EX-12 2 y13971exv12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES . . . EXHIBIT 12 SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS YEARS ENDED ENDED DECEMBER 31 SEPTEMBER 30, -------------- 2005 2004 2003 2002 2001 2000 ------------- ----- ----- ------ ------ ------ (DOLLARS IN MILLIONS) (UNAUDITED) Income/(Loss) Before Income Taxes..... $ 305 $(168) $ (46) $2,563 $2,523 $3,188 Less: Equity Income................... 605 347 54 -- -- -- ----- ----- ----- ------ ------ ------ (Loss)/Income Before Income Taxes and Equity Income....................... (300) (515) (100) 2,563 2,523 3,188 Add Fixed Charges: Preference Dividends................ 65 34 -- -- -- -- Interest Expense.................... 122 168 81 28 40 44 One-third of Rental Expense......... 28 30 30 27 24 24 Capitalized Interest................ 11 20 11 24 25 20 ----- ----- ----- ------ ------ ------ Total Fixed Charges................. 226 252 122 79 89 88 Less: Capitalized Interest............ 11 20 11 24 25 20 Less: Preference Dividends............ 65 34 -- -- -- -- Add: Amortization of Capitalized Interest............................ 7 9 9 8 7 7 Add: Distributed Income of Equity Investees........................... 518 228 32 -- -- -- ----- ----- ----- ------ ------ ------ Earnings/(Loss) Before Income Taxes and Fixed Charges (other than Capitalized Interest)............... $ 375 $ (80) $ 52 $2,626 $2,594 $3,263 ===== ===== ===== ====== ====== ====== Ratio of Earnings to Fixed Charges.... 1.7 (0.3)* 0.4* 33.2 29.1 37.1 ===== ===== ===== ====== ====== ======
--------------- * For the years ended December 31, 2004 and 2003, earnings were insufficient to cover fixed charges by $332 million and $70 million, respectively. "Earnings" consist of income/(loss) before income taxes and equity income, plus fixed charges (other than capitalized interest and preference dividends), amortization of capitalized interest and distributed income of equity investee. "Fixed charges" consist of interest expense, capitalized interest, preference dividends and one-third of rentals which Schering-Plough believes to be a reasonable estimate of an interest factor on leases.