EX-12 2 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 ratios)
 
Unaudited
 
                         
   
Three months ended,
   
Six months ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Income from continuing operations before income taxes
  $ 63,684  (1)   $ 39,624  (1)   $ 141,663  (1)   $ 130,709  (1)
Add fixed charges:
                               
Interest expense
    26,593       26,871       52,901       54,238  
Amortization of discount on convertible notes (3)
    5,989       7,473       11,862       14,804  
Amortization of debt issuance expense
    1,403       3,457       2,821       4,698  
Interest expense-special items
    -       9,384       1,079       9,384  
Interest portion of rent expense
    4,786       5,103       10,155       10,434  
Adjusted income
  $ 102,455     $ 91,912     $ 220,481     $ 224,267  
Fixed charges:
                               
Interest expense
  $ 26,593     $ 26,871     $ 52,901     $ 54,238  
Amortization of discount on convertible notes (3)
    5,989       7,473       11,862       14,804  
Amortization of debt issuance expense
    1,403       3,457       2,821       4,698  
Interest expense-special items
    -       9,384       1,079       9,384  
Interest portion of rent expense
    4,786       5,103       10,155       10,434  
Fixed charges
  $ 38,771     $ 52,288     $ 78,818     $ 93,558  
Ratio of earnings to fixed charges(2)
    2.6  x     1.8  x     2.8  x     2.4  x

(1)           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:


   
Three months ended,
   
Six months ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Settlements, litigation and other related charges (a)
    19,816       29,361       25,829       34,867  
Other miscellaneous charges (b)
    2,332       5,751       4,221       11,959  
Total - non-interest expense special items
  $ 22,148     $ 35,112     $ 30,050     $ 46,826  
                                 
Interest expense special items (c)
  $ -     $ 9,384     $ 1,079     $ 9,384  
                                 
(a) See the "Commitments and Contingencies" note of the Notes to the Consolidated Financial Statements.
         
(b) See further discussion at the “Other Miscellaneous Charges” caption of the “Significant Accounting Policies” note of the Notes to Consolidated Financial Statements.
 
(c) See the "Debt" note of the Notes to the Consolidated Financial Statements.
                         

(2)           The ratio of earnings to fixed charges has been computed by adding income from continuing operations 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 issuance expense) and one-third (the proportion deemed representative of the interest portion) of rent expense.
(3)           See the “Debt” note of the Notes to Consolidated Financial Statements.