Exhibit 99.1
News Release
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033-0530
For Release: IMMEDIATELY Contact: Denise K. Foy
(908) 298-7616
SCHERING-PLOUGH INCREASES LITIGATION RESERVES
KENILWORTH, N.J., Feb. 25, 2003 - Schering-Plough Corporation (NYSE: SGP) today announced it has increased its litigation reserves related to previously reported investigations by the United States Attorney's Offices for the District of Massachusetts and for the Eastern District of Pennsylvania into the company's marketing, sales and clinical trial practices by $150 million as a result of additional information and ongoing review of these matters. Accordingly, the company is changing its previously reported fourth quarter and full-year 2002 results to reflect the adjustment to its litigation reserves.
This change is reflected in the attached tables.
The increased litigation reserves reflect an adjustment to the company's estimate of its minimum liability relating to those investigations, in compliance with generally accepted accounting principles (GAAP). Under GAAP, companies are required to estimate and recognize a minimum liability when a loss is probable but no better estimate of the loss can be made. Also, under GAAP, the company is required to recognize this liability in its 2002 results. The company notes that its total reserve reflects an estimate and that any final settlement or adjudication of any of these matters could possibly be less than or could materially exceed the aggregate liability accrued by the company and could have a material adverse effect on the results of operations or financial condition of the company. This adjustment is consistent with the company's policy of reviewing regularly the status of pending actions and investigations and making adjustments as appropriate.
The company has previously disclosed information about these investigations in various financial filings, including Form 10-Q for the quarterly period ended Sept. 30, 2002. The company expects to file today a Form 8-K in conjunction with this press release.
DISCLOSURE NOTICE: The adjustment of the company's litigation reserves is based on the company's current understanding of the investigations and its estimate of possible outcomes, which may change from time to time. The reader of this release should understand that any settlement or adjudication of these investigations could include the commencement of civil and/or criminal proceedings involving the imposition of substantial fines materially in excess of the amounts accrued, penalties and injunctive or administrative remedies resulting from exclusion from government reimbursement programs, and furthermore that such resolution of these matters, individually or in the aggregate, could have a material adverse effect on the company's results of operations or financial condition. For further details and a discussion of these and other risks and uncertainties, see the company's 2001 annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K.
Schering-Plough is a research-based company engaged in the discovery, development, manufacturing and marketing of pharmaceutical products worldwide.
SCHERING-PLOUGH CORPORATION
(Amounts in millions, except per share figures)
| Fourth Quarter | | |
| | Reported | | Adjusted | | | |
| | 2002 | Adjustment | 2002 | | | |
| | | | | | | |
| | | | | | | |
Net Sales | $2,370 | | $2,370 | | | |
Costs and Expenses: | | | | | | |
Cost of Sales | 607 | | 607 | | | |
Selling, General and Administrative | 897 | | 897 | | | |
Research and Development | 409 | | 409 | | | |
Other, Net | (98) | $ 150 | 52 | | | |
| | | | | | |
| 1,815 | 150 | 1,965 | | | |
| | | | | | | |
Income Before Income Taxes | 555 | (150) | 405 | | | |
Income Taxes | 127 | (35) | 92 | | | |
Net Income | $ 428 | $ (115) | $ 313 | | | |
| | | | | | | |
Diluted Earnings per | | | | | | |
Common Share | $ 0.29 | $(0.08) | $ 0.21 | | | |
| | | | | | |
Effective Tax Rate | 23.0% | | 23.0% | | | |
Average Common Shares Outstanding - Diluted | 1,469 | | 1,469 | | | |
SCHERING-PLOUGH CORPORATION
(Amounts in millions, except per share figures)
| Twelve Months | | |
| | Reported | | Adjusted | | | |
| | 2002 | Adjustment | 2002 | | | |
| | | | | | | |
| | | | | | | |
Net Sales | $10,180 | | $10,180 | | | |
Costs and Expenses: | | | | | | |
Cost of Sales | 2,505 | | 2,505 | | | |
Selling, General and Administrative | 3,681 | | 3,681 | | | |
Research and Development | 1,425 | | 1,425 | | | |
Other, Net | (144) | $ 150 | 6 | | | |
| | | | | | | |
| | 7,467 | 150 | 7,617 | | | |
| | | | | | | |
Income Before Income Taxes | 2,713 | (150) | 2,563 | | | |
Income Taxes | 624 | (35) | 589 | | | |
Net Income | $2,089 | $(115) | $1,974 | | | |
| | | | | | | |
Diluted Earnings per | | | | | | |
Common Share | $ 1.42 | $(0.08) | $ 1.34 | | | |
| | | | | | |
Effective Tax Rate | 23.0% | | 23.0% | | | |
Average Common Shares Outstanding - Diluted | 1,470 | | 1,470 | | | |
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14-0203
