Merck & Co., Inc. - FORM 10-Q - EX-12 - October 29, 2009

Attached files

file filename
10-Q - FORM 10-Q - Merck & Co., Inc.y79731e10vq.htm
EX-15 - EX-15 - Merck & Co., Inc.y79731exv15.htm
EX-32.2 - EX-32.2 - Merck & Co., Inc.y79731exv32w2.htm
EX-32.1 - EX-32.1 - Merck & Co., Inc.y79731exv32w1.htm
EX-31.2 - EX-31.2 - Merck & Co., Inc.y79731exv31w2.htm
EX-31.1 - EX-31.1 - Merck & Co., Inc.y79731exv31w1.htm
Exhibit 12
 
SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 
                                                 
    Nine Months
 		                               
    Ended
 		                               
    September 30,
 		    Years Ended December 31,  
    2009     2008(1)     2007(1)     2006     2005     2004  
    (Dollars in millions)  
 
Income/(Loss) Before Income Taxes
  $ 2,319     $ 2,049     $ (1,215 )   $ 1,483     $ 497     $ (168 )
Less: Equity Income
    1,157       1,870       2,049       1,459       873       347  
                                                 
Income/(Loss) Before Income Taxes and Equity Income
    1,162       179       (3,264 )     24       (376 )     (515 )
Add Fixed Charges:
                                               
Preferred Stock Dividends
    113       150       118       86       86       34  
Interest Expense
    332       536       245       172       163       168  
One-third of Rental Expense
    60       86       52       39       37       30  
Capitalized Interest
    16       19       18       13       14       20  
                                                 
Total Fixed Charges
    521       791       433       310       300       252  
Less: Capitalized Interest
    16       19       18       13       14       20  
Less: Preferred Stock Dividends
    113       150       118       86       86       34  
Add: Amortization of Capitalized Interest
    8       12       15       10       10       9  
Add: Distributed Income of Equity Investees
    1,073       1,782       1,787       1,332       647       228  
                                                 
Earnings/(Loss) Before Income Taxes and Fixed Charges (other than Capitalized Interest)
  $ 2,635     $ 2,595     $ (1,165 )   $ 1,577     $ 481     $ (80 )
                                                 
Ratio of Earnings to Fixed Charges
    5.1       3.3       (2.7 )*     5.1       1.6       (0.3 )**
                                                 
 
(1) Income/(loss) before income taxes includes the purchase accounting impacts of the OBS acquisition
 
*  For the year ended December 31, 2007, earnings were insufficient to cover fixed charges by $1.6 billion.
 
** For the year ended December 31, 2004, earnings were insufficient to cover fixed charges by $332 million.
 
“Earnings” consist of income/(loss) before income taxes and equity income, plus fixed charges (other than capitalized interest and preferred stock dividends), amortization of capitalized interest and distributed income of equity investee. Schering-Plough includes interest expense or interest income on unrecognized tax benefits as a component of income tax expense. “Fixed charges” consist of interest expense, capitalized interest, preferred stock dividends and one-third of rentals which Schering-Plough believes to be a reasonable estimate of an interest factor on leases. Total rent expense was $179 million for the nine months ended September 30, 2009 and was $258 million, $156 million, $118 million, $110 million and $100 million for the years ended December 31, 2008, 2007, 2006, 2005 and 2004, respectively.
 

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