EX-12 3 ex-12.htm EXHIBIT 12

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,

 

 

 

2005

 

2004

 

2003

 

2002

 

2001

 

 

 

Income before income taxes

 

$

361,806

 

$

375,199

 

$

310,449

 

$

203,051

 

$

119,785

 

Add fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

125,765

 

 

65,821

 

 

73,345

 

 

52,811

 

 

52,724

 

Amortization of debt expense

 

 

4,800

 

 

4,600

 

 

4,200

 

 

4,000

 

 

3,600

 

Interest expense-special items

 

 

35,045

 (1)

 

—

 

 

3,755

 (2)

 

—

 

 

—

 

Interest portion of rent expense

 

 

19,600

 

 

16,000

 

 

12,500

 

 

10,600

 

 

9,033

 

 

 

 

 

 

 

 

Adjusted income

 

$

547,016

 

$

461,620

 

$

404,249

 

$

270,462

 

$

185,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

125,765

 

$

65,821

 

$

73,345

 

$

52,811

 

$

52,724

 

Amortization of debt expense

 

 

4,800

 

 

4,600

 

 

4,200

 

 

4,000

 

 

3,600

 

Interest expense-special items

 

 

35,045

 (1)

 

—

 

 

3,755

 (2)

 

—

 

 

—

 

Interest portion of rent expense

 

 

19,600

 

 

16,000

 

 

12,500

 

 

10,600

 

 

9,033

 

 

 

 

 

 

 

 

Fixed charges

 

$

185,210

 

$

86,421

 

$

93,800

 

$

67,411

 

$

65,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of earnings to fixed charges(3)

 

 

3.0

 x

 

5.3

 x

 

4.3

 x

 

4.0

 x

 

2.8

 x

 

 

 

 

 

 

 

 

 

(1)

Interest expense includes a special charge of $32,502 before taxes in connection with the debt extinguishment and new debt issuance costs in connection with the financing arrangement undertaken to provide interim and final funding for the NeighborCare, Inc., RxCrossroads, L.L.C. and excelleRx, Inc. transactions, and the repurchase of approximately 98% of the 8.125% senior subordinated notes, due 2011. In addition to the aforementioned items, interest expense also includes a special charge of $2,543 before taxes in connection with estimated interest relating to the previously discussed vendor litigation settlements.

(2)

The year ended December 31, 2003 includes the write-off of unamortized debt issuance costs relating to the Company’s redemption of its 5.0% convertible subordinated debentures. See the “Debt” note of the Notes to Consolidated Financial Statements, located at Item 8 of this Filing, for further discussion.

(3)

The ratio of earnings to fixed charges has been computed by adding income before 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.