Exhibit 12

McDONALD’S CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

Dollars in Millions

 

 

Nine Months
Ended September 30,

 

Years Ended December 31,

 

 

 

2006

 

2005

 

2005

 

2004

 

2003

 

2002

 

2001

 

Earnings available for fixed charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·  Income before provision for income taxes and cumulative effect of accounting changes

 

$

3,396.3

(1)

$

2,851.3

 

$

3,701.6

 

$

3,202.4

(2)

$

2,346.4

(3)

$

1,662.1

(4)

$

2,329.7

(5)

·  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

 

16.7

 

0.8

 

3.1

 

5.4

 

18.1

 

6.6

 

(15.4

)

·  Income tax provision (benefit) of 50% owned affiliates included in consolidated income before provision for income taxes

 

7.0

 

(3.0

)

(3.5

)

13.1

 

(28.6

)

(9.5

)

51.0

 

·  Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors*

 

267.6

 

256.0

 

338.8

 

310.2

 

289.6

 

266.7

 

252.5

 

·  Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest*

 

330.4

 

291.7

 

392.2

 

394.2

 

427.3

 

419.7

 

510.3

 

 

 

$

4,018.0

 

$

3,396.8

 

$

4,432.2

 

$

3,925.3

 

$

3,052.8

 

$

2,345.6

 

$

3,128.1

 

 

1




 

Fixed charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·  Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors*

 

$

267.6

 

$

256.0

 

$

338.8

 

$

310.2

 

$

289.6

 

$

266.7

 

$

252.5

 

·  Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock*

 

316.1

 

277.6

 

373.4

 

375.6

 

408.9

 

401.7

 

492.9

 

·  Capitalized interest*

 

3.7

 

3.7

 

5.0

 

4.1

 

7.9

 

14.4

 

15.4

 

 

 

$

587.4

 

$

537.3

 

$

717.2

 

$

689.9

 

$

706.4

 

$

682.8

 

$

760.8

 

Ratio of earnings to fixed charges

 

6.84

 

6.32

 

6.18

 

5.69

 

4.32

 

3.44

 

4.11

 

 


*                          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 Company’s lease accounting practices and policies as well as a $49.3 million gain relating to the sale of the Company’s interest in a U.S. real estate partnership.

(3)                   Includes pretax charges of $407.6 million primarily related to the disposition of certain non-McDonald’s 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 McDonald’s Japan.

 

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