EX-12.1 3 dex121.htm STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Statement of Computation of Ratio of Earnings to Fixed Charges

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.