See more news releases in: Health Care & Hospitals, Medical Pharmaceuticals, Earnings
Schering-Plough Reports Financial Results for Third Quarter of 2007
Solid Performance Continues in Third Quarter of 2007; Company Prepares for
Integration of Organon BioSciences
KENILWORTH, N.J., Oct. 22 /PRNewswire-FirstCall/ -- Schering-Plough
Corporation (NYSE: SGP) today reported financial results for the third
quarter of 2007 and commented on its planned acquisition of Organon
BioSciences N.V. (OBS), which includes the Organon human health business
and Intervet animal health business.
"Schering-Plough has now recorded its 12th consecutive quarter of
double- digit adjusted sales growth," said Fred Hassan, chairman and CEO.
"Schering- Plough's long-term strategy continues to unfold. Our strategy to
grow the top line, exercise financial discipline and expand our R&D
pipeline again delivered strong results."
Added Hassan: "Our focus on building R&D excellence is beginning to
bear fruit. With the upcoming acquisition of Organon BioSciences, we will
have a total of 12 significant projects in Phase III -- we will have a
pipeline with a Phase III bulge. This, combined with relatively long
exclusivity of our marketed product portfolio, puts Schering-Plough in a
substantially stronger position in terms of its late-stage pipeline and
portfolio than only four years ago," said Hassan.
For the 2007 third quarter, Schering-Plough reported net income
available to common shareholders of $713 million or 45 cents per common
share on a GAAP basis. Excluding acquisition-related items and an upfront
R&D payment, earnings per share for the 2007 third quarter would have been
28 cents (see table below on page 13). For the 2006 third quarter,
Schering-Plough reported net income of $287 million or 19 cents per common
share on a GAAP basis.
Net sales for the 2007 third quarter rose 9 percent on a GAAP basis and
12 percent on an adjusted basis versus the 2006 period. GAAP net sales for
the 2007 third quarter totaled $2.8 billion; adjusted net sales, which
includes an assumed 50 percent of global cholesterol joint venture net
sales (see table below on page 12 and hereinafter referred to as "adjusted
sales") for the 2007 third quarter would have totaled $3.5 billion compared
to $3.1 billion on a similar adjusted basis in the 2006 third quarter.
Schering-Plough does not record sales of its cholesterol joint venture with
Merck & Co., Inc. (Merck), as the venture is accounted for under the equity
method.
Hassan noted that Schering-Plough's expanding Phase III pipeline should
provide important future strength. Schering-Plough recently advanced two
compounds into Phase III trials -- vicriviroc for HIV and a thrombin
receptor antagonist (TRA) for atherothrombosis; both have been granted
"fast track" designation by the U.S. Food and Drug Administration (FDA).
The number of patients in clinical trials in 2007 has increased
substantially versus 2006, and is expected to increase again next year.
This level of expanded R&D is unequaled in the company's history.
As Schering-Plough advances in the Build the Base phase of its six- to
eight-year Action Agenda, it has continued to resolve issues from the past
-- most recently, the dissolution in August 2007 of the FDA consent decree,
first entered into in May 2002, by the U.S. District Court for the District
of New Jersey (Newark).
"This was an unprecedented and heroic achievement by our people," said
Hassan. "We are a company that stands out for injecting quality, compliance
and business integrity into our DNA."
Organon BioSciences Update
Since the March 12 announcement, Schering-Plough has made significant
progress toward completing the acquisition of OBS from Akzo Nobel N.V. This
includes gaining European Commission approval for the acquisition and
completing most of its financing plan by securing nearly $9 billion in
financing through a mix of equity and debt of varying maturities (3-30
years). The company has completed a customary consultative process with the
OBS Works Council in the Netherlands in a positive manner, which will
facilitate the transaction with Akzo Nobel.
"The acquisition of Organon BioSciences will create a world-class human
health business balanced by the diversification of a world-class animal
health business, with its cash flow and strong operating margins," said
Hassan. "We will be focused relentlessly on doing the right things to
realize the enormous long-term promise of this combination. This means
focusing on top-line growth, advancing key R&D projects, continuing to
achieve productivity gains across the company and forging a unified,
high-performance culture."
In connection with the European Commission clearance, Schering-Plough
has agreed to divest certain animal health products in Europe. The
divestitures are not expected to be material to the company's financial
results. Schering- Plough still needs to secure certain other regulatory
approvals, including clearance from the U.S. Federal Trade Commission
(FTC), and continues to expect the transaction to be completed by year-end
2007.
Third Quarter 2007 Results
For the 2007 third quarter, Schering-Plough reported net income
available to common shareholders of $713 million or 45 cents per common
share on a GAAP basis. Excluding acquisition-related items and an upfront
R&D payment, earnings per share for the 2007 third quarter would have been
28 cents. The GAAP results include a favorable impact of 17 cents per share
comprised of a net benefit of $294 million for acquisition-related items
(primarily due to a mark-to-market gain on a currency option) and a charge
of $20 million for an upfront licensing payment.
For the 2006 third quarter, the company reported net income available
to common shareholders of $287 million or 19 cents per common share on a
GAAP basis.
GAAP net sales for the 2007 third quarter totaled $2.8 billion, up 9
percent as compared to the third quarter of 2006. The sales growth reflects
a 3 percent favorable impact from foreign exchange and a 2 percent
unfavorable impact related to the reversal of accrued rebates in the 2006
third quarter for the TRICARE Retail Pharmacy Program in the United States.
Global cholesterol joint venture net sales, which include VYTORIN and
ZETIA, totaled $1.3 billion in the 2007 third quarter, a 26 percent
increase compared to net sales of $1.0 billion in the comparable 2006
period. Schering-Plough does not record sales of its cholesterol joint
venture with Merck as the venture is accounted for under the equity method.
Including an adjustment of an assumed 50 percent of the global cholesterol
joint venture net sales, Schering-Plough's adjusted sales for the 2007
third quarter would have been $3.5 billion, a 12 percent increase, compared
to $3.1 billion on a similar adjusted basis in the 2006 third quarter.
Overall, Schering-Plough shares in approximately 50 percent of the
profits of the joint venture with Merck, although there are different
profit-sharing arrangements for the cholesterol products in countries
around the world. Schering-Plough records its share of the income from
operations in "Equity income from cholesterol joint venture," which totaled
$506 million in the 2007 third quarter versus $390 million in the third
quarter of 2006. Schering- Plough noted that it incurs substantial costs
such as selling, general and administrative costs that are not reflected in
"Equity income from cholesterol joint venture" and are borne by its overall
cost structure. There is a separate co-marketing agreement with Bayer for
ZETIA in Japan, where the product was launched in June 2007.
Sales of REMICADE increased 34 percent to $426 million in the third
quarter of 2007 due to continued market growth and expanded use across
indications. REMICADE is a treatment for inflammatory diseases that
Schering- Plough markets in countries outside the United States (except in
Japan and certain other Asian markets) for rheumatoid arthritis, early
rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis, plaque
psoriasis, Crohn's disease, pediatric Crohn's disease and ulcerative
colitis.
Global sales of NASONEX, an inhaled nasal corticosteroid for allergies,
rose 10 percent to $242 million versus the 2006 period, due to increased
sales in international markets.
Sales of PEGINTRON for hepatitis C increased 7 percent to $221 million
in the 2007 third quarter due to higher sales in Latin America and emerging
markets across Europe, and tempered by lower sales in Japan and the United
States.
Sales of TEMODAR, a treatment for certain types of brain tumors, grew
20 percent to $215 million due primarily to increased sales across all
geographic markets, including Japan, where the product was launched in
September 2006. The growth rate for TEMODAR is expected to continue to
moderate as significant penetration in U.S. and EU markets has already been
achieved for this product.
Global sales of CLARINEX, a nonsedating antihistamine, in the third
quarter of both 2007 and 2006 were $171 million. Higher sales of CLARINEX
in international markets were offset by lower sales in the United States.
International sales of prescription CLARITIN were $83 million in the third
quarter of 2007 compared to sales of $74 million in the third quarter of
2006.
Among other prescription products posting higher sales in the 2007
third quarter was the antibiotic AVELOX, up 24 percent to $78 million, as a
result of increased market share.
Consumer Health Care sales were $273 million in the 2007 third quarter,
up 5 percent versus the 2006 period. The increase was primarily due to
sales of MiraLAX, which was launched in February 2007 as the first
Rx-to-OTC switch in the laxative category in more than 30 years; higher
sales of OTC CLARITIN; partially offset by a decline in sun care sales.
Animal Health sales increased 8 percent to $248 million, reflecting
solid growth internationally, led by the poultry, companion animal,
aquaculture and swine product lines, coupled with a positive impact from
foreign currency exchange rates. The growth in international markets was
tempered by a decline in the United States.
Schering-Plough incurs substantial costs such as selling, general and
administrative costs that are not reflected in "Equity income from
cholesterol joint venture" and are borne by the overall cost structure of
Schering-Plough. As a result, Schering-Plough's gross margin and ratios of
selling, general and administrative (SG&A) expenses and R&D expenses as a
percentage of sales do not reflect the benefit of the impact of the
cholesterol joint venture's operating results.
On a GAAP basis, Schering-Plough's gross margin was 67.1 percent for
the 2007 third quarter as compared to 65.6 percent in the 2006 period.
SG&A expenses were $1.3 billion in the third quarter of 2007, up 9
percent versus $1.2 billion in the prior-year period. SG&A in the third
quarter of 2007 increased primarily due to increased promotional spending.
Research and development spending for the 2007 third quarter increased
to $669 million compared to $536 million in the third quarter of 2006.
Included in R&D spending in the third quarter of 2007 was $20 million
related to an upfront payment made for in-licensing acadesine, a Phase III
cardiovascular agent for ischemia-reperfusion injury. The increase in R&D
expenses was also due to higher spending for clinical trials and related
activities, and investments to build greater breadth and capacity to
support the dramatic expansion of Schering-Plough's Phase III pipeline
during the past 12 months.
Recent Developments
The company also offered the following summary of recent significant
developments that have previously been announced, including:
-- Reported results from a Phase II clinical trial showing that
vicriviroc, the company's investigational CCR5 antagonist, demonstrated
potent and sustained viral suppression through 48 weeks of therapy in
treatment-experienced HIV patients. (Announced July 24)
-- Continued development of the company's new Pharmaceutical Sciences
Center in Summit, N.J. (Announced July 25)
-- Announced the dissolution of the Consent Decree of Permanent Injunction
by the U.S. District Court for the District of New Jersey (Newark).
(Announced Aug. 2)
-- Completed three significant financing rounds in conjunction with the
planned acquisition of Organon BioSciences N.V., including:
-- a registered public offering of 57.5 million common shares
(approximately $1.5 billion) and a registered public offering of
$2.5 billion of mandatory convertible preferred stock (announced
Aug. 9);
-- a $1 billion 10-year U.S. bond offering and a $1 billion 30-year
U.S. bond offering (announced Sept. 12); and
-- a 1.5 billion Euro seven-year bond offering and a 500 million Euro
three-year bond offering (announced Sept. 26).
-- Schering-Plough/Merck Pharmaceuticals announced that a New Drug
Application filing for loratadine/montelukast has been accepted by the
FDA for standard review for treatment of allergic rhinitis symptoms in
patients who want relief from nasal congestion. (Announced Aug. 28)
-- Announced that all of Schering-Plough's outstanding 6% mandatory
convertible preferred stock issued in 2004 converted into shares of its
common stock on Sept. 14, 2007. (Announced Sept. 13)
-- Announced the initiation of two large Phase III clinical studies with
vicriviroc, the company's investigational CCR5 antagonist, administered
once-daily in combination with an optimized background therapy in adult
treatment-experienced HIV patients with R5-type virus only. (Announced
Sept. 17)
-- Reported that the Committee for Medicinal Products for Human Use (CHMP)
of the European Medicines Agency (EMEA) had issued a positive opinion
recommending approval of combination therapy with PEGINTRON
(peginterferon alfa-2b) and REBETOL (ribavirin) for retreating adult
patients with chronic hepatitis C whose previous treatment with
interferon alpha (pegylated or non-pegylated) and ribavirin combination
therapy or interferon alpha monotherapy did not result in a sustained
response. (Announced Sept. 24)
-- Received approval from the European Commission for Schering-Plough's
planned acquisition of Organon BioSciences N.V. from Akzo Nobel N.V.
(Announced Oct. 11)
-- Provided an update on the clinical development program for boceprevir,
the company's investigational oral hepatitis C protease inhibitor. In
a Phase II study in treatment-na�ve hepatitis C patients, boceprevir
combination therapy with PEGINTRON and REBETOL achieved a high rate of
early virologic response. In a second study in treatment non
responders (the most difficult-to-treat patient population), while
boceprevir combination therapy with PEGINTRON and REBETOL demonstrated
antiviral activity, the majority of patients did not achieve a
sustained virologic response (SVR). No increase in skin adverse events
(rash) beyond what was seen in the control group was observed in these
studies. (Announced Oct. 18)
Third Quarter 2007 Conference Call and Webcast
Schering-Plough will conduct a conference call today at 8 a.m. (EDT) to
review the 2007 third quarter results. To listen live to the call, dial 1-
877-565-9664 or 1-706-634-5003 and enter conference ID #17949276. A replay
of the call will be available beginning later today through 5 p.m. on Nov.
19. To listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and
enter the conference ID #17949276. A live audio webcast of the conference
call also will be available by going to the Investor Relations section of
the Schering- Plough corporate Web site, www.schering-plough.com, and
clicking on the "Presentations/Webcasts" link. A replay of the webcast will
be available starting on Oct. 22 through 5 p.m. on Nov. 19.
DISCLOSURE NOTICE: The information in this press release, the comments
of Schering-Plough officers during the earnings teleconference/webcast on
Oct. 22, 2007, beginning at 8 a.m. (EDT), and other written reports and
oral statements made from time to time by the company may contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements do not relate
strictly to historical or current facts and are based on current
expectations or forecasts of future events. You can identify these
forward-looking statements by their use of words such as "anticipate,"
"believe," "could," "estimate," "expect," "forecast," "project," "intend,"
"plan," "potential," "will," and other similar words and terms. In
particular, forward-looking statements include statements relating to the
company's plans; its strategies; its progress under the Action Agenda and
anticipated timing regarding future performance of the Action Agenda;
business prospects; anticipated growth; timing and conditions of regulatory
approvals and expected synergies related to the Organon BioSciences
acquisition; prospective products or product approvals; trends in
performance; anticipated timing of clinical trials and its impact on R&D
spending; anticipated exclusivity periods; actions to enhance clinical,
R&D, manufacturing and post-marketing systems; and the potential of certain
products including VYTORIN and ZETIA. Actual results may vary materially
from the company's forward-looking statements, and there are no guarantees
about the performance of Schering-Plough stock or Schering-Plough's
business. Schering-Plough does not assume the obligation to update any
forward-looking statement. A number of risks and uncertainties could cause
results to differ materially from forward-looking statements, including,
among other uncertainties, market forces; economic factors such as interest
rate and exchange rate fluctuations; obtaining regulatory approvals and
satisfaction of other customary closing conditions for the Organon
BioSciences acquisition; the outcome of contingencies such as litigation
and investigations; product availability; patent and other intellectual
property protection; current and future branded, generic or
over-the-counter competition; the regulatory process (including product
approvals, labeling and post-marketing actions); and scientific
developments relating to marketed products or pipeline projects. For
further details of these and other risks and uncertainties that may impact
forward-looking statements, see Schering-Plough's Securities and Exchange
Commission filings, including Item 8.01 of the company's 8-K filed today.
Schering-Plough is a global science-based health care company with
leading prescription, consumer and animal health products. Through internal
research and collaborations with partners, Schering-Plough discovers,
develops, manufactures and markets advanced drug therapies to meet
important medical needs. Schering-Plough's vision is to earn the trust of
the physicians, patients and customers served by its approximately 33,500
people around the world. The company is based in Kenilworth, N.J., and its
Web site is www.schering-plough.com.
SCHERING-PLOUGH CORPORATION
Report for the third quarter ended September 30 (unaudited):
(Amounts in millions, except per share figures)
Third Quarter Nine Months
2007 2006 2007 2006
Net sales 1/ $2,812 $2,574 $8,965 $7,944
Cost of sales 2/ 925 885 2,838 2,782
Selling, general and administrative 1,262 1,158 3,833 3,467
Research and development 3/ 669 536 2,071 1,557
Other income, net 4/ (390) (37) (451) (89)
Special and acquisition related
charges 5/. 20 10 32 90
Equity income from cholesterol joint
venture (506) (390) (1,483) (1,056)
Income before income taxes 832 412 2,125 1,193
Income tax expense 82 103 272 275
Net income before cumulative effect
of a change in accounting
principle $750 $309 $1,853 $918
Cumulative effect of a change in
accounting
principle, net of tax 6/ - - - (22)
Net income $750 $309 $1,853 $940
Preferred stock dividends 37 22 80 65
Net income available to common
shareholders $713 $287 $1,773 $875
Diluted earnings per common share:
Earnings available to common
shareholders before cumulative
effect of a
change in accounting principle 7/ $0.45 $0.19 $1.15 $0.57
Cumulative effect of a change in
accounting
principle, net of tax 6/ - - - 0.02
Diluted earnings per common share 7/ $0.45 $0.19 $1.15 $0.59
Average common shares
outstanding - diluted 1,622 1,492 1,596 1,489
The company incurs substantial costs related to the cholesterol joint
venture, such as selling, general and administrative costs, that are not
reflected in the "Equity income from cholesterol joint venture" and are
borne by the overall cost structure of Schering-Plough.
1/ Net sales for the third quarter and nine months ended September 30,
2006, includes $47 million and $24 million, respectively, related to the
reversal of previously accrued rebate amounts for the U.S. Government's
TRICARE Retail Pharmacy Program that a U.S. Federal court ruled
pharmaceutical manufacturers were not obligated to pay.
2/ Included in costs of sales for the three and nine months ended
September 30, 2006 is $43 million and $101 million, respectively, related
to the manufacturing changes announced on June 1, 2006.
3/ Research and development for the three months ended September 30,
2007 includes $20 million related to an upfront payment made for licensing
of a product. Research and development for the nine months ended September
30, 2007 includes $176 million related to upfront payments made for
licensing of products.
4/ Included in other income, net for the three and nine months ended
September 30, 2007 are mark-to-market gains of $321 million and $289
million, respectively, from Euro denominated currency options related to
the planned acquisition of Organon BioSciences. Also included in other
income, net for both the three and nine months ended September 30, 2007 is
$7 million of losses resulting from interest rate hedge contracts also
related to the planned acquisition of Organon BioSciences.
5/ Included in special and acquisition related charges for the three
and nine months ended September 30, 2007 reflects $20 million and $32
million, respectively, related to the planned acquisition of Organon
BioSciences. Included in special and acquisition related charges for the
three and nine months ended September 30, 2006 is $10 million and $90
million, respectively, related to the manufacturing changes announced June
1, 2006.
6/ In the first quarter of 2006, Schering-Plough adopted the provisions
of SFAS 123R. As a result of this adoption, Schering-Plough recognized a
non- recurring cumulative effect adjustment of $22 million of income
associated with Schering-Plough's liability-based compensation plans.
7/ Diluted earnings per common share for the three month period ended
September 30, 2007 is calculated using a numerator of $731 million, which
is the arithmetic sum of net income available to common shareholders of
$713 million plus dividends of $18 million related to the 2004 preferred
stock which are dilutive, and a denominator of 1,622 which represents the
average diluted shares outstanding for the third quarter of 2007. Diluted
earnings per common share for the nine month period ended September 30,
2007 is calculated using a numerator of $1.834 billion, which is the
arithmetic sum of net income available to common shareholders of $1.773
billion plus dividends of $61 million related to the 2004 preferred stock,
and a denominator of 1,596 which represents the average diluted shares
outstanding for the nine months ended September 30, 2007. The increase in
average diluted shares outstanding in the three and nine months ended
September 30, 2007 is due to the 2004 preferred stock being dilutive under
accounting rules. The 2004 preferred stock was not dilutive for the three
and nine months ended September 30, 2006. The 2007 preferred stock was not
dilutive for the three and nine months ended September 30, 2007.
SCHERING-PLOUGH CORPORATION
Report for the period ended September 30 (unaudited):
GAAP Net Sales by Key Product
(Dollars in millions) Third Quarter Nine Months
2007 2006 % 2007 2006 %
GLOBAL PHARMACEUTICALS $2,291 $2,087 10% $7,209 $6,350 14%
REMICADE 426 317 34% 1,193 902 32%
NASONEX 242 221 10% 821 691 19%
PEGINTRON 221 206 7% 672 629 7%
TEMODAR 215 179 20% 627 513 22%
CLARINEX / AERIUS 171 171 - 625 557 12%
CLARITIN RX 83 74 12% 297 279 7%
INTEGRILIN 78 82 (4%) 241 244 (1%)
AVELOX 78 63 24% 269 201 34%
CAELYX 64 52 23% 191 156 22%
INTRON A 61 57 7% 176 180 (2%)
REBETOL 60 72 (16%) 206 237 (13%)
SUBUTEX / SUBOXONE 55 51 8% 163 152 7%
PROVENTIL / ALBUTEROL CFC 52 45 16% 166 148 12%
ELOCON 40 36 11% 119 108 10%
ASMANEX 36 28 30% 121 68 79%
FORADIL 25 22 13% 77 66 16%
NOXAFIL 24 6 N/M 60 10 N/M
Other Pharmaceuticals 360 405 (11%) 1,185 1,209 (2%)
CONSUMER HEALTH CARE 273 259 5% 1,012 918 10%
OTC 162 138 17% 521 440 18%
OTC CLARITIN 104 95 9% 368 318 16%
Foot Care 92 92 - 272 270 1%
Sun Care 19 29 (33%) 219 208 6%
ANIMAL HEALTH 248 228 8% 744 676 10%
CONSOLIDATED GAAP NET SALES
a/ $2,812 $2,574 9% $8,965 $7,944 13%
a/ Included in consolidated GAAP net sales for the three and nine month
periods ended September 30, 2006 were approximately $47 million and $24
million, respectively, related to the reversal of previously accrued rebate
amounts for the U.S. Government's TRICARE Retail Pharmacy Program that a
U.S. Federal court ruled pharmaceutical manufacturers were not obligated to
pay.
NOTE: Additional information about U.S. and international sales for
specific products is available by calling the company or visiting the
Investor Relations Web site at http://ir.schering-plough.com.
SCHERING-PLOUGH CORPORATION
Reconciliation of Non-U.S. GAAP Financial Measures
Adjusted net sales, defined as net sales plus an assumed 50 percent of
global cholesterol joint venture net sales.
Three months ended September 30
(Dollars in millions) (unaudited)
2007 2006 %
Net sales, as reported $2,812 $2,574 9%
50 percent of cholesterol joint
venture net sales a/ 639 505
Adjusted net sales b/ $3,451 $3,079 12%
Nine months ended September 30
(Dollars in millions) (unaudited)
2007 2006 %
Net sales, as reported $8,965 $7,944 13%
50 percent of cholesterol joint
venture net sales a/ 1,838 1,373
Adjusted net sales b/ $10,803 $9,317 16%
a/ Total net sales of the cholesterol joint venture for the three
months ended September 30, 2007 and 2006 were $1.3 billion and $1.0
billion, respectively. Total net sales of the cholesterol joint venture for
the nine months ended September 30, 2007 and 2006 were $3.7 billion and
$2.7 billion, respectively.
b/ Included in adjusted net sales for the three and nine month ended
September 30, 2006 are approximately $60 million and $32 million,
respectively, related to the reversal of previously accrued rebate amounts
for the U.S. Government's TRICARE Retail Pharmacy Program that a U.S.
Federal court ruled pharmaceutical manufacturers were not obligated to pay.
NOTE: Adjusted net sales, defined as net sales plus an assumed 50
percent of global cholesterol joint venture net sales, is a non-U.S. GAAP
measure used by management in evaluating the performance of the
Schering-Plough's overall business. Schering-Plough believes that this
performance measure contributes to a more complete understanding by
investors of the overall results of the company. Schering-Plough provides
this information to supplement the reader's understanding of the importance
to the company of its share of results from the operations of the
cholesterol joint venture. Net sales (excluding the cholesterol joint
venture net sales) is required to be presented under U.S. GAAP. The
cholesterol joint venture's net sales are included as a component of income
from operations in the calculation of Schering-Plough's "Equity income from
cholesterol joint venture." Net sales of the cholesterol joint venture do
not include net sales of cholesterol products in non-joint venture
territories.
SCHERING-PLOUGH CORPORATION
Reconciliation of Non-U.S. GAAP Financial Measures
Net income available to common shareholders and diluted earnings per
common share, excluding specified items
Three months ended Nine months ended
September 30, 2007 September 30, 2007
(unaudited) (unaudited)
Net income Diluted Net income Diluted
available earnings available earnings
to common per to common per
(Dollars in millions) shareholders common shareholders common
share(1) share(1)
As reported $713 $0.45 $1,773 $1.15
Specified items
-- Upfront R&D payments 20 0.01 176 0.11
-- Acquisition-related items
Gain on currency option (321) (289)
Integration planning costs 20 32
Ineffective portion of
interest rate swaps 7 7
Total acquisition- -
related items (294) (0.18) (250) (0.16)
Total specified items (274) (0.17) (74) (0.05)
Excluding specified items $439 $0.28 $1,699 $1.10
1/ Diluted earnings per common share for the three month period ended
September 30, 2007 is calculated using a numerator of $731 million, which
is the arithmetic sum of net income available to common shareholders of
$713 million plus dividends of $18 million related to the 2004 preferred
stock which are dilutive, and a denominator of 1,622 which represents the
average diluted shares outstanding for the third quarter of 2007. Diluted
earnings per common share for the nine month period ended September 30,
2007 is calculated using a numerator of $1.834 billion, which is the
arithmetic sum of net income available to common shareholders of $1.773
billion plus dividends of $61 million related to the 2004 preferred stock,
and a denominator of 1,596 which represents the average diluted shares
outstanding for the nine months ended September 30, 2007. The increase in
average diluted shares outstanding in the three and nine months ended
September 30, 2007 is due to the 2004 preferred stock being dilutive under
accounting rules. The 2004 preferred stock was not dilutive for the three
and nine months ended September 30, 2006. The 2007 preferred stock was not
dilutive for the three and nine months ended September 30, 2007.
NOTE: Net income available to common shareholders and diluted earnings
per common share, excluding specified items are non-U.S. GAAP measures used
by management in evaluating the performance of Schering-Plough's overall
business. Upfront licensing payments and acquisition-related items have
been excluded from net income available to common shareholders as
Schering-Plough does not consider these charges to be indicative of
continuing operating results. Schering-Plough believes that these
performance measures contribute to a more complete understanding by
investors of the overall results of the company. Net income available to
common shareholders and diluted earnings per common share, as reported, are
required to be presented under U.S. GAAP.
SOURCE Schering-Plough Corporation
Back to top
RELATED LINKS
http://www.sch-plough.com
Custom Packages
Browse our custom packages or build your own to meet your unique communications needs.
PR Newswire Membership
Fill out a PR Newswire membership form or contact us at (888) 776-0942.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.
Featured Video
More in These Categories
Journalists and Bloggers
Visit PR Newswire for Journalists for releases, photos, ProfNet experts, and customized feeds just for Media.
View and download archived video content distributed by MultiVu on The Digital Center.
Free Investing Newsletter from Investor Uprising!
Learn to navigate the world's financial system and profit from leading companies.
Register for Investor Uprising, the people's investment site, for a free weekly newsletter, information, education and premium research including our latest IU Confidential Report - "All The Glitters: The Ultimate Gold Report".