SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 2-84723
THE SCHERING-PLOUGH PUERTO RICO EMPLOYEES' RETIREMENT SAVINGS
PLAN
Schering-Plough Corporation
One Giralda Farms
P.O. Box 1000
Madison, New Jersey 07940
THE SCHERING-PLOUGH PUERTO RICO
EMPLOYEES' RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
as of December 31, 1997 and 1996 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1997 3
Notes to Financial Statements 4 - 7
SUPPLEMENTAL SCHEDULES: SCHEDULE
Schedule of Assets Held for Investment Purposes
December 31, 1997 I
Schedule of Transactions in Excess of 5%
of Plan Assets for the Year Ended December 31, 1997 II
EXHIBITS:
Exhibit I Independent Auditors' Consent
Supplemental schedules not included herein are omitted due to the
absence of conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
The Schering-Plough Puerto Rico Employees' Retirement Savings
Plan:
We have audited the accompanying statements of net assets
available for benefits of The Schering-Plough Puerto Rico
Employees' Retirement Savings Plan (the "Plan") as of
December 31, 1997 and 1996, and the related statement of changes
in net assets available for benefits for the year ended December
31, 1997. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Plan as of December 31, 1997 and
1996, and the changes in net assets available for benefits for
the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules of Assets Held for Investment Purposes
and Transactions in Excess of 5% of Plan Assets are presented
for the purpose of additional analysis and are not a required
part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These schedules are the
responsibility of the Plan's management. Such schedules have
been subjected to the auditing procedures applied in our audit
of the basic 1997 financial statements and, in our opinion, are
fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
_________________________________________
/s/ Deloitte & Touche LLP
San Juan, Puerto Rico
May 8, 1998
THE SCHERING-PLOUGH PUERTO RICO
EMPLOYEES' RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
1997 1996
Vanguard Index Trust 500 Portfolio Fund $ 5,228,436 $3,962,617
Vanguard Windsor Fund 2,610,599 2,078,110
Vanguard Treasury Money Market Portfolio 1,296,315 1,299,422
Vanguard Fixed Income Securities Short-
Term Corporate Portfolio Fund 364,238 396,869
Vanguard Wellington Fund 97,393 43,719
Vanguard International Growth Portfolio
Fund 69,267 64,787
Vanguard Explorer Fund 52,893 40,699
Total Vanguard Registered Investment
Company Shares 9,719,141 7,886,223
Schering-Plough Stock Fund 2,448,942 690,264
Loan Fund 1,173,039 919,260
Participants' Receivables - 101,818
NET ASSETS AVAILABLE FOR BENEFITS $13,341,122 $9,597,565
See notes to financial statements.
THE SCHERING-PLOUGH PUERTO RICO
EMPLOYEES' RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividends $ 725,359
Net appreciation in fair value
of investments 2,189,056
Total 2,914,415
Participants' contributions 1,552,471
Other receipts - rollovers and other
transfers in 5,031
Total additions 4,471,917
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefit payments 728,360
Total deductions 728,360
NET INCREASE 3,743,557
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 9,597,565
End of year $13,341,122
See notes to financial statements.
THE SCHERING-PLOUGH PUERTO RICO
EMPLOYEES' RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. GENERAL
The Schering-Plough Puerto Rico Employees' Retirement
Savings Plan (the "Plan") is a defined contribution plan
established effective March 1, 1990. The Plan is intended
to encourage retirement savings by eligible employees of
Schering-Plough Products, Inc. (the "Sponsor") and any of
its affiliated companies that adopts the Plan. Vanguard
Fiduciary Trust Company ("VFTC"), the trustee, is a trust
company incorporated under Chapter 10 of the Pennsylvania
Banking Code, and a wholly-owned subsidiary of The Vanguard
Group, Inc. ("Vanguard").
All Puerto Rico employees of Schering-Plough Products, Inc.
and Schering-Plough del Caribe, Inc. are eligible to
participate in the Plan on the date of employment. There
were 944 and 957 participants in the Plan at December 31,
1997 and 1996, respectively. The participants may elect to
have their salary deferral contributions allocated to any of
the investment funds available under this Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared on the
accrual basis in accordance with generally accepted
accounting principles and the financial reporting
requirements of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of
registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by
the Plan at year end.
The Schering-Plough Stock Fund is valued using the unit
accounting method whereby a participant's account value is
expressed in units of participation rather than number of
shares of Schering-Plough common stock. At December 31,
1997 and 1996, there were 4,369 and 2,359 units of
participation in the Schering-Plough Stock Fund,
respectively. The net asset value per unit was $560.51 and
$292.66 at December 31, 1997 and 1996, respectively.
Purchases and sales of securities are recorded on a trade-
date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date, and
reinvested in Schering-Plough common stock units.
Payment of Benefits
Benefit payments are recorded when paid.
3. PLAN DESCRIPTION
The following is a description of the Plan for general
information purposes. Participants should refer to the Plan
document for more complete information.
Salary Deferral Contributions
The Plan is designed to permit eligible employees to elect
to have a portion of their salary contributed to the Plan on
their behalf ("salary deferral contributions"). Under the
provisions of the Plan, salary deferral contributions can
range from 1% to 10% of the employee's earnings, in
increments of 1%, subject to certain limitations. Salary
deferral contributions and any earnings accrued thereon are
fully and immediately vested to the participant.
Participant Accounts
Each participant's account is credited with the
participant's contribution and allocations of Plan earnings.
Allocations are based on participant earnings or account
balances, as defined. Participants have a nonforfeitable
right to their contributions plus actual earnings thereon
which vest fully and immediately.
Investment Options
Upon enrollment in the Plan, a participant may direct their
contributions into any of the following Vanguard investment
options:
- Index Trust 500 Portfolio Fund - Designed to provide
returns which correspond to the performance of Standard & Poor's
500 Composite Stock Price Index.
- Windsor Fund - Primarily equity securities with the
objective of providing long-term capital growth.
- Treasury Money Market Portfolio - Exclusively U.S. Treasury
securities with maturities of 13 months or less with the
objective of providing current income based on current market
interest rates, with preservation of principal and liquidity.
- Fixed Income Securities Short-Term Corporate Portfolio Fund
- A diversified portfolio primarily consisting of short-term
corporate bonds.
- - Wellington Fund - Primarily equity and fixed income
securities with the objective of providing current income and
capital appreciation.
- - International Growth Portfolio Fund - A non-U.S. equity
portfolio, primarily investing in securities of issuers within
Europe, Asia and the Far East.
- - Explorer Fund - Primarily equity securities of smaller
companies with the objective of providing above average capital
appreciation but with a potentially higher level of risk.
Schering-Plough Stock Fund
Invests in Schering-Plough Corporation common shares to
provide the possibility of long-term growth through
increases in the market value of the shares and the
reinvestment of dividends. Participants are limited to a
maximum investment election of 50% of the Salary Deferral
Contributions in this fund.
Loan Fund
The Plan allows participants to borrow against their fund
accounts up to a maximum of the lesser of one half of their
account or $50,000. These loans, which are secured by the
participants' individual fund accounts, bear a fixed rate of
interest as determined to be reasonable by The Schering-
Plough Puerto Rico Employees' Savings Plan Committee, and
are repayable over periods not exceeding five years, except
loans relating to a principal residence which are repayable
over a period not to exceed 20 years.
Payment of Benefits
On termination of service due to retirement or disability, a
participant may elect to receive either a lump-sum amount or
annual installments not to exceed the life expectancy of the
participant or the life expectancy of the beneficiary. For
termination of service due to other reasons, a participant
may receive the value of the account as a lump sum
distribution. Distribution of all or a portion of a
participant's account, prior to termination of employment,
may be granted by the Company in the case of financial
hardship.
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the
Sponsor has the right to terminate the Plan subject to
provisions of ERISA.
5. TAX STATUS
In March 1992, the Plan received a favorable determination
letter issued by the Puerto Rico Department of Treasury as
to the Plan's qualified status under Sections 165(a) and (e)
of the Puerto Rico Income Tax Act of 1954, as amended. As
long as the Plan is qualified under Puerto Rico income tax
laws and regulations, participants will not be taxed on
salary-deferred contributions or on investment earnings on
such contributions at the time such contributions and
investment earnings are received by the trustee under the
Plan, but will be subject to tax thereon at such time as
they receive distributions from the Plan.
6. ADMINISTRATION OF PLAN ASSETS
Contributions are held and managed by the trustee, VFTC,
which invests cash received, interest and dividend income
and makes distributions to the participants. The trustee
also administers the collection of interest and principal on
the participant loans.
Certain administrative functions are performed by officers
or employees of the Sponsor. No such officer or employee
receives compensation from the Plan.
All plan administration expenses are borne by the Sponsor.
7. FUND INFORMATION
Investment income, contributions and benefit payments are as follows for the
year ended December 31, 1997:
Vanguard
Fixed
Income
Vanguard Vanguard. Securiti Vanguard
Index Treasury es Short- Inter- Scheri
Trust Vanguard Money Term Vanguard nationa Vangua ng-
500 Windsor Market Corporate Wellingt l rd Plough Loan
Portfolio Fund Portfolio on Fund Growth Explor Stock Fund Total
Fund Portfolio Portfol er Fund
Fund io Fund Fund
Investment
Income:
Interest
and
dividends $108,701 $407,002 $65,533 $23,038 $7,959 $2,835 $5,072 24,044 $81,175 $725,359
Net
appreciati
on
(depreciat
ion) in
fair
value of 1,197,867 50,700 - 1,838 6,805 1,736 (313) 930,423 - 2,189,056
investment
s
Total
Investment
Income $1,306,568 $457,702 $65,533 $24,876 $14,764 $4,571 $4,759 $954,467 $81,175 $2,914,415
Participants'
Contributi $546,668 $412,383 $159,163 $73,658 $33,304 $28,258 $16,566 $282,471 - $1,552,471
ns
Other
receipts -
Rollovers
and
Transfers $ 1,258 $1,258 - - - - - $2,515 - $5,031
In
Benefits
Paid to
Participan $264,951 $143,338 $140,501 $36,860 $2,493 $22,071 $495 $67,679 $49,972 $728,360
ts
******
THE SCHERING-PLOUGH PUERTO RICO
EMPLOYEES' RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
Identity Shares/ Current
of issue Participants Units Cost Value
Vanguard Index
Trust 500
Portfolio Fund* 713 58,049 $3,194,508 $5,228,436 (1)
Vanguard Windsor
Fund* 529 153,746 2,483,929 2,610,599 (1)
Vanguard Treasury
Money Market
Portfolio* 398 1,296,315 1,296,315 1,296,315 (1)
Vanguard Fixed
Income Securities
Short-Term
Corporate
Portfolio Fund* 179 33,695 361,577 364,238
Vanguard
Wellington Fund* 71 3,307 91,213 97,393
Vanguard
International
Growth Portfolio
Fund* 59 4,226 71,981 69,267
Vanguard Explorer
Fund* 52 956 53,145 52,893
Schering-Plough
Stock Fund 420 4,369(2) 1,515,585 2,448,942 (1)
Outstanding loan
balance -various
loans; 7% to 10%,
due in one year to
five years 361 1,173,039 1,173,039(1)
Total investments $10,241,292 $13,341,122
*Registered Investment Company.
(1) Indicates investment represents five percent or more of the
net assets available for benefits.
(2) Represents Schering-Plough Stock Fund units.
THE SCHERING-PLOUGH PUERTO RICO
EMPLOYEES' RETIREMENT SAVINGS PLAN
ITEM 27D - SCHEDULE OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
YEAR ENDED DECEMBER 31, 1997
Identity Cost of Number of Proceeds Number Net
of Issue Purchases Purchases From Sales of Sales Gain
Vanguard
Index Trust
500 Portfolio
Fund $1,069,847 84 $1,001,894 105 $345,185
Vanguard Windsor
Fund 1,192,652 84 710,863 94 122,025
Vanguard Treasury
Money Market
Portfolio 541,736 110 544,843 98 -
Schering-Plough
Stock Fund 1,084,017 115 255,762 54 78,051
EXHIBIT I
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statements No. 2-83963, No. 33-19013, No. 33-50606 and No. 333-
30331 on Form S-8, Registration Statement No. 333-853 on Form S-
3, Post-Effective Amendment No. 1 to Registration Statement No.
2-84723 on Form S-8, Post-Effective Amendment No. 1 to
Registration No. 2-80012 on Form S-3, Post-Effective Amendment
No. 1 to Registration Statement No. 2-77740 on Form S-3 and
Registration Statements No. 333-12909 and No. 333-30355 on Form
S-3 of our report dated May 8, 1998 appearing in this Annual
Report on Form 11-K of The Schering-Plough Puerto Rico
Employees' Retirement Savings Plan for the year ended December
31, 1997.
__________________________________________
/s/ Deloitte & Touche LLP
San Juan, Puerto Rico
June 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the plan)
have duly caused this Annual Report to be signed on its behalf
by the undersigned hereunto duly authorized.
Schering-Plough Puerto Rico Employees' Retirement Savings Plan
Date: June 17, 1998 By /s/ Vincent Sweeney
Vincent Sweeney
Plan Administrator