EX-12 3 dex12.htm COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES Computation of Ratios of Earnings to Fixed Charges

Exhibit 12

MERCK & CO., INC. AND SUBSIDIARIES

Computation of Ratios of Earnings to Fixed Charges

($ in millions except ratio data)

 

     Three Months
Ended
March 31,

2009
    Years Ended December 31,  
       2008     2007     2006     2005     2004  

Income Before Taxes

   $ 1,783.0     $ 9,931.7     $ 3,492.1     $ 6,341.9     $ 7,485.7     $ 8,157.0  

Add (Subtract):

            

One-third of rents

     15.6       74.8       66.4       67.8       68.2       71.9  

Interest expense, gross

     60.7       251.3       384.3       375.1       385.5       293.7  

Interest capitalized, net of amortization

     10.0       40.9       31.8       29.4       (1.0 )     (21.3 )

Equity (income) loss from affiliates, net of distributions

     (129.2 )     (493.7 )     (454.3 )     (362.5 )     (615.9 )     (421.2 )
                                                

Earnings as defined

   $ 1,740.1     $ 9,805.0     $ 3,520.3     $ 6,451.7     $ 7,322.5     $ 8,080.1  
                                                

One-third of rents

   $ 15.6     $ 74.8     $ 66.4     $ 67.8     $ 68.2     $ 71.9  

Interest expense, gross

     60.7       251.3       384.3       375.1       385.5       293.7  

Preferred stock dividends

     36.3       145.0       158.1       166.0       166.7       207.1  
                                                

Fixed Charges

   $ 112.6     $ 471.1     $ 608.8     $ 608.9     $ 620.4     $ 572.7  
                                                

Ratio of Earnings to Fixed Charges

     15       21       6       11       12       14  
                                                

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 and equity (income) loss from affiliates, net of distributions. “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.