[Schering-Plough Letterhead]
EXHIBIT 99.1
FOR RELEASE: IMMEDIATELY Media Contact: Steve Galpin, Jr.
(908) 298-7415
Investor Contacts: Alex Kelly
Janet M. Barth
(908) 298-7436
SCHERING-PLOUGH REPORTS FINANCIAL RESULTS
FOR 2004 FOURTH QUARTER, FULL YEAR
KENILWORTH, N.J., Jan. 25, 2005 - Schering-Plough Corporation (NYSE: SGP) today
reported financial results for the 2004 fourth quarter and full year.
"We made enormous progress on the Stabilize and Repair phases of our
six-to-eight year Action Agenda," said Fred Hassan, Schering-Plough chairman and
CEO. "In 2004, the company managed severe top-line challenges while making
critical investments in our long-term future. As we go into 2005, we are seeing
the beginnings of top-line growth, with quarterly sales comparisons gradually
moving into positive territory. In my experience, it is exceptionally
challenging to turn negative sales momentum into positive performance. We are
proud of this accomplishment. We now intend to drive this trend into bottom-line
growth - through excellent execution, strategic investments, cost consciousness
and sales dynamism. And we continue to anticipate beginning a turnaround later
this year."
Hassan highlighted some of Schering-Plough's major accomplishments in 2004
to transform the company into a long-term, high-performance competitor:
- The on-time U.S. approval in July and successful launch of the
cholesterol-lowering medicine VYTORIN while growing ZETIA to $1 billion in
sales;
- Continued progress in fulfilling consent decree obligations with the U.S.
Food and Drug Administration (FDA), completing 161 of 212 significant
steps and 22 of 33 validation actions without incurring any additional
payments for missed deadlines;
- Resolution of several major legacy issues, including the U.S. Attorney's
Office for the Eastern District of Pennsylvania and the U.S. Department of
Justice;
- Gaining greater financial flexibility by strengthening its balance sheet
through the successful issuance of Mandatory Convertible Preferred Stock
in August; and
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- Expanding the company's product line and research portfolio through
internal R&D advances and licensing and strategic agreements with Bayer,
Toyama Chemical Co. Ltd. and ViroPharma Incorporated.
"On the product front, the year's major milestone was without question the
on-time U.S. approval and the successful launch of the cholesterol-lowering
medicine VYTORIN," said Hassan. "With its dual inhibition of the two sources of
cholesterol, VYTORIN offers patients a powerful new treatment option for
reducing cholesterol levels." He said VYTORIN is being well accepted by managed
care organizations, reflecting the product's unique profile and attractive value
proposition of high efficacy and competitive pricing. "We estimate that VYTORIN
has open or second tier managed care access for more than 75 percent of all U.S.
covered lives, which is a huge accomplishment in such a short time frame," added
Hassan.
"It is also worth noting that at this time last year, we reported that
ZETIA sales were annualizing at more than $600 million. Now, with Vytorin
launched, sales of our cholesterol franchise are annualizing at significantly
in excess of $1 billion. ZETIA and VYTORIN represent two of the industry's
major product launches in recent years. The cholesterol market is well
- -established and the success of our cholesterol franchise remains pivotal to
our turnaround." he said.
VYTORIN (ezetimibe/simvastatin), a new once-daily, cholesterol-lowering
therapy marketed in partnership with Merck & Co., Inc. (Merck), contains ZETIA
(ezetimibe), a cholesterol-absorption inhibitor discovered by Schering-Plough,
and Merck's Zocor (simvastatin) statin product. VYTORIN is the first single
tablet to provide powerful LDL cholesterol reduction through dual inhibition of
the two sources of cholesterol by inhibiting the production of cholesterol in
the liver and blocking the absorption of cholesterol in the intestine, including
cholesterol from food. VYTORIN has been shown to lower LDL cholesterol by 52
percent at the recommended starting dose (10/20 mg) and 60 percent at the
maximum dose (10/80 mg). In head-to-head trials, VYTORIN provided superior
reductions in LDL cholesterol versus current market leaders atorvastatin
(Pfizer's Lipitor(R)) and simvastatin (Zocor) across the dosing range. Results
of a clinical trial reported in October 2004 showed that 82 percent of high-risk
patients taking VYTORIN achieved their LDL goal of less than 100 versus only 47
percent for Lipitor at the usual starting doses of each therapy.
Schering-Plough achieved further progress in broadening its product
portfolio with several regulatory actions in 2004. The company's PEG-INTRON and
REBETOL combination therapy for hepatitis C in December became the first
pegylated interferon combination therapy to be available in Japan. Other
products gaining approvals for additional indications or formulations included
REMICADE, a treatment for immune-mediated inflammatory disorders, in the
European Union (EU) and, in the United States, the allergy medicines NASONEX and
CLARINEX. In addition, U.S. and EU regulatory applications were filed seeking
marketing approval for the systemic antifungal posaconazole and for a new
indication for the brain cancer treatment TEMODAR.
Throughout the year, Schering-Plough aggressively pursued cost reductions
and greater efficiencies while working to upgrade the company's global
infrastructure. "We reinvested much of
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those savings, and I believe that a key factor in the success of the VYTORIN
launch was the investment we made in advance to expand and train our U.S. sales
force," he said.
"During 2004, we did what we said we would do," he said. "We go into 2005
with much accomplished and still much work ahead."
On the growing public concern about the general safety of medicines,
Hassan commented, "Today our entire industry confronts a special challenge in
the form of new, heightened caution among regulators, prescribers and patients.
In this new environment, our fundamental commitment to building business
integrity, quality and compliance in the New Schering-Plough is especially
relevant."
Regarding the American Jobs Creation Act of 2004, the company offered the
following comment: "We are pleased by the passage of this important
legislation," said Hassan. "While this legislation will require a tax
charge, it will also allow us to repatriate significant foreign funds for
productive purposes in the United States, in line with the intent of the
legislation," he added.
FOURTH QUARTER 2004 RESULTS
Schering-Plough reported a net loss available for common shareholders of $856
million in the 2004 fourth quarter or 58 cents in diluted loss per common share
compared with a loss in the 2003 period of $181 million or 12 cents per share.
The net loss available for common shareholders and loss per share in the 2004
fourth quarter reflected a tax provision of $807 million, or 55 cents per share,
relating primarily to the recently enacted tax legislation - the American Jobs
Creation Act of 2004 - which allows companies to repatriate funds held by
foreign subsidiaries to the United States at a much-reduced tax rate.
Fourth quarter 2004 net sales of $2.2 billion were 12 percent higher than
the 2003 period and included a favorable foreign exchange impact of 4 percent.
The fourth quarter sales increase was led by U.S. and international product
growth, the sales contribution from Bayer products and the positive impact from
currency exchange.
The company noted that net sales under U.S. Generally Accepted Accounting
Principles (GAAP) does not include sales of the cholesterol products marketed
in partnership with Merck, as the company accounts for the cholesterol joint
venture under the equity method as described below. Global cholesterol joint
venture net sales, which include VYTORIN and ZETIA, totaled approximately $400
million in the 2004 fourth quarter, up more than 140 percent from approximate
net sales of $163 million in the comparable 2003 period. U.S. cholesterol joint
venture net sales for the period totaled $333 million compared with $144
million in 2003, up 131 percent. VYTORIN (also marketed as INEGY and ZINTREPID)
has now been approved in 25 countries, including the United States, and ZETIA
(also marketed as EZETROL and ZIENT) in 72 countries. Overall, the company
shares in approximately 50 percent of the profits of the joint venture with
Merck, although there are different profit sharing arrangements for the
cholesterol
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products in countries around the world. Accordingly, including an adjustment of
an assumed 50 percent of global cholesterol joint venture net sales (see note
and table below), Schering-Plough's adjusted net sales for the fourth quarter of
2004 would have totaled $2.4 billion, an increase of $354 million or 17 percent,
as compared to $2.0 billion on a similar adjusted basis in the fourth quarter of
2003.
The company utilizes the equity method of accounting for its cholesterol
joint venture with Merck. Under the equity method, the company records its share
of the operating profits less its share of the research and development costs in
"Equity income from cholesterol joint venture." "Equity income from cholesterol
joint venture" for Schering-Plough totaled $98 million in the 2004 fourth
quarter versus $33 million in the fourth quarter of 2003. The company 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 the overall cost structure of Schering-Plough.
On a reported basis, fourth quarter 2004 sales of Prescription
Pharmaceuticals, which do not include sales of the cholesterol joint venture,
totaled $1.7 billion, up 15 percent, with a favorable foreign exchange impact
of 4 percent. Consumer Health Care sales declined 4 percent to $217 million.
Animal Health sales grew 8 percent to $230 million, reflecting solid growth
across core brands and a favorable foreign exchange impact of 5 percent.
Among prescription products recording higher sales in the 2004 fourth
quarter were TEMODAR, a treatment for certain types of brain tumors, and
REMICADE, a treatment for immune-mediated inflammatory disorders that
Schering-Plough markets in countries outside the United States (excluding Japan
and certain Far East markets) for rheumatoid arthritis, psoriatic arthritis,
Crohn's disease and ankylosing spondylitis. TEMODAR sales totaled $150 million
in the 2004 fourth quarter, up 72 percent, benefiting from increased market
penetration. Sales for REMICADE rose 33 percent to $212 million, due primarily
to greater demand and expanded indications. Also posting higher sales in the
quarter was CAELYX, for the treatment of ovarian cancer, metastatic breast
cancer and Kaposi's sarcoma, up 25 percent to $40 million, largely as a result
of increased use in treating breast cancer.
Also contributing to 2004 fourth quarter net sales growth were products
under the strategic agreement with Bayer, which became effective on Oct. 1,
2004. Under the agreement, Schering-Plough gained exclusive rights in the United
States and Puerto Rico to market, sell and distribute Bayer's AVELOX and CIPRO
antibiotics and to undertake Bayer's U.S. commercialization activities for the
erectile dysfunction medicine LEVITRA under Bayer's co-promotion agreement with
GlaxoSmithKline PLC. In the Japanese market, Bayer will co-market
Schering-Plough's cholesterol absorption inhibitor ZETIA when approved. Sales of
the Bayer products totaled $91 million in the quarter, reflecting harmonization
of trade inventory practices coupled with a mild respiratory season.
Schering-Plough records its share of LEVITRA results as alliance revenue within
net sales.
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In the company's prescription allergy business, global CLARINEX sales in
the fourth quarter of 2004 were $162 million, up 22 percent. Sales of CLARINEX
outside the United States rose 38 percent to $55 million in the fourth quarter
due to market share gains and continued conversion from prescription CLARITIN.
U.S. CLARINEX sales increased 15 percent to $107 million, benefiting from
favorable comparisons of trade inventory adjustments. Global NASONEX sales rose
10 percent to $145 million, with U.S. sales climbing 5 percent to $81 million.
In international markets, NASONEX sales were up 17 percent to $64 million as a
result of market share gains and market growth.
Although the company's hepatitis C products showed signs of market share
stabilization in the 2004 fourth quarter, product sales declined versus the
year-ago period due to ongoing competition in a contracting market and increased
U.S. generic competition for REBETOL. Fourth quarter global sales of PEG-INTRON
were down 15 percent to $138 million; sales of REBETOL were down 51 percent to
$49 million.
In Consumer Health Care, sales of OTC CLARITIN were down 22 percent to $75
million, primarily reflecting increased private label competition. Sales of foot
care products rose 16 percent to $79 million, benefiting from higher sales of
DR. SCHOLL'S FREEZE AWAY wart remover product.
The company's gross margin at 62.1 percent for the 2004 fourth quarter was
flat compared to the 2003 period. Schering-Plough said its ongoing focus on
operational excellence in all key functions, including compliance and quality,
continues to increase the overall cost structure of the company.
Selling, general and administrative expenses rose 25 percent to $1.0
billion in the fourth quarter of 2004 versus the prior year, primarily
reflecting the previously announced field force expansions to prepare for the
U.S. launch of VYTORIN and the addition of more than 800 Bayer sales
representatives, coupled with increased promotional spending and Bayer
integration costs.
Research and development spending for the 2004 fourth quarter totaled $406
million, up 3 percent.
The "Other, net" line primarily reflects higher interest expense from
increased borrowings stemming from the long-term debt issued in the 2003 fourth
quarter, offset by higher interest income related to higher cash and cash
equivalent balances resulting from the August 2004 issuance of $1.4 billion in
Mandatory Convertible Preferred Stock.
In the fourth quarter of 2004, the company recorded a tax provision of
$807 million, which includes an accrual for tax at the reduced rate under the
American Jobs Creation Act of 2004. This Act applies a tax rate of 5.25 percent
on qualifying repatriations of funds versus the normal tax rate of 35 percent.
The company intends to repatriate approximately $9.4 billion of previously
unremitted foreign
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earnings under the Act. Also included in the fourth quarter tax provision is a
valuation allowance associated with certain deferred tax assets resulting from
changes in company tax planning strategies triggered by the opportunity to take
full advantage of the Act.
RECENT DEVELOPMENTS
The company also offered the following summary of recent significant
developments, including:
- Launched PEG-INTRON in Japan for use in combination with REBETOL Capsules
for the treatment of chronic hepatitis C - the first and only pegylated
interferon-based combination therapy available in Japan (announced Dec.
10, 2004). An estimated 1.5 to 2 million Japanese are chronically infected
with hepatitis C.
- Reached an agreement with NeoGenesis Pharmaceuticals, Inc. of Cambridge,
Mass., (announced Jan. 20, 2005) for Schering-Plough to acquire most of
NeoGenesis' assets, subject to normal closing conditions. Financial terms
of the transaction were not disclosed. NeoGenesis is a privately held
biopharmaceutical company focused on applying novel screening and
chemistry technologies to discover and develop small molecule drugs.
Schering-Plough and NeoGenesis have had a research collaboration since
1999.
- Merck/Schering-Plough Pharmaceuticals announced on Nov. 9, 2004, a large
scale clinical outcomes trial to be conducted for VYTORIN. The trial,
known as IMPROVE IT (Improved Reduction of Outcomes: VYTORIN Efficacy
International Trial), will evaluate the risk reduction provided by VYTORIN
10/40 mg as compared to Zocor (simvastatin) 40 mg in reducing death and
major coronary events in approximately 10,000 patients with acute coronary
syndromes (ACS). The intent of the study is to evaluate the incremental
reductions in cardiovascular events in these patients that VYTORIN may
provide as compared to simvastatin alone.
- Merck/Schering-Plough Pharmaceuticals announced on Oct. 28, 2004, results
from a clinical trial conducted in 1,902 patients with high cholesterol
showing that VYTORIN provided greater reduction in LDL ("bad") cholesterol
across the dosing ranges compared to Lipitor. At the most commonly used
starting doses of these two therapies, VYTORIN 10/20 mg decreased LDL
cholesterol by 51 percent compared with 36 percent for Lipitor 10 mg
(p<0.001). The results were presented at the 15th International Symposium
on Drugs Affecting Lipid Metabolism (DALM), in Venice, Italy.
- Gained U.S. approval for use of NASONEX Nasal Spray, 50 mcg for the
treatment of nasal polyps in patients 18 years of age and older (announced
Dec. 15, 2004). This represents the first and only FDA-approval of a nasal
inhaled steroid for the treatment of this condition prior to
- 7 -
surgery.
- Reported U.S. availability of new scent-free, alcohol-free formulation of
NASONEX Nasal Spray, 50 mcg. (announced Jan. 12, 2005).
- Reported results on Oct. 31, 2004, of a pivotal investigative clinical
study of posaconazole oral suspension for invasive fungal infections,
which showed that posaconazole was successful in treating a wide range (20
species) of fungal infections and may have broad clinical use in the
treatment of infections when other therapies have failed. The results were
reported at the 44th Annual Interscience Conference on Antimicrobial
Agents and Chemotherapy (ICAAC).
- Expanded CLARITIN nonsedating antihistamine line in Japan with the
introduction of instantly dissolving CLARITIN REDITABS (announced Nov. 24,
2004).
- Received six-month priority review from FDA (announced Oct. 29, 2004) of a
Supplemental New Drug Application for TEMODAR in the treatment of gliomas,
a form of brain tumors. The application was submitted to FDA in September
2004.
- Filed an application with the European Medicines Agency (EMEA) (announced
Nov. 3, 2004) seeking centralized Marketing Authorization in the European
Union (EU) for the use of TEMODAL Capsules (sold as TEMODAR in the United
States) for the treatment of patients with newly diagnosed glioblastoma
multiforme concomitantly with radiotherapy and then as adjuvant treatment.
Glioblastoma multiforme is a form of brain tumor.
FOURTH QUARTER 2004 CONFERENCE CALL AND WEBCAST
Schering-Plough will conduct a conference call today at 8 a.m. (ET) to review
the 2004 fourth quarter and full year results. To listen live to the call, dial
1-877-565-9664 or 1-706-634-5003. A replay of the call will be available
starting at approximately 11 a.m. on Jan. 25 through 5 p.m. on Jan. 27. To
listen to the replay, dial 1-800-642-1687 or 1-706-645-9291 and enter the
conference ID # 2568524.
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 at approximately 11
a.m. on Jan. 25 through 5 p.m. on Jan. 31.
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 company's overall business.
The company believes that this performance measure contributes to a more
complete understanding by investors of the overall results of the company. The
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company 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 operating profits in the calculation of the company's
"Equity income from cholesterol joint venture."
DISCLOSURE NOTICE: The information in this press release includes certain
"forward-looking" statements within the meaning of the Securities Litigation
Reform Act of 1995 relating to the company's business prospects, trends in top
and bottom line performance, the timing of the anticipated turnaround and
resulting growth prospects, the future impacts of the American Jobs Creation Act
of 2004 and the potential of certain products including ZETIA, VYTORIN and
posaconazole. Forward-looking statements relate to expectations or forecasts of
future events and not to historical information. There are no guarantees about
any of the forward-looking statements, Schering-Plough stock or
Schering-Plough's business. Actual results may differ materially from
forward-looking statements due to a number of risks and uncertainties, including
the market viability of the company's (and the cholesterol joint venture's )
marketed and pipeline products; possible changes in business strategies and the
ability to successfully implement those business strategies; general market and
economic factors; regulations and legislation; label/use changes and concerns of
prescribers or patients relating to Schering-Plough products, other companies'
products or pharmaceutical products generally; existing and new manufacturing
issues that may arise; trade buying patterns; patent positions; litigation and
investigations; and instability or destruction in a geographic area important to
the company. For further details and a discussion of these and other risks and
uncertainties that may impact forward-looking statements, see Schering-Plough's
Securities and Exchange Commission filings, including the company's 8-K being
filed today. The company does not assume any obligation to update any
forward-looking statements.
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 more than 30,000 people around the world. The company is
based in Kenilworth, N.J., and its Web site is www.schering-plough.com.
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SCHERING-PLOUGH CORPORATION
Report for the fourth quarter and twelve months ended December 31 (unaudited):
(Amounts in millions, except per share figures)
Fourth Quarter Twelve Months
----------------------------- -------------------------
2004 2003 % 2004 2003 %
------- ------- ----- ------- ------- ---
Net Sales .................................................... $ 2,184 $ 1,948 12 $ 8,272 $ 8,334 (1)
Cost of Sales ................................................ 829 739 12 3,070 2,833 8
Selling, General
and Administrative ...................................... 1,026 821 25 3,811 3,474 10
Research and Development a/ .................................. 406 395 3 1,607 1,469 9
Other, Net ................................................... 33 10 N/M 146 59 N/M
Special Charges b/ ........................................... 15 229 (93) 153 599 (74)
Equity (Income) from
Cholesterol Joint Venture ............................... (98) (33) N/M (347) (54) N/M
------- ------- ------- -------
Loss Before Income Taxes ..................................... (27) (213) 87 (168) (46) N/M
Income Tax Expense/(Benefit) ................................. 807 (32) N/M 779 46 N/M
------- ------- ------- -------
Net Loss ..................................................... $ (834) $ (181) N/M $ (947) $ (92) N/M
======= ======= ======= =======
Dividends on Preferred Shares ................................ 22 - N/M 34 - N/M
------- ------- ------- -------
Net Loss Available for
Common Shareholders ...................................... $ (856) $ (181) N/M $ (981) $ (92) N/M
======= ======= ======= =======
Diluted Loss per Common Share ................................ $ (0.58) $ (0.12) N/M $ (0.67) $ (0.06) N/M
======= ======= ======= =======
Effective Tax Rate c/ ........................................ N/M 15.0% N/M N/M
Average Common Shares
Outstanding - Diluted ..................................... 1,473 1,470 1,472 1,469
Actual Number of Common Shares
Outstanding at December 31 ................................ 1,474 1,471 1,474 1,471
The Company noted that it incurs substantial costs, 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.
N/M - Not a meaningful percentage
a/ Research and development in the twelve months of 2004 includes an $80 million
upfront payment in conjunction with the licensing from Toyama Chemical Company
LTD. of garenoxacin, a quinolone antibiotic in development.
b/ Special Charges for the fourth quarter ended December 31, 2004 included $8
million of employee termination costs and $7 million of closure costs associated
with the exit from a small European research-and-development facility. Special
charges for the twelve months ended December 31, 2004 included $119 million of
employee termination costs, as well as $27 million of asset impairment charges
and $7 million of closure costs primarily related to the aforementioned
research-and-development facility. Special Charges for the fourth quarter of
2003 included $179 million of employee termination costs, primarily related to
the VERP in the United States, as well as $50 million of
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asset impairment charges related to certain fixed and intangible assets. Special
charges for the full year 2003 also included the $350 million provision to
increase litigation reserves recorded in the third quarter, as well as $20
million of asset impairment charges related to manufacturing facility assets
recorded in the second quarter.
c/ In the fourth quarter ended December 31, 2004, the Company recorded the
impact of the intended repatriation of funds under the American Jobs Creation
Act. For the full year 2003, the effective tax rate was 15% excluding the $350
million non-tax deductible provision to increase litigation reserves.
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SCHERING-PLOUGH CORPORATION
Report for the period ended December 31 (unaudited):
Net Sales by Major Product:
(Dollars in Millions)
Fourth Quarter Twelve Months
----------------------- ----------------------
2004 2003 % 2004 2003 %
------ ------ --- ------- ------ ---
GLOBAL PHARMACEUTICALS $1,737 $1,509 15 $ 6,417 $6,611 (3)
Remicade 212 159 33 746 540 38
Clarinex / Aerius 162 133 22 692 694 0
Temodar 150 87 72 459 324 42
Nasonex 145 132 10 594 500 19
PEG-Intron 138 162 (15) 563 802 (30)
Integrilin 81 46 75 325 306 6
Claritin Rx* 80 81 (1) 321 328 (2)
Intron A 79 107 (26) 318 409 (22)
Subutex 50 41 21 185 144 29
Rebetol 49 100 (51) 287 639 (55)
Avelox 44 -- N/M 44 -- N/M
Cipro 43 -- N/M 43 -- N/M
Elocon 42 33 27 168 154 9
Caelyx 40 32 25 150 111 35
Other Pharmaceuticals 422 396 7 1,522 1,660 (8)
CONSUMER HEALTH CARE 217 225 (4) 1,085 1,026 6
OTC 121 147 (17) 578 588 (2)
OTC Claritin 75 97 (22) 419 432 (3)
FOOT CARE 79 68 16 331 292 13
SUN CARE 17 10 68 176 146 20
ANIMAL HEALTH 230 214 8 770 697 10
CONSOLIDATED NET SALES $2,184 $1,948 12 $8,272 $8,334 (1)
====== ====== ======= ======
N/M - not a meaningful percentage
* Includes international sales of Claritin Rx only. Canadian sales of Claritin
are reported in the OTC Claritin line within Consumer Health Care. The prior
period has been reclassified accordingly.
NOTE: Certain prior period amounts have been reclassified to conform to the
current year presentation.
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.
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SCHERING-PLOUGH CORPORATION
Reconciliation of Non-U.S. GAAP Financial Measure
Adjusted net sales, defined as net sales plus an assumed 50 percent of global
cholesterol joint venture net sales.
Three-Months Ended December 31
(unaudited)
------------------------------
(Dollars in Millions) 2004 2003
- --------------------- ----- ------
NET SALES, AS REPORTED $2,184 $1,948
Net Sales, Cholesterol Joint Venture 400 163
50 percent of Cholesterol Joint Venture Net Sales 200 82
Adjusted net sales $2,384 $2,030
====== ======
Three-Months Ended September 30
(unaudited)
-------------------------------
(Dollars in Millions) 2004 2003
- --------------------- ------ -------
NET SALES, AS REPORTED $1,978 $ 1,998
Net Sales, Cholesterol Joint Venture 340 135
50 percent of Cholesterol Joint Venture Net Sales 170 68
Adjusted net sales $2,148 $ 2,066
====== =======
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 company's overall business. The
company believes that this performance measure contributes to a more complete
understanding by investors of the overall results of the company. The company
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 operating profits in the
calculation of the company's "Equity income from cholesterol joint venture."