EX-12 7 c58365_ex12.htm

EXHIBIT 12

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

 

 

 

 

2009

 

2008
as adjusted
(3)(4)

 

2009

 

2008
as adjusted
(3)(4)

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

$

72,411

  (1)

$

53,103

  (1)

$

134,253

  (1)

$

99,096

  (1)

Add fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, excluding amortization of discount on convertible notes

 

 

28,699

 

 

33,891

 

 

58,162

 

 

68,901

 

Amortization of discount on convertible notes (5)

 

 

6,927

 

 

6,421

 

 

13,724

 

 

12,721

 

Amortization of debt expense

 

 

1,076

 

 

1,802

 

 

2,900

 

 

3,605

 

Interest portion of rent expense

 

 

5,195

 

 

6,374

 

 

11,663

 

 

12,490

 

 

 

 

 

 

 

Adjusted income

 

$

114,308

 

$

101,591

 

$

220,702

 

$

196,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, excluding amortization of discount on convertible notes

 

$

28,699

 

$

33,891

 

$

58,162

 

$

68,901

 

Amortization of discount on convertible notes (5)

 

 

6,927

 

 

6,421

 

 

13,724

 

 

12,721

 

Amortization of debt expense

 

 

1,076

 

 

1,802

 

 

2,900

 

 

3,605

 

Interest portion of rent expense

 

 

5,195

 

 

6,374

 

 

11,663

 

 

12,490

 

 

 

 

 

 

 

Fixed charges

 

$

41,897

 

$

48,488

 

$

86,449

 

$

97,717

 

 

 

 

 

 

 

Ratio of earnings to fixed charges(2)

 

 

2.7

  x

 

2.1

  x

 

2.6

  x

 

2.0

  x

 

 

 

 

 

 

(1) Income from continuing operations before income taxes includes certain special items and accounting change impacts (pretax), including the following (as further discussed in the Management’s Discussion and Analysis at Part I, Item 2 of this Filing):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

 

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

Restructuring and other related charges (a)

 

$

5,883

 

$

10,784

 

$

12,800

 

$

17,232

 

Litigation and other related professional fees (b)

 

 

28,357

 

 

16,022

 

 

70,022

 

 

37,664

 

Heartland repack matters (b)

 

 

1,196

 

 

1,740

 

 

3,189

 

 

3,633

 

Acquisition and other related costs (c)

 

 

2,011

 

 

—

 

 

2,850

 

 

—

 

 

 

(a)

See the “Restructuring and Other Related Charges” note of the Notes to the Consolidated Financial Statements at Part I, Item 1 of this filing.

 

 

(b)

See the “Commitments and Contingencies” note of the Notes to the Consolidated Financial Statements at Part I, Item 1 of this filing.

 

 

(c)

See the “Acquisitions” note of the Notes to the Consolidated Financial Statements at Part I, Item 1 of this filing.

(2) 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.

(3) Effective January 1, 2009, Omnicare adopted the provisions of Financial Accounting Standards Board Staff Position No. APB14-1, “Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”. Financial statements for 2008 and prior periods have been restated for this change in accounting.

(4) As discussed elsewhere herein, during the second quarter of 2009, the Company commenced activities to divest certain non-core businesses within its pharmacy services segment. The financial results have been revised to reflect such businesses as discontinued operations.

(5) See the “Debt” note of the Notes to Consolidated Financial Statements at Part I, Item 1 of this filing.