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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K Annual Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994 Commission file
number 1-6571
SCHERING-PLOUGH CORPORATION
Incorporated in New Jersey 22-1918501
One Giralda Farms (I.R.S. Employer
Madison, New Jersey 07940-1000 Identification No.)
(201) 822-7000 (telephone number)
Securities registered pursuant to section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Shares, $1 par value New York Stock
Exchange
Preferred Share Purchase Rights* New York Stock
Exchange
*At the time of filing, the Rights were not traded separately from
the Common Shares.
Indicate by check mark whether the registrant has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and has been
subject to such filing requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. X
Common shares outstanding as of January 31, 1995: 186,057,622
Aggregate market value of common shares at January 31, 1995 held by
non-affiliates based on closing price: $14.6 billion.
Documents incorporated Part of Form 10-K
by reference incorporated into
Schering-Plough Corporation 1994
Annual Report to Shareholders Parts I, II and IV
Schering-Plough Corporation Proxy
Statement for the annual meeting of
shareholders on April 25, 1995 Part III
Part I
Item 1. Business
General
The terms "Schering-Plough" and the "Company," as used herein,
refer to Schering-Plough Corporation and its subsidiaries, except
as otherwise indicated by the context. Schering-Plough
Corporation is a holding company which was incorporated in 1970.
Subsidiaries of Schering-Plough Corporation are engaged in the
discovery, development, manufacturing and marketing of
pharmaceutical and health care products worldwide. Products
include prescription drugs, vision care, animal health, over-the-
counter (OTC), foot care and sun care products.
Business Segment and Other Financial Information
The "Business Segment Data" as set forth in the Notes to
Consolidated Financial Statements in the Company's 1994 Annual
Report to Shareholders is incorporated herein by reference.
Sales by major product groups for each of the three years in the
period ended December 31, 1994 were as follows (dollars in
millions):
1994 1993 1992
Respiratory $1,465 $1,185 $1,063
Anti-infective and Anticancer 939 1,032 906
Dermatologicals 488 443 451
Cardiovasculars 333 316 267
Other Pharmaceuticals 489 399 405
OTC 264 312 346
Foot Care 248 240 214
Animal Health 167 154 157
Sun Care 129 131 117
Vision Care 120 112 111
Other Health Care Products 15 17 19
Consolidated Sales $4,657 $4,341 $4,056
Pharmaceutical Products
The Company's pharmaceutical operations include prescription
drugs, vision care products and animal health products.
Principal prescription products include: CELESTAMINE, CLARITIN,
POLARAMINE, PROVENTIL, THEO-DUR, TRINALIN, VANCENASE and
VANCERIL, respiratory; CEDAX, EULEXIN, GARAMYCIN, INTRON A,
ISEPACIN and NETROMYCIN, anti-infective and anticancer;
DIPROLENE, DIPROSONE, ELOCON, FULVICIN, LOTRIMIN, LOTRISONE,
QUADRIDERM and VALISONE, dermatologicals; K-DUR, NITRO-DUR and
NORMODYNE, cardiovasculars; CELESTONE, DIPROSPAN, LOSEC, NOIN,
PALACOS and TRILAFON, other pharmaceuticals.
The Company's major vision care product line is conventional
contact lenses sold under the DURASOFT trademark. The leading
product within the DURASOFT line is DURASOFT Colors, a soft lens
that can alter the appearance of eye color. In 1994 the Company
began marketing a disposable contact lens under the FRESHLOOK
trademark. With this launch, the Company is now able to compete
in the fastest growing segment of the contact lens market. Prior
to this time, this business had been restricted to the
conventional lens segment, which has been contracting for a
number of years.
Progression to becoming a full-fledged competitor in the contact
lens business has involved Company investments in research and
capital in excess of $150 million. Notwithstanding achieving our
objective of participation in the disposable lens market, the
Company continues to review options for the further development
of its vision care business. The Company is exploring a number
of courses of action, including a strategic alliance, licensing,
divestiture or the continuation of present operations. At this
time, the outcome of this exploratory process is unknown. The
Company hopes to conclude on a course of action in 1995.
Animal health biological and pharmaceutical products include
antibiotics, vaccines, anti-arthritics, steroids and
nutritionals. Major animal health products are: GENTOCIN,
GARASOL and NUFLOR, antibiotics; BANAMINE, an anti-arthritic; and
OTOMAX, steroid ointment.
Pharmaceutical products also include pharmaceutical chemical
substances sold in bulk to third parties for production of their
own products.
Prescription drugs are introduced and made known to physicians,
pharmacists, hospitals and managed care organizations by trained
professional service representatives, and are sold to hospitals,
managed care organizations and wholesale and retail druggists.
Pharmaceutical products are also promoted through journal
advertising, direct mail advertising and by distributing samples
to physicians. Vision care products are promoted and sold by a
separate sales force to practitioners and retail outlets. Animal
health products are promoted and sold by a separate sales force
to veterinarians, distributors and animal producers.
The Company's subsidiaries own (or have licensed rights under) a
number of patents and patent applications, both in the United
States and abroad. In the aggregate, patents and patent
applications are believed to be of material importance to the
operations of the pharmaceutical segment. In December 1989, the
U.S. patent covering PROVENTIL, an asthma product, expired. The
PROVENTIL formulations of the tablet, syrup and solution have
been subject to generic competition. In January 1994, the U.S.
Food and Drug Administration issued bioequivalence standards for
generic albuterol metered dose inhalers. Generic competitors
are
expected to enter the market in the future.
The introduction of
a generic inhaler will negatively affect the sales and
profitability of PROVENTIL.
Raw materials essential to this segment are available in adequate
quantities from a number of potential suppliers. Energy was and
is expected to be available to the Company in sufficient
quantities to meet operating requirements.
Worldwide, the Company's pharmaceutical products are sold under
trademarks. Trademarks are considered in the aggregate to be of
material importance to the pharmaceutical business and are
protected by registration or common law in the United States and
most other markets where the products are sold or likely to be
sold.
Seasonal patterns do not have a pronounced effect on the combined
activities of this industry segment.
There is generally no significant backlog of orders since the
Company's business is normally conducted on an immediate shipment
basis.
The pharmaceutical industry is highly competitive and includes
other large companies with substantial resources for research,
product development and promotion. There are numerous domestic
and international competitors in this industry. Some of the
principal competitive techniques used by the Company for its
pharmaceutical products include research and development of new
and improved products, high product quality, varied dosage forms
and strengths, and educational services for the medical
community.
Health Care Products
The principal product categories in the health care segment are
the Company's over-the-counter (OTC) medicines, foot care and sun
care products primarily sold in the United States. Principal
products include: AFRIN and DURATION nasal decongestants; CHLOR-
TRIMETON antihistamine; CORICIDIN and DRIXORAL cold and
decongestant products; CORRECTOL laxative; CLEAR AWAY and DUO
wart removers; DI-GEL antacid; GYNE-LOTRIMIN for vaginal yeast
infections; DR. SCHOLL'S foot care products; LOTRIMIN AF and
TINACTIN antifungals; COPPERTONE, SHADE, SOLARCAINE and TROPICAL
BLEND sun care products; A & D ointment; and PAAS egg coloring
and holiday products. Business in this segment is conducted
through wholesale and retail drug, food chain and variety
outlets, and is promoted directly to the consumer through
television, radio, print and other advertising media.
Raw materials essential to this segment are available in adequate
quantities from a number of potential suppliers. Energy was and
is expected to be available to the Company in sufficient
quantities to meet operating requirements.
Trademarks for the major products included in this segment are
registered in the United States and most overseas countries where
these products are marketed. Trademarks are considered to be
vital to the operations of this segment.
Principally due to the seasonal sales of sun care products,
operating profits in this segment are relatively higher in the
first half of the year.
There is generally no significant backlog of orders since the
Company's business is normally conducted on an immediate shipment
basis.
The health care products' industry is highly competitive and
includes other large companies with substantial resources for
product development and promotion. There are several dozen
significant competitors in this industry. The Company believes
that in the United States it has a leading position in the foot
care and sun care industries, with its DR. SCHOLL'S lines of foot
pads, cushions, wart removal and other treatments and its brands
of sun care products. In addition, the Company's brands are
among the leaders in nasal sprays, laxatives, antifungals and
vaginal yeast infection treatments sold OTC. The principal
competitive techniques used by the Company in this industry
segment include switching prescription products to OTC medicines,
the development and introduction of new and improved products,
and product promotion methods to gain and retain consumer
acceptance.
Foreign Operations
Foreign activities are carried out primarily through wholly-owned
subsidiaries wherever market potential is adequate and circum-
stances permit. In addition, the Company is represented in some
markets through joint ventures, licensees or other distribution
arrangements. There are approximately 11,200 employees outside
the United States.
Foreign operations are subject to certain risks which are
inherent in conducting business overseas. These risks include
possible nationalization, expropriation, importation limitations
and other restrictive governmental actions. Also, fluctuations
in foreign currency exchange rates can impact the Company's
consolidated financial results. For additional information on
foreign operations, see "Management's Discussion and Analysis of
Operations and Financial Condition" and "Business Segment Data"
in the Company's 1994 Annual Report to Shareholders which is
incorporated herein by reference.
Operations in Puerto Rico
The Company has operations in Puerto Rico that manufacture
products for distribution to both domestic and foreign markets.
These businesses operate under tax-relief and other incentives
granted by the government of Puerto Rico that expire at various
dates through 2018.
The Company has also been exempt from U.S. tax on certain income
derived from its operations in Puerto Rico. The Omnibus Budget
Reconciliation Act of 1993 will phase down this exemption over
five years to 40 percent of the pre-amendment level. The Company
was partially impacted by this change in 1994.
Under present U.S. tax laws, accumulated funds generated from
operations in Puerto Rico can be remitted tax-free to the parent
company. Under recently revised Puerto Rico tax laws, remittance
of these funds, with the exception of certain amounts qualifying
for tax free distribution, will result in a tollgate tax of from
5 percent to 10 percent based upon prescribed dividend and
investment restrictions.
For additional information relating to the Puerto Rico
operations, see "Income Taxes" in the Notes to Consolidated
Financial Statements in the Company's 1994 Annual Report to
Shareholders which is incorporated herein by reference.
Research and Development
The Company's research activities are primarily aimed at
discovering and developing new and enhanced pharmaceutical
products of medical and commercial significance. Company
sponsored research and development expenditures were $620.0
million, $577.6 million and $521.5 million in 1994, 1993, and
1992, respectively. Research expenditures represented
approximately 13 percent of consolidated sales in each of the
three years.
The Company's pharmaceutical research activities are concentrated
in the therapeutic areas of allergic and inflammatory disorders,
infectious and cardiovascular diseases, oncology and central
nervous system disorders. The Company also has substantial
efforts directed toward biotechnology and immunology.
While several pharmaceutical compounds are in varying stages of
development, it cannot be predicted when or if products will
become available for commercial sale.
Government Regulation
Most products manufactured or sold by the Company are subject to
varying degrees of governmental regulation in the countries in
which operations are conducted. In the United States, the drug
industry has long been subject to regulation by various federal,
state and local agencies, primarily as to product safety,
efficacy, advertising and labeling. Compliance with the broad
regulatory powers of the Food and Drug Administration (the "FDA")
requires significant amounts of Company time, testing and
documentation, and corresponding costs to obtain clearance of new
drugs. Similar product regulations also apply in many
international markets.
In the United States, many of the Company's pharmaceutical
products are subject to competitive pricing as managed care
groups, institutions and governments seek price discounts.
Future health care reform proposals also could have an impact on
operations of the Company.
In most international markets, the Company operates in an
environment of government-mandated cost containment programs. In
addition, several markets have enacted across-the-board price
reductions or directly control selling prices as a further method
of cost control.
For additional information on prescription drug pricing, see
"Management's Discussion and Analysis of Operations and Financial
Condition" in the Company's 1994 Annual Report to Shareholders
which is incorporated herein by reference.
The Company has and will continue to comply with the government
regulations of the countries in which operations are conducted.
Environment
To date, compliance with federal, state and local environmental
protection laws has not had a materially adverse effect on the
Company. The Company has and will continue to make necessary
expenditures for environmental protection. Worldwide capital
expenditures during 1994 included approximately $30 million for
environmental control purposes. It is anticipated that continued
compliance with such environmental regulations will not
significantly affect the Company's financial statements or its
competitive position. For additional information on
environmental matters, see "Legal and Environmental Matters" in
the Notes to the Consolidated Financial Statements in the
Company's 1994 Annual Report to Shareholders which is
incorporated herein by reference.
Employees
There were approximately 21,200 people employed by the Company at
December 31, 1994.
Item 2. Properties
The Company's corporate headquarters are located in Madison, New
Jersey. Principal manufacturing facilities are located in
Kenilworth and Union, New Jersey, Des Plaines, Illinois, Miami,
Florida, the Commonwealth of Puerto Rico, Argentina, Australia,
Belgium, Canada, Colombia, France, Ireland, Italy, Japan, Mexico
and Spain (pharmaceutical products); Cleveland and Memphis,
Tennessee (health care products). The Company's principal
research facilities are located in Kenilworth and Union, New
Jersey and Palo Alto, California (DNAX Research Institute).
The major portion of properties is owned by the Company. These
properties are maintained in good operating condition, and the
manufacturing plants have capacities considered appropriate to
meet the Company's needs.
Item 3. Legal Proceedings
Schering Corporation and White Laboratories, Inc., which are
Company subsidiaries, are defendants in more than 95 lawsuits,
involving more than 450 plaintiffs, arising out of the use of
synthetic estrogens by the mothers of the plaintiffs. In many of
these lawsuits, one being an alleged class action, a substantial
number of other drug companies are also defendants. The female
plaintiffs claim various injuries, including cancerous or
precancerous lesions of the vagina and cervix and a multiplicity
of pregnancy problems. A number of suits involve infants with
birth defects born to daughters whose mothers took the drug. The
total amount claimed against all defendants in all the suits
amounts to more than $2 billion. While it is not possible to
precisely predict the outcome of these proceedings, it is
management's opinion that it is remote that any material
liability in excess of the amounts accrued will be incurred.
The Company has been named as a potentially responsible party
("PRP") by the government under the Comprehensive Environmental
Response, Compensation and Liability Act, commonly known as
Superfund, or under equivalent state laws. The Company is also a
party to a number of proceedings brought under state or federal
Superfund laws. These proceedings seek to require the owners or
operators of facilities that treated, stored or disposed of
hazardous substances and transporters and generators of such
substances to clean-up contaminated facilities or reimburse the
government for its clean-up costs. The Company has been named a
PRP or a party to these proceedings as an alleged generator of
hazardous substances found at certain facilities. In each
proceeding, the government or private litigants allege that the
Company is jointly and severally liable for clean-up costs.
Although joint and several liability is alleged, a company's
share of clean-up costs is frequently determined on the basis of
the type and quantity of hazardous substances sent to a facility
by the generator. However, this allocation process varies
greatly from facility to facility and can take years to complete.
The Company's potential share of clean-up costs also depends on
how many other PRP's are involved in the proceedings, insurance
coverage, available indemnity contracts and contribution rights
against other PRP's or parties. While it is not possible to
precisely predict the outcome of these proceedings, it is
management's opinion that it is remote that any material
liability in excess of amounts accrued will be incurred.
In 1994, a judgment in the amount of $63.6 million, including
$57.5 million in punitive damages, was entered against the
Company in state court in Portland, Oregon in connection with a
product liability lawsuit involving THEO-DUR. An appeal from the
judgment has been taken. While the success of the appeal cannot
be predicted with certainty, the Company will vigorously pursue
its case through the appellate courts. The Company believes it
has insurance coverage for amounts in excess of a $3 million
self-insured retention, but the insurance carriers have reserved
their rights with respect to liability for punitive damages.
More than 100 antitrust actions have been commenced in state and
federal courts against prescription drug manufacturers and, in
some cases, wholesalers and mail order pharmacies, by independent
and chain pharmacies, and chain food stores that operate
pharmacies. The Company is a defendant in all these actions.
The complaints allege conspiracy to restrain trade by jointly
refusing to sell prescription drugs at discounted prices to the
plaintiffs, price discrimination, or both. The plaintiffs seek
treble damages in an unspecified amount and an injunction against
the allegedly unlawful conduct. One of the actions is a class
action on behalf of all retail pharmacies in the United States
and is pending in the United States District Court for the
Northern District of Illinois, where all the federal actions have
been consolidated for pre-trial discovery and possibly trial.
Another of the actions, which was commenced in June 1994 by a
group of nine chain food stores, including The Great Atlantic and
Pacific Tea Company, Inc. ("A&P"), against three mail order
pharmacies and 16 drug manufacturers, is pending in the same
federal court. Mr. James Wood, a director of the Company, is an
executive officer of A&P. Mr. Wood does not participate in any
review or deliberations by the Board of Directors relating to
this action. The Company believes that all these antitrust
actions are without merit and is defending itself vigorously
against all claims.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Executive Officers of the Registrant
The following information regarding executive officers is included
herein in accordance with Part III, Item 10.
Officers are elected to serve for one year and until their successors
shall have been duly elected.
Name and Current Position Business Experience Age
Robert P. Luciano Present position 1986 61
Chairman and
Chief Executive Officer
Richard J. Kogan Present position 1986 53
President and
Chief Operating Officer
Raul E. Cesan Present position 1994 47
Executive Vice President President Schering
and President Laboratories 1992-1994
Schering-Plough President Schering-Plough
Pharmaceuticals International 1988-1992
Donald R. Conklin Present position 1994 58
Executive Vice President Executive Vice President
and President and President
Schering-Plough Schering-Plough
HealthCare Products Pharmaceuticals 1989-1994
Hugh A. D'Andrade Present position 1984 56
Executive Vice President
Administration
Harold R. Hiser, Jr. Present position 1986 63
Executive Vice President
Finance
Joseph C. Connors Present position 1992; Vice 46
Senior Vice President President and General Counsel
and General Counsel 1991; Staff Vice President and
Deputy General Counsel 1987-1991
Geraldine U. Foster Present position 1994 52
Senior Vice President Vice President - Investor
Investor Relations and Relations 1988-1994
Corporate Communications
Daniel A. Nichols Present position 1991; Vice 54
Senior Vice President President Taxes 1983-1991
Taxes
Name and Current Position Business Experience Age
Gordon C. O'Brien Present position 1988 54
Senior Vice President
Human Resources
J. Martin Comey Present position 1991; Vice 60
Vice President President and Treasurer
Administration and Business 1979-1990
Development
Domenic Guastadisegni Present position 1990 64
Vice President
Corporate Audits
Thomas H. Kelly Present position 1991; Partner, 45
Vice President and Deloitte & Touche 1982-1990
Controller
Robert S. Lyons Present Position 1991; Staff 54
Vice President Vice President - Corporate
Corporate Information Information Services 1988-1990
Services
Jack L. Wyszomierski Present position 1991; Staff 39
Vice President and Vice President - Planning
Treasurer and Business Development
1987-1990
Kevin A. Quinn Present position 1994; Staff 53
Staff Vice President, Vice President and Deputy
Secretary and Associate Secretary 1993; Vice President,
General Counsel Secretary and Associate General
Counsel, The Pittston Company
1989-1993
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Common Share Dividends and Market Data as set forth in the
Company's 1994 Annual Report to Shareholders are incorporated
herein by reference.
Item 6. Selected Financial Data
The Six-Year Selected Financial & Statistical Data as set forth
in the Company's 1994 Annual Report to Shareholders is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's Discussion and Analysis of Operations and Financial
Condition as set forth in the Company's 1994 Annual Report to
Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets as of December 31, 1994 and 1993,
and the related Statements of Consolidated Income, Consolidated
Retained Earnings and Consolidated Cash Flows for each of the
three years in the period ended December 31, 1994, Notes to
Consolidated Financial Statements, the Independent Auditors'
Report of Deloitte & Touche LLP dated February 15, 1995 and
Quarterly Results of Operations, as set forth in the Company's
1994 Annual Report to Shareholders, are incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
Part III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors and nominees for directors
as set forth in the Company's Proxy Statement for the annual
meeting of shareholders on April 25, 1995 is incorporated herein
by reference.
Information required as to executive officers is included in Part
I of this filing under the caption "Executive Officers of the
Registrant."
Item 11. Executive Compensation
Executive compensation information as set forth in the Company's
Proxy Statement for the annual meeting of shareholders on April
25, 1995 is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information concerning security ownership of certain beneficial
owners and management as set forth in the Company's Proxy
Statement for the annual meeting of shareholders on April 25,
1995 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related
transactions as set forth in the Company's Proxy Statement for
the annual meeting of shareholders on April 25, 1995 is
incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1. Financial Statements
The following consolidated financial statements and
independent auditors' report, included in the Company's
1994 Annual Report to Shareholders, are incorporated
herein by reference.
Statements of Consolidated Income for the
Years Ended December 31, 1994, 1993 and 1992
Statements of Consolidated Retained Earnings for
the Years Ended December 31, 1994, 1993 and 1992
Statements of Consolidated Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992
Consolidated Balance Sheets at December 31, 1994 and
1993
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a) 2. Financial Statement Schedules
Page in
Form 10-K
Independent Auditors' Report . . . . . . . . . . . . 20
Schedule II - Valuation and Qualifying Accounts. . . 21
Schedules not included have been omitted because they are not
applicable or not required or because the required information is
set forth in the financial statements or the notes thereto.
Columns omitted from schedules filed have been omitted because
the information is not applicable.
Financial statements of fifty percent or less owned companies
accounted for by the equity method have been omitted because,
considered individually or in the aggregate, they do not
constitute a significant subsidiary.
(a) 3. Exhibits
Exhibit Method
Number Description of Filing
3(a) A complete copy of the Certificate Incorporated by
of Incorporation as amended and reference to Exhibit
currently in effect. 3(a) to the Company's
Annual Report for 1989
on Form 10-K
3(b) A complete copy of the By-Laws Incorporated by
as amended and currently in effect. reference to Exhibit
4(b) to the Company's
Form S-8 (No. 33-19013)
4(a) Rights Agreement between the Incorporated by
Company and The Bank of New York reference to Exhibit 4
dated July 25, 1989. to the Company's
Quarterly Report for the
period ended June 30,
1989 on Form 10-Q
4(b) Indenture dated as of November 1, Incorporated by
1982 between the Company and The reference to Exhibit
Chase Manhattan Bank, N.A. as 4(a) to the Company's
Trustee. Registration Statement
on Form S-3, File No.
2-80012
Exhibit Method
Number Description of Filing
4(c) Supplemental Indenture No. 1 Incorporated by
dated as of November 1, 1991 reference to Exhibit 4.1
to Indenture dated as of to the Company's Report
November 1, 1982. on Form 8-K dated
November 20, 1991
4(d) LYNX Equity Unit Agreement Incorporated by
reference to Exhibit
10.1 to the Company's
Report on Form 8-K dated
October 1, 1991
4(e) LYNX Equity Unit Guarantee Incorporated by
Agreement reference to Exhibit
10.1 to the Company's
Report on Form 8-K dated
October 1, 1991
10(a) The Company's Executive Incentive Plan incorporated by
Plan (as amended) and Trust related reference to Exhibit
thereto* 10 to the Company's
Quarterly Report for
the period ended March
31, 1994 on Form 10-Q.
Trust Agreement
incorporated by
reference to Exhibit
10(a) to the Company's
Annual Report for 1988
on Form 10-K
10(b) The Company's 1983 Stock Incentive Incorporated by
Plan (as amended)* reference to Exhibit
10(c) to the Company's
Annual Report for 1988
on Form 10-K
10(c) The Company's 1987 Stock Incentive Incorporated by
Plan (as amended)* reference to Exhibit
10(d) to the Company's
Annual Report for 1990
on Form 10-K
10(d) The Company's 1992 Stock Incentive Incorporated by
Plan (as amended)* reference to Exhibit
10(d) to the Company's
Annual Report for 1992
on Form 10-K
Exhibit Method
Number Description of Filing
10(e)(i) Employment agreement between the Incorporated by
Company and Robert P. Luciano reference to Exhibit
(as amended)* 10(e)(i) to the
Company's Annual Report
for 1989 on Form 10-K;
first amendment
incorporated by
reference to Exhibit
10(a) to the Company's
Quarterly Report for the
period ended June 30,
1994 on Form 10-Q;
second amendment filed
with this document
10(e)(ii) Employment agreement between the Incorporated by
Company and Richard J. Kogan reference to Exhibit
(as amended)* 10(e)(ii) to the
Company's Annual Report
for 1989 on Form 10-K;
first amendment
incorporated by
reference to Exhibit
10(b) to the Company's
Quarterly Report for the
period ended June 30,
1994 on Form 10-Q;
second amendment filed
with this document
10(e)(iii) Employment agreement between the Incorporated by
Company and Hugh A. D'Andrade reference to Exhibit
(as amended)* 10(c) to the Company's
Quarterly Report for the
period ended June 30,
1994 on Form 10-Q;
first amendment filed
with this document
10(e)(iv) Form of employment agreement Filed with this
between the Company and its document
executive officers effective upon
a change of control*
Exhibit Method
Number Description of Filing
10(f) Directors Deferred Compensation Plan incorporated by
Plan and Trust related thereto* reference to Exhibit 10
(f) to the Company's
Annual Report for 1991
on Form 10-K; Trust
Agreement incorporated
by reference to Exhibit
10(a) to the Company's
Annual Report for 1988
on Form 10-K
10(g) Pension Plan for Directors Plan incorporated by
and Trust related thereto* reference to Exhibit
10(g) to the
Company's Annual
Report for 1987 on
Form 10-K; Trust
Agreement
incorporated by
reference to Exhibit
10(g) to the Company's
Annual Report for 1988
on Form 10-K; amendment
to Trust Agreement
incorporated by
reference to Exhibit
10(g) to the Company's
Annual Report for 1993
on Form 10-K
10(h) Supplemental Executive Retirement Plan incorporated by
Plan and Trust related thereto* reference to Exhibit
10(h) to the Company's
Annual Report for 1987
on Form 10-K; amendments
to Plan filed with this
document; Trust
Agreement incorporated
by reference to Exhibit
10(g) to the Company's
Annual Report for 1988
on Form 10-K; amendment
to Trust Agreement
incorporated by
reference to Exhibit
10(g) to the Company's
Annual Report for 1993
on Form 10-K
Exhibit Method
Number Description of Filing
10 (i) Directors' Stock Award Plan* Incorporated by
reference to Exhibit
10 to the Company's
Quarterly Report for the
period ended September
30, 1994 on Form 10-Q
11 Computation of Earnings Per Filed with this document
Common Share
12 Computation of Ratio of Filed with this document
Earnings to Fixed charges
13 The Financial Section of the Filed with this document
Company's 1994 Annual Report
to Shareholders. With the
exception of those portions of
said Annual Report which are
specifically incorporated by
reference in this Form 10-K, such
report shall not be deemed filed
as part of this Form 10-K
21 Subsidiaries of the registrant Filed with this document
23 Consents of experts and counsel Filed with this document
24 Power of attorney Filed with this document
27 Financial Data Schedule Filed with this document
All other exhibits are not applicable. Copies of above exhibits will be
furnished upon request.
* Compensatory plan, contract or arrangement.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Schering-Plough Corporation
(Registrant)
Date March 3, 1995 By /s/ Thomas H. Kelly
Thomas H. Kelly
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the date indicated.
By * By *
Robert P. Luciano Regina E. Herzlinger
Chairman and Chief Executive Director
Officer and Director
By * By *
Richard J. Kogan H. Barclay Morley
President and Chief Operating Director
Officer and Director
By * By *
Harold R. Hiser, Jr. Richard de J. Osborne
Executive Vice President - Finance Director
and Principal Financial Officer
By * By *
Thomas H. Kelly William A. Schreyer
Vice President and Controller Director
and Principal Accounting Officer
By * By *
Hans W. Becherer Robert F. W. van Oordt
Director Director
By * By *
Hugh A. D'Andrade R. J. Ventres
Director Director
By * By *
David C. Garfield James Wood
Director Director
*By /s/ Thomas H. Kelly Date March 3, 1995
Thomas H. Kelly
Attorney-in-fact
INDEPENDENT AUDITORS' REPORT
Schering-Plough Corporation:
We have audited the consolidated balance sheets of Schering-Plough
Corporation and subsidiaries as of December 31, 1994 and 1993 and
the related statements of consolidated income, retained earnings and
cash flows for each of the three years in the period ended December
31, 1994, and have issued our report thereon dated February 15,
1995; such financial statements and report are included in your 1994
Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the financial statement
schedule of Schering-Plough Corporation and subsidiaries, listed in
Item 14. This financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express our
opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 15, 1995
SCHEDULE II
SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
(Dollars in millions)
Valuation and qualifying accounts deducted from assets to which they apply:
Allowances for accounts receivable:
RESERVE RESERVE RESERVE
FOR DOUBTFUL FOR CASH FOR CLAIMS
ACCOUNTS DISCOUNTS AND OTHER TOTAL
1994
Balance at beginning of year $ 30.5 $ 7.9 $ 6.5 $ 44.9
Additions:
Charged to costs and expenses 17.1 62.4 3.2 82.7
Total 47.6 70.3 9.7 127.6
Translation adjustment .6 (.1) .1 .6
Deductions from reserves (4.2) (62.3) (4.2) (70.7)
Balance at end of year $ 44.0 $ 7.9 $ 5.6 $57.5
1993
Balance at beginning of year $ 32.5 $ 9.0 $ 1.8 $ 43.3
Additions:
Charged to costs and expenses 5.1 54.3 16.1 75.5
Total 37.6 63.3 17.9 118.8
Translation adjustment (1.1) (.1) - (1.2)
Deductions from reserves (6.0) (55.3) (11.4) (72.7)
Balance at end of year $ 30.5 $ 7.9 $ 6.5 $ 44.9
1992
Balance at beginning of year $ 33.4 $ 6.8 $ 4.3 $ 44.5
Additions:
Charged to costs and expenses 20.5 50.9 5.0 76.4
Total 53.9 57.7 9.3 120.9
Translation adjustment (1.6) (.1) (.1) (1.8)
Deductions from reserves (19.8) (48.6) (7.4) (75.8)
Balance at end of year $ 32.5 $ 9.0 $ 1.8 $ 43.3