EXHIBIT 12
McKESSON CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Years Ended March 31, | |||||||||||||||||||||
(Dollars in millions) | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Earnings: | |||||||||||||||||||||
Income (Loss) from continuing operations before income taxes | $ | 1,457 | $ | 1,297 | $ | 1,171 | $ | (266 | ) | $ | 869 | ||||||||||
Adjustment to exclude equity in net income of and dividends from equity investees | (17 | ) | (17 | ) | (15 | ) | (4 | ) | (1 | ) | |||||||||||
Fixed charges | 198 | 141 | 133 | 159 | 158 | ||||||||||||||||
Amortization of capitalized interest | 4 | 3 | 2 | 1 | — | ||||||||||||||||
Less: Interest Capitalized | (3 | ) | (3 | ) | (4 | ) | (6 | ) | (4 | ) | |||||||||||
Earnings as adjusted | $ | 1,639 | $ | 1,421 | $ | 1,287 | $ | (116 | ) | $ | 1,022 | ||||||||||
Fixed charges: | |||||||||||||||||||||
Interest expense (a) | $ | 142 | $ | 99 | $ | 94 | $ | 118 | $ | 120 | |||||||||||
Capitalized interest | 3 | 3 | 4 | 6 | 4 | ||||||||||||||||
Portion of rental expense representative of the interest factor (b) | 53 | 39 | 35 | 35 | 34 | ||||||||||||||||
Total fixed charges | $ | 198 | $ | 141 | $ | 133 | $ | 159 | $ | 158 | |||||||||||
Ratio: | |||||||||||||||||||||
Ratio of earnings to fixed charges | 8.3 | 10.1 | 9.7 | (d | ) | 6.5 | |||||||||||||||
(a) | Interest expense includes amortization of debt discounts and deferred loan costs. | |
(b) | One-third of net rent expense is the portion of rental expense deemed representative of the interest factor. | |
(c) | Interest accrued on uncertain tax positions as a result of the implementation of FIN 48 is excluded from Interest expense in the computation of Fixed charges. | |
(d) | Earnings for the year ended March 31, 2005 were inadequate to cover fixed charges. The coverage deficiency was $276 million for the ratio of earnings to fixed charges. |