EX-12 2 y37925exv12.htm EX-12: COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES EX-12
 

Exhibit 12
MERCK & CO., INC. AND SUBSIDIARIES
Computation of Ratios of Earnings to Fixed Charges
($ in millions except ratio data)
                                                 
    Six Months        
    Ended        
    June 30,     Years Ended December 31,  
    2007     2006     2005     2004     2003     2002  
Income from Continuing Operations Before Taxes
   $ 4,486.6     $ 6,221.4     $ 7,363.9     $ 7,974.5     $ 9,051.6     $ 9,651.7  
 
                                                
Add (Subtract):
                                                
One-third of rents
     33.9       67.8       68.2       71.9       75.6       67.2  
Interest expense, gross
     205.7       375.1       385.5       293.7       350.9       390.6  
Interest capitalized, net of amortization
     19.3       29.4       (1.0 )     (21.3 )     (30.1 )     (36.9 )
Equity (income) loss from affiliates, net of distributions
     (529.1 )     (362.5 )     (615.9 )     (421.2 )     79.2       (156.1 )
Preferred stock dividends, net of tax
     59.5       120.0       120.0       151.0       150.9       164.3  
 
                                    
Earnings from Continuing Operations
   $ 4,275.9     $ 6,451.2     $ 7,320.7     $ 8,048.6     $ 9,678.1     $ 10,080.8  
 
                                    
 
                                                
One-third of rents
   $ 33.9     $ 67.8     $ 68.2     $ 71.9     $ 75.6     $ 67.2  
Interest expense, gross
     205.7       375.1       385.5       293.7       350.9       390.6  
Preferred stock dividends
     79.8       166.0       166.7       207.1       215.6       234.7  
 
                                    
Fixed Charges from Continuing Operations
   $ 319.4     $ 608.9     $ 620.4     $ 572.7     $ 642.1     $ 692.5  
 
                                    
 
                                                
Ratio of Earnings to Fixed Charges from Continuing Operations
     13       11       12       14       15       15  
 
                                    
For purposes of computing these ratios, “earnings” consist of income from continuing operations before taxes, one-third of rents (deemed by the Company to be representative of the interest factor inherent in rents), interest expense, net of amounts capitalized, equity (income) loss from affiliates, net of distributions, and dividends on preferred stock of subsidiary companies. “Fixed charges” consist of one-third of rents, interest expense as reported in the Company’s consolidated financial statements and dividends on preferred stock of subsidiary companies. Interest expense does not reflect interest on Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, (“FIN 48”) liabilities.