Exhibit 12

RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratios)

	2002			2003			2004			2005			2006
Income/(loss) before taxes and fixed charges (net of capitalized interest):
Income/(loss) from operations before income taxes	$	340,511		$	(211,556	)	$	1,829,250		$	1,581,569		$	2,166,971
Add fixed charges net of capitalized interest(1)		98,944			93,762			84,203			69,078			61,565
Total income/(loss) before taxes and fixed charges	$	439,455		$	(117,794	)	$	1,913,453		$	1,650,647		$	2,228,536
Fixed charges:
Interest expense	$	49,357		$	46,875		$	52,877		$	37,819		$	36,096
Capitalized interest		—			—			—			—			—
Interest component of rent expense(2)		46,542			44,751			29,190			29,123			23,470
Total fixed charges	$	95,899		$	91,626		$	82,067		$	66,942		$	59,566
Ratio of earnings/(loss) to fixed charges (3)		4.58	x		(1.29	)x		23.32	x		24.66	x		37.41	x

(1)	Capitalized interest includes interest capitalized during the period, less the amount of previously capitalized interest that was amortized during the period.
(2)	The interest factor is estimated at one-third of total rent expense for the applicable period, which management believes represents a reasonable approximation of the interest factor.
(3)	Due to Applied’s loss in fiscal 2003, the ratio of coverage was less than 1:1. Applied would have needed to generate additional earnings of $209 million to achieve the coverage ratio of 1:1.