Merck & Co. (MRK) 10-Q 2006 Q2 Quarterly report

Exhibit 12

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES

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.