Exhibit 12
McDONALDS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Dollars in Millions
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Nine Months |
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Years Ended December 31, |
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2006 |
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2005 |
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2005 |
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2004 |
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2003 |
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2002 |
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2001 |
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Earnings available for fixed charges |
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· Income before provision for income taxes and cumulative effect of accounting changes |
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$ |
3,396.3 |
(1) |
$ |
2,851.3 |
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$ |
3,701.6 |
|
$ |
3,202.4 |
(2) |
$ |
2,346.4 |
(3) |
$ |
1,662.1 |
(4) |
$ |
2,329.7 |
(5) |
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· Minority interest expense (income) in operating results of majority-owned subsidiaries, including fixed charges related to redeemable preferred stock, less equity in undistributed operating results of less than 50%-owned affiliates |
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16.7 |
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0.8 |
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3.1 |
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5.4 |
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18.1 |
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6.6 |
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(15.4 |
) |
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· Income tax provision (benefit) of 50% owned affiliates included in consolidated income before provision for income taxes |
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7.0 |
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(3.0 |
) |
(3.5 |
) |
13.1 |
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(28.6 |
) |
(9.5 |
) |
51.0 |
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· Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* |
|
267.6 |
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256.0 |
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338.8 |
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310.2 |
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289.6 |
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266.7 |
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252.5 |
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· Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest* |
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330.4 |
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291.7 |
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392.2 |
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394.2 |
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427.3 |
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419.7 |
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510.3 |
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$ |
4,018.0 |
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$ |
3,396.8 |
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$ |
4,432.2 |
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$ |
3,925.3 |
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$ |
3,052.8 |
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$ |
2,345.6 |
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$ |
3,128.1 |
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1
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Fixed charges |
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· Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* |
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$ |
267.6 |
|
$ |
256.0 |
|
$ |
338.8 |
|
$ |
310.2 |
|
$ |
289.6 |
|
$ |
266.7 |
|
$ |
252.5 |
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· Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock* |
|
316.1 |
|
277.6 |
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373.4 |
|
375.6 |
|
408.9 |
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401.7 |
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492.9 |
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· Capitalized interest* |
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3.7 |
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3.7 |
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5.0 |
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4.1 |
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7.9 |
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14.4 |
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15.4 |
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$ |
587.4 |
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$ |
537.3 |
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$ |
717.2 |
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$ |
689.9 |
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$ |
706.4 |
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$ |
682.8 |
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$ |
760.8 |
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Ratio of earnings to fixed charges |
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6.84 |
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6.32 |
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6.18 |
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5.69 |
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4.32 |
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3.44 |
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4.11 |
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* Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates.
(1) Includes a pretax gain of $248.6 million due to the IPO and secondary sales of Chipotle shares as well as pretax charges of $125.5 million related to impairment and other charges.
(2) Includes pretax charges of $241.1 million consisting of $130.5 million related to asset/goodwill impairment and $159.9 million related to the correction in the Companys lease accounting practices and policies as well as a $49.3 million gain relating to the sale of the Companys interest in a U.S. real estate partnership.
(3) Includes pretax charges of $407.6 million primarily related to the disposition of certain non-McDonalds brands and asset/goodwill impairment.
(4) Includes pretax charges of $853.2 million primarily related to restructuring markets and eliminating positions, restaurant closings/asset impairment and the write-off of technology costs.
(5) Includes net pretax expense of $252.9 million consisting of charges primarily related to the U.S. business reorganization and other global change initiatives and restaurant closings/asset impairment, partly offset by a gain on the initial public offering of McDonalds Japan.
2