc. and Subsidiary Companies
(in thousands, except ratio)
 
 
For the three months ended March 31,
 
 
 
2013
 
2012
 
Income before income taxes (2)
 
$
88,688

 
$
93,996

 
Add fixed charges:
 
 

  
 

 
Interest expense
 
22,624

  
23,011

 
Amortization of discount on convertible notes (1)
 
6,069

  
6,350

 
Amortization of debt issuance expense
 
964

  
1,501

 
Interest expense-special items (2)
 
—

 
—

 
Interest portion of rent expense
 
4,279

 
4,644

 
Adjusted income
 
$
122,624

 
$
129,502

 
Fixed charges:
 
 

 
 

 
Interest expense
 
$
22,624

 
$
23,011

 
Amortization of discount on convertible notes (1)
 
6,069

 
6,350

 
Amortization of debt issuance expense
 
964

 
1,501

 
Interest expense-special items (2)
 
—

 
—

 
Interest portion of rent expense
 
4,279

 
4,644

 
Fixed charges
 
$
33,936

 
$
35,506

 
Ratio of earnings to fixed charges(3)
 
3.6

x
3.6

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 from applicable financial covenant coverage calculations.  The following listing of charges, which are included in the Company’s income from continuing operations before income taxes, includes certain of these excludable charges (in thousands):
 
 
For the three months ended March 31,
 
 
2013
 
2012
Settlement, litigation and other related charges (a)
 
$
22,619

 
$
7,203

Other charges (b)
 
4,006

 
11,512

Total - non-interest expense special items
 
$
26,625

 
$
18,715

Interest expense special items (c)
 
$
—

 
$
—

(a) See further discussion at the "Commitment and Contingencies" note of the Notes to the Consolidated Financial Statements.
(b) See further discussion at the "Other Charges" caption of the "Significant Accounting Policies" note of the Notes to the Consolidated Financial Statements.
(c) See the "Debt" note of the Notes to the Consolidated Financial Statements.
 

(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.