=====================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997 Commission File Number 1-1225
AMERICAN HOME PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2526821
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Giralda Farms, Madison, N.J. 07940
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 660-5000
Indicate by check mark whether the registrant (1) 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 (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
The number of shares of Common Stock outstanding as of the close of business on
April 30, 1997:
Number of
Class Shares Outstanding
Common Stock, $0.33-1/3 par value 643,734,341
======================================================================
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information 2
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets -
March 31, 1997 and December 31, 1996 3
Consolidated Condensed Statements of Income -
Three Months Ended March 31, 1997 and 1996 4
Consolidated Condensed Statements of Retained
Earnings and Additional Paid-in Capital -
Three Months Ended March 31, 1997 and 1996 5
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 6
Notes to Consolidated Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
Part II - Other Information 13
Item 1. Legal Proceedings 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
Exhibit Index EX-1
- 1 -
Part I - Financial Information
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
The consolidated condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations; however, the Company believes that
the disclosures are adequate to make the information presented not
misleading. In the opinion of management, the financial statements include
all adjustments necessary to present fairly the financial position of the
Company as of March 31, 1997 and December 31, 1996, the results of its
operations, its cash flows and the changes in retained earnings and
additional paid-in capital for the three months ended March 31, 1997 and
1996. It is suggested that these financial statements and management's
discussion and analysis of financial condition and results of operations be
read in conjunction with the financial statements and the notes thereto
included in the Company's 1996 Annual Report on Form 10-K.
- 2 -
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands Except Per Share Amounts)
March 31, December 31,
1997 1996
ASSETS
Cash and cash equivalents ...................... $1,024,624 $1,322,297
Marketable securities .......................... 5,690 221,820
Accounts receivable less allowances ............ 2,976,726 2,541,714
Inventories:
Finished goods ............................ 1,139,768 1,121,055
Work in progress .......................... 657,893 567,240
Materials and supplies .................... 657,148 701,074
2,454,809 2,389,369
Other current assets including deferred taxes .. 1,012,433 995,219
Total Current Assets ...................... 7,474,282 7,470,419
Property, plant and equipment .................. 6,371,357 6,254,666
Less accumulated depreciation ............. 2,284,722 2,217,933
4,086,635 4,036,733
Goodwill and other intangibles, net of
accumulated amortization .................. 8,759,434 8,517,610
Other assets including deferred taxes .......... 936,858 760,581
$21,257,209 $20,785,343
LIABILITIES
Loans payable .................................. $76,978 $76,574
Trade accounts payable ......................... 885,944 940,076
Accrued expenses ............................... 2,993,771 2,810,223
Accrued federal and foreign taxes .............. 466,313 510,762
Total Current Liabilities.................. 4,423,006 4,337,635
Long term debt ................................. 6,096,140 6,020,575
Other noncurrent liabilities ................... 2,473,386 2,486,375
Postretirement benefit obligation other
than pensions ............................. 790,524 782,342
Minority interests ............................ 218,183 196,324
STOCKHOLDERS' EQUITY
$2 convertible preferred stock, par value
$2.50 per share ........................... 77 79
Common stock, par value $0.33-1/3 per share .... 214,423 213,328
Additional paid-in capital ..................... 2,149,387 2,034,337
Retained earnings .............................. 5,065,455 4,756,270
Currency translation adjustments ............... (173,372) (41,922)
Total Stockholder's Equity ................ 7,255,970 6,962,092
$21,257,209 $20,785,343
The accompanying notes are an integral part of these balance sheets.
- 3 -
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended March 31,
1997 1996
Net Sales ................................... $3,603,019 $3,646,814
Cost of goods sold ..... .................... 1,031,938 1,205,954
Selling, general and administrative expenses 1,345,259 1,329,247
Research and development expenses ........... 372,045 338,312
Interest expense, net ....................... 97,047 118,573
Other income, net ........................... (45,449) (26,201)
Income before federal and foreign taxes ..... 802,179 680,929
Provision for taxes ......................... 225,502 191,566
Net Income .................................. $576,677 $489,363
Net Income Per Share of Common .............. $0.90 $0.78
Dividends per share of common stock ......... $0.41 $0.385
Average number of common shares outstanding
during the period used in the computation
of net income per share .................... 642,306 630,374
The accompanying notes are an integral part of these statements.
- 4 -
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF RETAINED EARNINGS
AND ADDITIONAL PAID-IN CAPITAL
(IN THOUSANDS)
Three Months Ended March 31,
RETAINED EARNINGS 1997 1996
Balance, beginning of period ................. $4,756,270 $3,875,224*
Add: Net income ............................. 576,677 489,363
5,332,947 4,364,587
Less: Cash dividends declared ................ 263,687 242,565
Cost of treasury stock acquired (less
amounts charged to capital) and other
items ................................. 3,805 9,325
267,492 251,890
Balance, end of period ....................... $5,065,455 $4,112,697
ADDITIONAL PAID-IN CAPTIAL
Balance, beginning of period ................. $2,034,337 $1,515,154
Add: Excess over par value of common stock
issued ................................. 115,319 130,733
Less: Cost of treasury stock acquired (less
amounts charged to retained earnings)... 269 631
Balance, end of period ....................... $2,149,387 $1,645,256
*Restated to reflect a two-for-one common stock split effective April 23, 1996.
The accompanying notes are an integral part of these statements.
- 5 -
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Three Months Ended March 31,
1997 1996
Operating Activities
Net income ..................................... $576,677 $489,363
Adjustments to reconcile net income to net
cash provided from operating activities:
Gains on sales of businesses and other
assets ........................................ (19,002) (22,144)
Depreciation and amortization.................. 177,777 166,139
Deferred income taxes ......................... (196,678) (40,810)
Changes in working capital, net ............... (442,566) (371,013)
Other, net .................................... 16,695 8,511
Net cash provided from operating activities .... 112,903 230,046
Investing Activities
Purchases of property, plant and equipment ..... (156,681) (171,710)
Purchases of businesses, net of cash acquired .. (460,000) -
Proceeds from sales of businesses and other
assets ........................................ 74,979 63,848
Proceeds from sales of/(purchases of) marketable
securities, net ............................... 216,322 (5,485)
Net cash used for investing activities ......... (325,380) (113,347)
Financing Activities
Net proceeds from/(repayments of) debt ......... 75,938 (51,054)
Dividends paid ................................. (263,687) (242,565)
Purchases of treasury stock .................... (2,668) (5,953)
Exercise of stock options ...................... 107,967 124,261
Net cash used for financing activities ......... (82,450) (175,311)
Effects of exchange rates on cash balances ..... (2,746) (782)
Decrease in cash and cash equivalents .......... (297,673) (59,394)
Cash and cash equivalents, beginning of period . 1,322,297 1,802,397
Cash and cash equivalents, end of period ....... $1,024,624 $1,743,003
The accompanying notes are an integral part of these statements.
Supplemental Information
Interest payments $132,664 $168,562
Income tax payments/(refunds), net 375,939 (56,903)
- 6 -
AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. Contingencies
The Company is involved in various legal proceedings, including
product liability and environmental matters of a nature considered
normal to its business. It is the Company's policy to accrue for
amounts related to these legal matters if it is probable that a
liability has been incurred and an amount is reasonably estimable.
In the opinion of the Company, although the outcome of any legal
proceedings cannot be predicted with certainty, the ultimate
liability of the Company in connection with these proceedings will
not have a material adverse effect on the Company's financial
position but could be material to the results of operations in any
one accounting period.
Note 2. Earnings per Share
In February 1997, Statement of Financial Accounting Standards (SFAS)
No. 128 - "Earnings per Share" was issued and is effective for
interim and annual reporting periods ending after December 15, 1997.
SFAS No. 128 will require the presentation of Basic Earnings per
Share and Diluted Earnings per Share in the Company's Consolidated
Statements of Income. Net Income per Share of Common Stock presented
in these financial statements is equivalent to Basic Earnings per
Share. Pro forma Diluted Earnings per Share for the three months
ended March 31, 1997 and 1996 were $0.88 and $0.76.
Note 3. Solvay S.A. Acquisition
On February 28, 1997, the Company announced the completion of the
acquisition of the worldwide animal health business of Solvay S.A.
for approximately $460 million. The acquisition was financed
partially through the issuance of commercial paper and was accounted
for under the purchase method of accounting. The purchase price
exceeded the net assets acquired by approximately $337 million which
is being amortized over periods of 20 to 40 years.
- 7 -
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended March 31, 1997
Results of Operations
Management's discussion and analysis of results of operations for the 1997
first quarter has been presented on an as-reported basis except for sales
variation explanations which are presented on an as-reported and pro forma
basis. The pro forma sales results reflect businesses divested in 1996
assuming the transactions occurred as of January 1, 1996. This activity
includes the divestitures of the American Home Foods business and the
Symbiosis surgical products business.
Net sales for the 1997 first quarter decreased 1% compared to the 1996 first
quarter on an as-reported basis. The decrease in 1997 as-reported net sales
was due to the divestitures discussed in the previous paragraph. After
adjusting for the effects of businesses divested in 1996, assuming all
transactions occurred as of January 1, 1996, net sales increased 6% for the
1997 first quarter on a pro forma basis. The pro forma results reflect higher
worldwide sales of pharmaceuticals, agricultural and consumer health care
products.
The following table sets forth net sales results by major product category and
industry segment together with the percentage changes in "As-Reported" and "Pro
Forma" net sales from the comparable period in the prior year:
Three Months As-Reported Pro Forma
($ in Millions) Ended March 31, % Increase % Increase
Net Sales to Customers 1997 1996 (Decrease) (Decrease)
Health Care Products:
Pharmaceuticals $2,098.5 $1,962.1 7% 7%
Consumer Health Care 495.5 475.4 4% 4%
Medical Devices 323.3 346.1 (7)% (4)%
Total Health Care 2,917.3 2,783.6 5% 5%
Agricultural Products 685.7 635.9 8% 8%
Food Products - 227.3 (100)% -
Consolidated Net Sales $3,603.0 $3,646.8 (1)% 6%
- 8 -
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended March 31, 1997
The following sales variation explanations are presented on an as-reported and
pro forma basis:
On an as-reported and pro forma basis, U.S. pharmaceutical sales
increased 13% for the 1997 first quarter due primarily to sales of
REDUX and NAPRELAN (both products were introduced in the 1996 second
quarter) and higher sales of LODINE, ZIAC, ORUVAIL, PREMARIN products
and recombinant Factor VIII offset, in part, by lower sales of oral
contraceptives and other cardiovascular and pharmaceutical products.
The increase in U.S. pharmaceutical sales for the 1997 first quarter
consisted of unit volume growth of 11% and price increases of 2%. On
an as-reported and pro forma basis, international pharmaceutical sales
decreased 2% for the 1997 first quarter as higher sales of ZOTON and
EFFEXOR were offset by lower sales of anti-infectives and other mental
health and pharmaceutical products. The decrease in international
pharmaceutical sales for the 1997 first quarter consisted of unit volume
growth of 1% offset by unfavorable foreign exchange of 3%.
On an as-reported and pro forma basis, U.S. consumer health care sales
increased 2% for the 1997 first quarter due primarily to sales of AXID AR
(introduced in the 1996 second quarter) and Children's ADVIL (introduced
in the 1996 third quarter) and higher sales of CENTRUM and cough/cold
products offset, in part, by lower sales of ORUDIS KT and the disposal of
several non-core products in late 1996 and early 1997. The increase in
U.S. consumer health care sales for the 1997 first quarter consisted
primarily of price increases as unit volume remained comparable with the
prior year. On an as-reported and pro forma basis, international consumer
health care sales increased 11% for the 1997 first quarter due primarily
to higher sales of CENTRUM, ADVIL and cough/cold products. The increase
in international consumer health care sales for the 1997 first quarter
consisted of unit volume growth of 11% and price increases of 2% which
were offset by unfavorable foreign exchange of 2%.
On an as-reported basis, worldwide medical devices sales decreased 7% for
the 1997 first quarter. After adjusting for the effect of the divestiture
of the Symbiosis surgical products business in 1996, worldwide medical
devices sales decreased 4% for the 1997 first quarter on a pro forma basis
due primarily to lower sales of wound closure products offset, in part, by
higher sales of needles and syringes. The decrease in worldwide medical
devices sales for the 1997 first quarter consisted of unit volume declines
of 2% and unfavorable foreign exchange of 2%.
- 9 -
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended March 31, 1997
On an as-reported and pro forma basis, U.S. agricultural products sales
increased 8% for the 1997 first quarter due primarily to sales of STEEL
herbicide (introduced in the 1996 second quarter) and higher sales of
PROWL, STATUS and ASSERT herbicides offset, in part, by lower sales of
COUNTER insecticide. The increase in U.S. agricultural products sales for
the 1997 first quarter consisted of unit volume growth of 6% and price
increases of 2%. Due to the seasonality of the U.S. agricultural products
business, which is concentrated primarily in the first six months of the
year, U.S. agricultural products sales and results of operations for the
1997 first quarter may not be indicative of the results to be expected in
subsequent fiscal quarters or for the full year. On an as-reported and
pro forma basis, international agricultural products sales also increased
8% for the 1997 first quarter due primarily to higher sales of PURSUIT and
SCEPTER herbicides and ACROBAT fungicide offset, in part, by lower sales
of CARAMBA fungicide. The increase in international agricultural products
sales for the 1997 first quarter consisted of unit volume growth of 10% and
price increases of 3% which were offset by unfavorable foreign exchange of
5%.
Cost of goods sold, as a percentage of net sales, decreased to 28.6% for the
1997 first quarter versus 33.1% for the 1996 first quarter due primarily to
favorable pharmaceutical and agricultural products sales mix, an overall
product mix improvement as higher sales of pharmaceuticals, agricultural
and consumer health care products replaced the loss of lower margin food
products sales, and to a lesser extent, cost savings and synergies.
Selling, general and administrative expenses, as a percentage of net sales,
increased to 37.3% for the 1997 first quarter compared to 36.4% for the 1996
first quarter. Higher marketing and selling costs for pharmaceutical and
consumer health care products were offset by the elimination of marketing and
selling costs associated with the foods business.
Research and development expenses increased 10% for the 1997 first quarter
versus the 1996 first quarter due primarily to higher pharmaceutical research
and development expenditures.
Interest expense, net decreased in the 1997 first quarter compared to last year
due primarily to the reduction in long-term debt during 1996. Average
long-term debt outstanding during the 1997 and 1996 first quarter was $6,058.4
million and $7,780.3 million, respectively.
- 10 -
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended March 31, 1997
Income before taxes and net income increased 18% and net income per share
increased 15% in the 1997 first quarter compared to the 1996 first quarter due
primarily to higher worldwide sales of pharmaceutical, agricultural and
consumer health care products, favorable pharmaceutical and agricultural
products sales mix, cost savings and synergies, and lower interest expense
offset, in part, by the divestiture of the foods business.
The following table sets forth income before taxes by segment:
Three Months
($ in Millions) Ended March 31,
Income before Taxes 1997 1996
Health Care Products $770.5 $661.3
Agricultural Products 171.4 146.8
Corporate (139.7) (150.2)
Food Products - 23.0
Consolidated Income before Taxes $802.2 $680.9
Competition
The Company is not dependent on any one patent-protected product or line of
products for a substantial portion of its sales or results of operations.
However, PREMARIN, the Company's conjugated estrogens product, which has not
had patent protection for many years, does contribute significantly to sales
and results of operations. PREMARIN is not currently subject to generic
competition in the United States and, on May 5, 1997, the U.S. Food and Drug
Administration (FDA) announced that it will not approve synthetic generic
conjugated estrogens products at this time because these products have not been
shown to contain the same active components as PREMARIN. The FDA further stated
that, until the active components of PREMARIN are scientifically determined
through new studies, a synthetic generic version cannot be approved, although a
generic product derived from the same natural source could be approved earlier
provided that a detailed chemical composition of the product is known.
Although, the Company believes that, as a result of this announcement, PREMARIN
is not likely to face generic competition in the near term, it cannot predict
- 11 -
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Three Months Ended March 31, 1997
the timing or outcome of subsequent efforts to obtain approval for a generic
conjugated estrogens product.
Liquidity, Financial Condition and Capital Resources
Cash and cash equivalents decreased $297.7 million in the 1997 first quarter to
$1,024.6 million. Proceeds from sales of marketable securities and other assets
of $291.3 million, the exercise of stock options of $108.0 million and
commercial paper borrowings of $75.9 million and cash flows from operating
activities of $112.9 million were used principally for the purchase of the
worldwide animal health business of Solvay S.A. for $460.0 million, dividend
payments of $263.7 million and capital expenditures of $156.7 million. Cash
flows from operating activities were impacted by the payment of certain
previously accrued long-term deferred tax liabilities which were required to be
paid in connection with the filing of a tax claim. Due to the seasonality of
the U.S. agricultural products business, a significant portion of the annual
U.S. agricultural products sales are recorded in the first six months of the
year; however, a majority of the related accounts receivable are not collected
until the second and third quarters. As a result, cash flows from operating
activities in the first quarter of 1997 are not indicative of the results to be
expected in subsequent quarters or for the full year.
Capital expenditures included the expansion of the Company's research and
development facilities and continued strategic investments in manufacturing and
distribution facilities worldwide.
Cautionary Statements for Forward Looking Information
Management's discussion and analysis set forth above contains certain forward
looking statements, including statements regarding the Company's financial
position, results of operations and potential competition. These forward
looking statements are based on current expectations. Certain factors which
could cause the Company's actual results to differ materially from expected and
historical results have been identified by the Company in Exhibit 99 to the
Company's 1996 Annual Report on Form 10-K which exhibit is hereby incorporated
by reference.
- 12 -
Part II - Other Information
Item 1. LEGAL PROCEEDINGS
The Company and its subsidiaries are parties to numerous lawsuits and
claims arising out of the conduct of its business, the most
significant of which are described in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
In the brand name prescription drug litigation, the class action
plaintiffs filed a complaint against the settling defendants in the
federal actions that have been coordinated and consolidated for
pretrial purposes under the caption In re Brand Name Prescription Drug
Antitrust Litigation (MDL 97 N.D. Ill.). The class action plaintiffs
allege that the settling defendants conspired to not implement the
affirmative obligations in the settlement agreements which are before
the Seventh Circuit Court of Appeals and not yet final. The complaint
seeks class action status and requests preliminary and permanent
injunctions. It does not specifically request money damages. A
request for preliminary injunction has been filed in this case and
the class action plaintiffs have also filed a motion for a
preliminary injunction against the non-settling defendants in the
above-captioned proceedings.
In the action brought against the Company by Johnson & Johnson
("J&J") and Ortho Pharmaceutical Corporation ("Ortho"), which is
expected to proceed to trial in June 1997, J&J and Ortho have
increased the damages they are seeking from approximately $270
million to approximately $308 million.
In the opinion of the Company, although the outcome of any legal
proceedings cannot be predicted with certainty, the ultimate
liability of the Company in connection with these proceedings will
not have a material adverse effect on the Company's financial
position but could be material to the results of operations in any
one accounting period.
Item 5. Other Information
Effective May 9, 1997, Fred Hassan resigned as Executive Vice
President and Director of the Company to accept a position at
Pharmacia & Upjohn as President and Chief Executive Officer. Mr.
Hassan had responsibility since November 1995 for the global
pharmaceutical, medical device and nutritional businesses, and
research and development.
- 13 -
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit No. Description
(11) Computation of Earnings Per Share.
(27) Financial Data Schedule.
b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during
the quarter covered by this report.
- 14 -
SIGNATURE
Pursuant to the requirements 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.
AMERICAN HOME PRODUCTS CORPORATION
(Registrant)
By /s/ Paul J. Jones
Paul J. Jones
Vice President and Comptroller
(Duly Authorized Signatory
and Chief Accounting Officer)
Date: May 13, 1997
- 15 -
Exhibit Index
Exhibit No. Description
(11) Computation of Earnings Per Share.
(27) Financial Data Schedule.
EX-1
EXHIBIT 11
American Home Products Corporation and
Subsidiaries
Computation of Earnings Per Share
(In thousands except per share amounts)
Quarter Ended
March 31,
1997
1. Net Income ....................................... $576,677
2. Reported earnings per share:
a. Average number of common shares outstanding
during the year .............................. 642,306
b. Reported earnings per share (1/2a) ........... $0.90
3. Primary earnings per share:
a. Average number of common shares outstanding
during the quarter ........................... 642,306
b. Common shares deemed outstanding from the
assumed exercise of stock options reduced by
the number of common shares purchased with
the proceeds (determined using the average
market price during the quarter)............... 12,191
c. Deferred contingent common stock awards ........ 494
d. Shares for primary earnings per share
calculation (3a+3b+3c) ......................... 654,991
e. Primary earnings per share (1/3d) .............. $0.88
4. Fully diluted earnings per share:
a. Average number of common shares outstanding
during the quarter ............................. 642,306
b. Common shares deemed outstanding from the
assumed exercise of stock options reduced by the
number of common shares purchased with the
proceeds (determined using the higher of the
average market price during the quarter or the
market price at end of the quarter) ............. 12,191
c. Deferred contingent common stock awards ......... 494
d. Shares for fully diluted earnings per share
calculation (4a+4b+4c) .......................... 654,991
e. Fully diluted earnings per share (1/4d) ......... $0.88
<TABLE> <S> <C>
<ARTICLE> 5
EXHIBIT 27
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE AMERICAN HOME PRODUCTS CORPORATION AND
SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET AS OF
MARCH 31, 1997 AND CONSOLIDATED CONDENSED STATEMENT OF INCOME FOR
THE THREE MONTHS ENDED MARCH 31, 1997, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,024,624
<SECURITIES> 5,690
<RECEIVABLES> 2,976,726
<ALLOWANCES> 0
<INVENTORY> 2,454,809
<CURRENT-ASSETS> 7,474,282
<PP&E> 6,371,357
<DEPRECIATION> 2,284,722
<TOTAL-ASSETS> 21,257,209
<CURRENT-LIABILITIES> 4,423,006
<BONDS> 6,096,140
<COMMON> 214,423
0
77
<OTHER-SE> 7,041,470
<TOTAL-LIABILITY-AND-EQUITY> 21,257,209
<SALES> 3,603,019
<TOTAL-REVENUES> 3,603,019
<CGS> 1,031,938
<TOTAL-COSTS> 1,031,938
<OTHER-EXPENSES> 372,045
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 97,047
<INCOME-PRETAX> 802,179
<INCOME-TAX> 225,502
<INCOME-CONTINUING> 576,677
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 576,677
<EPS-PRIMARY> 0.88
<EPS-DILUTED> 0.88
</TABLE>
