EX-12 5 ex12computationofratiosofe.htm EXHIBIT 12: 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)

| Years Ended December 31,
| 2017 |  | 2016 |  | 2015 |  | 2014 |  | 2013
Income Before Taxes | $ | 6,521 |  |  | $ | 4,659 |  |  | $ | 5,401 |  |  | $ | 17,283 |  |  | $ | 5,545 |
Add (Subtract): |  |  |  |  |  |  |  |  |
One-third of rents | 109 |  |  | 97 |  |  | 101 |  |  | 117 |  |  | 122 |
Interest expense, gross | 754 |  |  | 693 |  |  | 672 |  |  | 732 |  |  | 801 |
Interest capitalized, net of amortization | 2 |  |  | — |  |  | (3) |  |  | (1) |  |  | (2) |
Equity (income) loss from affiliates, net of distributions | (41) |  |  | (70) |  |  | (155) |  |  | (72) |  |  | (168) |
Earnings as defined | $ | 7,345 |  |  | $ | 5,379 |  |  | $ | 6,016 |  |  | $ | 18,059 |  |  | $ | 6,298 |
One-third of rents | $ | 109 |  |  | $ | 97 |  |  | $ | 101 |  |  | $ | 117 |  |  | $ | 122 |
Interest expense, gross | 754 |  |  | 693 |  |  | 672 |  |  | 732 |  |  | 801 |
Preferred stock dividends | — |  |  | — |  |  | — |  |  | 86 |  |  | 147 |
Fixed Charges | $ | 863 |  |  | $ | 790 |  |  | $ | 773 |  |  | $ | 935 |  |  | $ | 1,070 |
Ratio of Earnings to Fixed Charges | 9 |  |  | 7 |  |  | 8 |  |  | 19 |  |  | 6 |

For purposes of computing these ratios, “earnings” consist of income before taxes, one-third of rents (deemed by the Company to be representative of the interest factor inherent in rents), interest expense, interest capitalized, net of amortization and equity (income) loss from affiliates, net of distributions. “Fixed charges” consist of one-third of rents, interest expense as reported in the consolidated financial statements and dividends on preferred stock. Interest expense does not include interest related to uncertain tax positions.