Exhibit 12.1
Gilead Sciences, Inc.
Computation of Ratio of Earnings to Fixed Charges
(amount in thousands)
Nine Months Ended September 30, 2006 | Years Ended December 31, | |||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||
Computation of Earnings: | ||||||||||||||||||||||
Income (loss) before provision for (benefit from) income taxes, equity in loss of unconsolidated affiliate, minority interest in consolidated subsidiary and cumulative effect of change in accounting principle | $ | 881,576 | $ | 1,157,797 | $ | 656,422 | $ | (167,533 | ) | $ | 73,397 | $ | 57,447 | |||||||||
Capitalized interest | (395 | ) | — | (290 | ) | (101 | ) | (320 | ) | — | ||||||||||||
Fixed charges | 19,327 | 7,322 | 13,595 | 28,198 | 19,533 | 18,780 | ||||||||||||||||
Total Earnings | $ | 900,508 | $ | 1,165,119 | $ | 669,727 | $ | (139,436 | ) | $ | 92,610 | $ | 76,227 | |||||||||
Fixed Charges: | ||||||||||||||||||||||
Interest expense | $ | 15,012 | $ | 442 | $ | 7,345 | $ | 21,897 | $ | 13,853 | $ | 13,980 | ||||||||||
Capitalized interest | 395 | — | 290 | 101 | 320 | — | ||||||||||||||||
Estimated interest component of rent expense | 3,920 | 6,880 | 5,960 | 6,200 | 5,360 | 4,800 | ||||||||||||||||
Total Fixed Charges | $ | 19,327 | $ | 7,322 | $ | 13,595 | $ | 28,198 | $ | 19,533 | $ | 18,780 | ||||||||||
Ratio of earnings to fixed charges | 46.6 | 159.1 | 49.3 | (a) | 4.7 | 4.1 |
(a) | Earnings were approximately $139.4 million lower than the amount needed to cover fixed charges in this year, as earnings were impacted by a write-off of purchased in-process research and development of approximately $488.6 million related to the acquisition of net assets of Triangle Pharmaceuticals, Inc. |
For these ratios, “earnings” is computed by adding income before income taxes, equity in loss of unconsolidated affiliate, minority interest in consolidated subsidiary, cumulative effect of change in accounting principle and fixed charges, and subtracting capitalized interest. Fixed charges consist of interest expense, capitalized interest, amortized premiums, discounts and capitalized expenses related to indebtedness and estimated interest included in rental expense.