Exhibit 12.1
Statement of Computation of Ratio of Earnings to Fixed Charges
(in millions, except ratios)
| Fiscal Year Ended | Six Months Ended | |||||||||||||||||||||||
| October 29, 2006 | October 28, 2007 | October 26, 2008 | October 25, 2009 | October 31, 2010 | May 1, 2011 | |||||||||||||||||||
| Earnings (loss) from continuing operations before taxes |
$ | 2,167 | $ | 2,440 | $ | 1,409 | $ | (486 | ) | $ | 1,387 | $ | 1,366 | |||||||||||
| Adjustments: |
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| Add fixed charges |
57 | 58 | 41 | 41 | 37 | 18 | ||||||||||||||||||
| Add amortization of capitalized interest |
2 | 2 | 2 | 2 | 2 | 1 | ||||||||||||||||||
| Add pre-tax loss of equity-method investment |
3 | 29 | 36 | 35 | — | — | ||||||||||||||||||
| Earnings (loss) before taxes and fixed charges |
$ | 2,229 | $ | 2,529 | $ | 1,488 | $ | (408 | ) | $ | 1,426 | $ | 1,385 | |||||||||||
| Fixed charges: |
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| Interest expense |
$ | 36 | $ | 39 | $ | 21 | $ | 21 | $ | 22 | $ | 10 | ||||||||||||
| Interest component of rental expense |
21 | 19 | 20 | 19 | 16 | 8 | ||||||||||||||||||
| Total fixed charges from continuing operations |
$ | 57 | $ | 58 | $ | 41 | $ | 40 | $ | 38 | $ | 18 | ||||||||||||
| Ratio of earnings to fixed charges (a) |
39.1x | 43.6x | 36.3x | (b | ) | 37.5x | 76.9x | |||||||||||||||||
| (a) | The ratio of earnings to fixed charges was computed by dividing earnings from continuing operations before taxes, amortization of capitalized interest and fixed charges by the fixed charges from continuing operations for the periods indicated. Fixed charges from continuing operations include (i) interest expense and capitalization and amortization of debt issuance costs and 30% of rental expense, which Applied considers to be a reasonable approximation of the interest factor included in rental expense. |
| (b) | Due to the loss in fiscal 2009, Applied’s ratio of earnings to fixed charges was less than 1:1. Applied would have needed to generate additional earnings of $448 million to achieve an earnings to fixed charges ratio of 1:1. |