Exhibit 12
SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
(Dollars in millions)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
(Dollars in millions)
Six Months Ended | ||||||||||||||||||||||||
June 30, | Years Ended December 31 | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
Income/(loss) before income taxes | $ | 780 | $ | 497 | $ | (168 | ) | $ | (46 | ) | $ | 2,563 | $ | 2,523 | ||||||||||
Less: Equity income | 666 | 873 | 347 | 54 | — | — | ||||||||||||||||||
Income/(loss) before income taxes and equity income | 114 | (376 | ) | (515 | ) | (100 | ) | 2,563 | 2,523 | |||||||||||||||
Add: Fixed charges: | ||||||||||||||||||||||||
Preference dividends | 43 | 86 | 34 | — | — | — | ||||||||||||||||||
Interest expense | 91 | 163 | 168 | 81 | 28 | 40 | ||||||||||||||||||
One-third of rental expense | 19 | 37 | 30 | 30 | 27 | 24 | ||||||||||||||||||
Capitalized interest | 7 | 14 | 20 | 11 | 24 | 25 | ||||||||||||||||||
Total fixed charges | 160 | 300 | 252 | 122 | 79 | 89 | ||||||||||||||||||
Less: Capitalized interest | 7 | 14 | 20 | 11 | 24 | 25 | ||||||||||||||||||
Less: Preference dividends | 43 | 86 | 34 | — | — | — | ||||||||||||||||||
Add: Amortization of capitalized interest | 5 | 10 | 9 | 9 | 8 | 7 | ||||||||||||||||||
Add: Distributed income of equity investees | 541 | 647 | 228 | 32 | — | — | ||||||||||||||||||
Earnings/(loss) before income taxes and fixed charges (other than capitalized interest) | $ | 770 | $ | 481 | $ | (80 | ) | $ | 52 | $ | 2,626 | $ | 2,594 | |||||||||||
Ratio of earnings to fixed charges | 4.8 | 1.6 | (0.3 | )* | 0.4 | ** | 33.2 | 29.1 | ||||||||||||||||
* | For the year ended December 31, 2004, earnings were insufficient to cover fixed charges by $332 million. | |
** | For the year ended December 31, 2003, earnings were insufficient to cover fixed charges by $70 million. |
“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.