Exhibit 12.1
McKESSON CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Nine Months Ended December 31, 2008 | For the Year Ended March 31, | |||||||||||||||||||||||
(Dollars in millions) | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
Earnings: | ||||||||||||||||||||||||
Income (Loss) from continuing operations before income taxes | $ | 667 | $ | 1,457 | $ | 1,297 | $ | 1,171 | $ | (266 | ) | $ | 869 | |||||||||||
Adjustment to exclude equity in net income of and dividends from equity investees | (6 | ) | (17 | ) | (17 | ) | (15 | ) | (4 | ) | (1 | ) | ||||||||||||
Fixed charges | 140 | 198 | 141 | 133 | 159 | 158 | ||||||||||||||||||
Amortization of capitalized interest | 3 | 4 | 3 | 2 | 1 | — | ||||||||||||||||||
Less: Interest Capitalized | (1 | ) | (3 | ) | (3 | ) | (4 | ) | (6 | ) | (4 | ) | ||||||||||||
Earnings as adjusted | $ | 803 | $ | 1,639 | $ | 1,421 | $ | 1,287 | $ | (116 | ) | $ | 1,022 | |||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest expense (a) | $ | 102 | $ | 142 | $ | 99 | $ | 94 | $ | 118 | $ | 120 | ||||||||||||
Capitalized interest | 1 | 3 | 3 | 4 | 6 | 4 | ||||||||||||||||||
Portion of rental expense representative of the interest factor (b) | 37 | 53 | 39 | 35 | 35 | 34 | ||||||||||||||||||
Total fixed charges | $ | 140 | $ | 198 | $ | 141 | $ | 133 | $ | 159 | $ | 158 | ||||||||||||
Ratio: | ||||||||||||||||||||||||
Ratio of earnings to fixed charges | 5.7 | 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.