AMERICAN HOME PRODUCTS CORP
10-Q, 1998-05-13
PHARMACEUTICAL PREPARATIONS
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1998   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 (973) 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, 1998:
                                                            Number of
            Class                                     Shares Outstanding 
  Common Stock, $0.33-1/3 par value                      1,312,609,055


======================================================================
<PAGE>
                                 
              AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES

                                     INDEX

                                                                 Page No.

Part I - Financial Information                                     2

     Item 1. Financial Statements:

          Consolidated Condensed Balance Sheets -
             March 31, 1998 and December 31, 1997                  3

          Consolidated Condensed Statements of Income -
             Three Months Ended March 31, 1998 and 1997            4

          Consolidated Condensed Statements of Changes 
             in Stockholders' Equity - Three Months 
             Ended March 31, 1998 and 1997                         5

          Consolidated Condensed Statements of Cash Flows -
             Three Months Ended March 31, 1998 and 1997            6

          Notes to Consolidated Condensed Financial Statements    7-8

     Item 2. Management's Discussion and Analysis of
             Financial Condition and Results of Operations        9-14

Part II - Other Information                                        15

     Item 1. Legal Proceedings                                     15

     Item 6. Exhibits and Reports on Form 8-K                    15-16


Signature                                                          17
                                                                     
Exhibit Index                                                     EX-1

                                 -1-
<PAGE>
                                      
                       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, 1998 and December 31, 1997, the results of its operations, its cash 
flows and the changes in stockholders' equity for the three months ended 
March 31, 1998 and 1997.  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 1997 Annual Report on Form 10-K.

                                
                                 -2-                                
<PAGE>

<TABLE>
              AMERCAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                    (In Thousands Except Per Share Amounts)
                    
<CAPTION>                    
                                                  March 31, December 31,
                                                   1998       1997
<S>                                             <C>         <C>                                
ASSETS
Cash and cash equivalents...................    $1,458,063  $1,051,372
Marketable securities.......................        97,314      48,363
Accounts receivable less allowances.........     3,149,239   2,843,099
Inventories:
  Finished goods............................       759,347   1,042,065
  Work in progress..........................       706,588     657,033
  Materials and supplies....................       699,054     713,308
                                                 2,164,989   2,412,406
Other current assets including deferred taxes      986,665   1,006,086
  Total Current Assets                           7,856,270   7,361,326
Property, plant and equipment...............     6,090,859   6,722,049
  Less accumulated depreciation.............     2,087,866   2,425,143
                                                 4,002,993   4,296,906
Goodwill and other intangibles, net of 
   accumulated amortization.................     7,929,070   8,338,695
Other assets including deferred taxes.......       801,375     828,184
   Total Assets.............................   $20,589,708 $20,825,111

LIABILITIES
Loans payable...............................      $141,337     $89,041
Trade accounts payable......................       644,989     794,291
Accrued expenses............................     3,062,189   3,019,805
Accrued federal and foreign taxes...........       816,515     423,881
   Total Current Liabilities................     4,665,030   4,327,018
Long-term debt..............................     3,662,145   5,031,861
Other noncurrent liabilities................     2,187,821   2,248,282
Postretirement benefit obligations other 
   than pensions............................       842,500     833,916
Minority interests..........................       220,484     208,782

STOCKHOLDERS' EQUITY
$2 convertible preferred stock, par value
   $2.50 per share..........................            70          72
Common stock, par value $0.33-1/3 per share.       218,666     216,792
Additional paid-in capital..................     2,762,792   2,530,696
Retained earnings...........................     6,384,396   5,707,798
Accumulated other comprehensive loss........      (354,196)   (280,106)
   Total Stockholders' Equity...............     9,011,728   8,175,252
   Total Liabilities and Stockholders' 
      Equity................................   $20,589,708 $20,825,111
</TABLE>

The accompanying notes are an integral part of these consolidated condensed 
balance sheets.

                                 -3-
<PAGE>

<TABLE>
        
              AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                    (In Thousands Except Per Share Amounts)

<CAPTION>
                                                      Three Months 
                                                     Ended March 31,
                                                 1998          1997
<S>                                           <C>          <C>
Net Sales ................................... $3,666,395   $3,603,019

Cost of goods sold ..........................  1,004,430    1,031,938
Selling, general and
  administrative expenses ...................  1,355,318    1,345,259
Research and development expenses ...........    386,958      372,045
Interest expense, net .......................     72,111       97,047
Other income, net ...........................    (61,158)     (45,449)
Gain on sale of business ....................   (592,084)           - 
        
Income before federal and foreign taxes .....  1,500,820      802,179
Provision for taxes .........................    518,610      225,502

Net Income ..................................   $982,210     $576,677

Basic Earnings per Share (Note 1)............      $0.75        $0.45

Diluted Earnings per Share (Note 1)..........      $0.74        $0.44

Dividends per share of common stock (Note 1).     $0.215       $0.205

</TABLE>

The accompanying notes are an integral part of these consolidated condensed 
statements.

                                 -4-
<PAGE>

<TABLE>                           

              AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
      CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (In Thousands)

<CAPTION>

Three Months Ended March 31,1998:

                                                  Accumulated
               $2              Addition-          Other        Total
           Convertible         al                 Comprehen-   Stock-         
           Preferred   Common  Paid-in   Retained sive         holders'
           Stock       Stock   Capital   Earnings Loss         Equity
<S>        <C>      <C>     <C>        <C>        <C>        <C>
Balance at 
  January
  1, 1998     $72  $216,792 $2,530,696 $5,707,798 ($280,106)$8,175,252

Net income                                982,210              982,210
Currency
 translation
 adjustments                                        (72,953)   (72,953)
Unrealized 
 loss on
 marketable
 securities                                          (1,137)    (1,137)
 Comprehensive 
   income                                                      908,120

Cash dividends
 declared                                (281,227)            (281,227)
Treasury stock        
 acquired               (80)    (1,904)   (19,416)             (21,400)
Common stock         
 issued               1,911    223,391                         225,302
Conversion of                                                
 preferred 
 stock and
 other 
 exchanges      (2)      43     10,609     (4,969)               5,681
Balance at
 March 31,
 1998          $70 $218,666 $2,762,792 $6,384,396 ($354,196)$9,011,728
              

Three Months Ended March 31,1997:

                                                  Accumulated
               $2              Addition-          Other        Total
           Convertible         al                 Comprehen-   Stock-         
           Preferred   Common  Paid-in   Retained sive         holders'
           Stock       Stock   Capital   Earnings Loss         Equity
Balance at 
  January
  1, 1997     $79  $213,328 $2,034,337 $4,750,621 ($36,273)  $6,962,092

Net income                                576,677               576,677
Currency
 translation
 adjustments                                      (131,450)    (131,450)
Unrealized 
 loss on
 marketable
 securities                                         (1,421)      (1,421)
 Comprehensive 
   income                                                       443,806

Cash dividends
 declared                                (263,687)             (263,687)
Treasury stock        
 acquired               (15)      (269)    (2,384)               (2,668)
Common stock         
 issued               1,053    106,914                          107,967
Conversion of
 preferred 
 stock and
 other 
 exchanges     (2)       57      8,405                            8,460
Balance at
 March 31,
 1997         $77  $214,423 $2,149,387 $5,061,227($169,144)  $7,255,970

</TABLE>

The accompany notes are an integral part of these consolidated condensed
statements.
                                 -5-
<PAGE>

<TABLE>
              AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
<CAPTION>
                                                      Three Months 
                                                     Ended March 31,
                                                     1998      1997
<S>                                                 <C>       <C>
Operating Activities
Net income ......................................  $982,210   $576,677
Adjustments to reconcile net income to net 
cash provided from operating activities:
  Gain on sale of business......................   (592,084)         -         
  Gains on sales of other assets................    (76,845)   (19,002)
  Depreciation and amortization.................    176,928    177,777
  Deferred income taxes.........................      7,175   (196,678)
  Changes in working capital, net...............   (211,019)  (442,566)
  Other items, net .............................    (12,528)    16,695
Net cash provided from operating activities.....    273,837    112,903

Investing Activities
Purchases of property, plant and equipment......   (182,923)  (156,681)
Purchase of business, net of cash acquired......          -   (460,000)  
Proceeds from sale of business..................  1,770,000          -         
Proceeds from sales of other assets.............     89,888     74,979
Net(purchases)/sales of marketable securities...    (49,808)   216,322
Net cash provided from/(used for) investing 
  activities ...................................  1,627,157   (325,380)

Financing Activities
Net (repayments of)/proceeds from debt.......... (1,315,779)    75,938
Dividends paid .................................   (281,227)  (263,687)
Exercise of stock options ......................    225,302    107,967
Purchases of treasury stock ....................    (21,400)    (2,668)
Termination of interest rate swap agreements....    (96,655)         -         
Net cash used for financing activities.......... (1,489,759)   (82,450)
Effects of exchange rates on cash balances .....     (4,544)    (2,746)
Increase/(decrease) in cash and 
  cash equivalents..............................    406,691   (297,673)
Cash and cash equivalents, beginning of period..  1,051,372  1,322,297
Cash and cash equivalents, end of period........ $1,458,063 $1,024,624

The accompanying notes are an integral part of these consolidated 
condensed statements.

Supplemental Information

Interest payments excluding termination of 
  interest rate swap agreements                    $149,136   $132,664
Income tax payments, net of refunds                 131,985    375,939

</TABLE>
                                 -6-
<PAGE>

            AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


Note 1.   Capital Stock

          At the Company's April 23, 1998 Annual Meeting of Stockholders, an
          increase in the number of authorized shares of common stock from
          1,200,000,000 to 2,400,000,000 was approved enabling the Company to
          complete a two-for-one stock split effected in the form of a 100%
          stock dividend which was declared by the Company's Board of Directors
          in March 1998.  The record date for stockholders entitled to receive
          the additional shares was the close of business on April 24, 1998.
          The par value of the common stock was maintained at the pre-split
          amount of $0.33-1/3 per share.  All references to common shares
          outstanding and per share amounts in these consolidated condensed
          financial statements, notes to consolidated condensed financial
          statements and Management's Discussion and Analysis of Financial
          Condition and Results of Operations have been adjusted to reflect the
          two-for-one stock split.

Note 2.   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 its legal 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 3.   Sale of Sherwood-Davis & Geck Medical Devices Business

          On February 27, 1998, the Company sold the Sherwood-Davis & Geck
          medical devices business to a subsidiary of Tyco International Ltd.
          for approximately $1.77 billion, resulting in a pre-tax gain of
          $592,084,000.  The proceeds were used primarily to reduce outstanding
          commercial paper.  Net income and basic earnings per share for the
          1998 first quarter included an after-tax gain on the sale of
          $330,782,000 and $0.25.

                                 -7-
<PAGE>
            
            AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

            

Note 4.   Accumulated Other Comprehensive Loss

          Effective January 1, 1998, the Company adopted Statement of Financial
          Accounting Standards (SFAS) No. 130 - "Reporting Comprehensive
          Income".  SFAS No. 130 increases financial reporting disclosures and
          has no impact on the Company's financial position or results of
          operations.  Certain reclassifications have been made to the 
          March 31,1997 consolidated condensed financial statements to conform 
          with the financial reporting requirements of SFAS No. 130.

          Accumulated other comprehensive loss is comprised substantially of
          currency translation adjustments.

Note 5.   Earnings per Share

          The following table sets forth the computations of
          Basic Earnings per Share and Diluted Earnings per Share:
          <TABLE>
          <CAPTION>                                    Three Months
                                                       Ended March 31,
           (In thousands except per share amounts)   1998        1997
           <S>                                     <C>         <C>
           Net income less preferred dividends     $982,196    $576,662
           Denominator:
            Average number of common shares
              outstanding                         1,308,997   1,284,612
           Basic Earnings per Share                   $0.75       $0.45
           Denominator:
            Average number of common shares
              outstanding                         1,308,997   1,284,612
            Common share equivalents of 
              outstanding stock options and
              deferred contingent common 
              stock awards                           22,734      17,712
           Total shares                           1,331,731   1,302,324
           Diluted Earnings per Share                 $0.74       $0.44

           </TABLE>
                                 -8-
<PAGE>
                                  
             Management's Discussion and Analysis of Financial Condition
             
                            and Results of Operations
                            
                        Three Months Ended March 31, 1998

Results of Operations

Management's discussion and analysis of results of operations for the 1998 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 and acquired in 1998 and 1997
assuming the transactions occurred as of January 1, 1997.  This activity
includes the divestitures of the Sherwood-Davis & Geck (effective February 27,
1998) and Storz Instrument Company (effective December 31, 1997) medical devices
businesses, and the acquisition of the worldwide animal health business of
Solvay S.A. (effective February 28, 1997).

On an as-reported basis, worldwide net sales for the 1998 first quarter were 2%
higher compared with prior year levels.  On a pro forma basis, worldwide net
sales increased 4% for the 1998 first quarter.  The increase in pro forma
worldwide net sales for the 1998 first quarter was due primarily to higher
domestic sales of pharmaceuticals and agricultural products offset, in part, by
unfavorable foreign exchange of 3%.

The following table sets forth worldwide net sales results by major product
category and industry segment together with the percentage changes in "As-
Reported" and "Pro Forma" worldwide net sales from the comparable period in the
prior year:
<TABLE>

<CAPTION>                        Three Months    As-Reported  Pro Forma
($ in Millions)                 Ended March 31,  % Increase  % Increase
Net Sales to Customers          1998      1997   (Decrease)  (Decrease)
<S>                          <C>       <C>       <C>         <C>
Health Care Products:           
  Pharmaceuticals            $2,263.2  $2,098.5      8%           4%
  Consumer Health Care          500.6     495.5      1%           1%
  Medical Devices               192.0     323.3    (41)%          -
 
Total Health Care Products    2,955.8   2,917.3      1%           4%
                                        
Agricultural Products           710.6     685.7      4%           4%

Consolidated Net Sales       $3,666.4  $3,603.0      2%           4%   
                                 
</TABLE>
                                 -9-
<PAGE>
                                  
                      
             Management's Discussion and Analysis of Financial Condition
             
                            and Results of Operations
                            
                        Three Months Ended March 31, 1998

The following sales variation explanations are presented on an as-reported and
pro forma basis:

     On an as-reported basis, worldwide pharmaceutical sales increased 8% for
     the 1998 first quarter.  On a pro forma basis, worldwide pharmaceutical
     sales increased 4% for the 1998 first quarter due primarily to higher sales
     of PREMARIN products, oral contraceptives and CORDARONE offset, in part, by
     the voluntary market withdrawal of the Company's antiobesity products in
     the 1997 third quarter, lower sales of ORUVAIL, LODINE products, ZIAC,
     NAPRELAN and other pharmaceuticals, and unfavorable foreign exchange of 4%.
     On an as-reported basis, U.S. pharmaceutical sales increased 12% for the
     1998 first quarter.  On a pro forma basis, U.S. pharmaceutical sales
     increased 11% for the 1998 first quarter.  The increase in pro forma U.S.
     pharmaceutical sales for the 1998 first quarter consisted of unit volume
     growth of 8% and price increases of 3%.  On an as-reported basis,
     international pharmaceutical sales increased 1% for the 1998 first quarter.
     On a pro forma basis, international pharmaceutical sales decreased 5% for
     the 1998 first quarter.  The decrease in pro forma international
     pharmaceutical sales for the 1998 first quarter consisted of unit volume
     growth of 3% and price increases of 1%, which were more than offset by
     unfavorable foreign exchange of 9%.

     On an as-reported and pro forma basis, worldwide consumer health care sales
     increased 1% for the 1998 first quarter.  Worldwide consumer health care
     results for the 1998 first quarter reflect higher sales of CENTRUM products
     and CALTRATE offset, in part, by the effect of the disposal of several non-
     core products in 1997, lower sales of AXID AR and unfavorable foreign
     exchange of 2%. On an as-reported and pro forma basis, U.S. consumer health
     care sales increased 1% for the 1998 first quarter.  The increase in U.S.
     consumer health care sales for the 1998 first quarter consisted of unit
     volume declines of 1%, which were more than offset by price increases of
     2%.  On an as-reported and pro forma basis, international consumer health
     care sales increased 2% for the 1998 first quarter.  The increase in
     international consumer health care sales for the 1998 first quarter
     consisted of unit volume growth of 6% and price increases of 3%, which were
     offset, in part, by unfavorable foreign exchange of 7%.

     On February 27, 1998, the Company sold the Sherwood-Davis & Geck medical
     devices business resulting in a pre-tax gain of $592.1 million ($330.8
     million after-tax).  This transaction completed the Company's exit from the
     medical devices business.  On an as reported basis, worldwide medical
     devices sales decreased 41% for the 1998 first quarter due primarily to the
     Sherwood-Davis & Geck divestiture as well as the sale of Storz Instrument
     Company effective December 31, 1997.

     On an as-reported and pro forma basis, worldwide agricultural products
     sales increased 4% for the 1998 first quarter due to higher sales of RAPTOR
     
                                 -10-
 <PAGE>
                                                       
             Management's Discussion and Analysis of Financial Condition
             
                            and Results of Operations
                            
                        Three Months Ended March 31, 1998

     (a soybean herbicide which was introduced in the 1997 second quarter and is
     replacing PURSUIT and SCEPTER herbicides in certain geographies),
     LIGHTNING (a corn herbicide which was introduced in the 1997 second
     quarter) and COUNTER insecticide.  Offsetting the sales increase, in part,
     were lower sales of CARAMBA fungicide and unfavorable foreign exchange of
     3% . On an as-reported and pro forma basis, U.S. agricultural products
     sales increased 5% for the 1998 first quarter.  The increase in U.S.
     agricultural products sales for the 1998 first quarter consisted of unit
     volume growth of 6%, which was offset, in part, by price decreases of 1%.
     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 1998 first
     quarter are not 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 increased 2% for the 1998
     first quarter.  The increase in international agricultural products sales
     for the 1998 first quarter consisted of unit volume growth of 11%, which
     was offset, in part, by price decreases of 3% and unfavorable foreign
     exchange of 6%.

Cost of goods sold, as a percentage of net sales, decreased to 27.4% for the
1998 first quarter versus 28.6% for the 1997 first quarter due primarily to an
overall product mix improvement as increased sales of higher margin
pharmaceuticals and agricultural products replaced the loss of lower margin
medical devices sales resulting from the divestitures of the Sherwood-Davis &
Geck and Storz Instrument Company medical devices businesses.

Selling, general and administrative expenses, as a percentage of net sales,
decreased to 37.0% for the 1998 first quarter versus 37.3% for the 1997 first
quarter.  Higher marketing and selling expenses related to recent pharmaceutical
product introductions and other pharmaceutical promotional efforts were offset
by lower marketing expenses for consumer healthcare products and lower selling,
general and administrative expenses resulting from the divestitures of the
Sherwood-Davis & Geck and Storz Instrument Company medical devices businesses.

Research and development expenses increased 4.0% for the 1998 first quarter due
primarily to higher pharmaceutical research and development expenditures,
particularly in the biopharmaceutical area, offset, in part, by lower research
and development expenses resulting from the divestitures of the Sherwood-Davis &
Geck and Storz Instrument Company medical devices businesses.

Interest expense, net decreased in the 1998 first quarter due primarily to the
reduction in long-term debt during 1998 as the proceeds from the sale of the
Sherwood-Davis & Geck medical devices business were used primarily to reduce
outstanding commercial paper.  Average long-term debt outstanding during the
1998 and 1997 first quarter was $4,347.0 million and $6,058.4 million,
respectively.

                                 -11-
<PAGE>
                                  
                                                       
             Management's Discussion and Analysis of Financial Condition
             
                            and Results of Operations
                            
                        Three Months Ended March 31, 1998
                    

Other income, net for both the 1998 and 1997 first quarter includes gains on the
sales of non-strategic assets, including certain generic and non-core product
rights offset, in part, by foreign exchange losses.

The following table sets forth income before taxes by industry segment:
<TABLE>
<CAPTION>                    Three Months
($ in Millions)             Ended March 31, 
Income before Taxes         1998        1997
<S>                        <C>         <C>
Health Care Products       $845.3      $770.5
Agricultural Products       190.3       171.4
Corporate                   465.2 (1)  (139.7)

Consolidated Income 
  before Taxes           $1,500.8      $802.2

</TABLE>

(1)  1998 includes a gain on the sale of Sherwood-Davis & Geck medical
     devices business of $592.1 million.

The effective tax rate increased to 34.6% for the 1998 first quarter versus
28.1% for the 1997 first quarter due primarily to the tax impact of the gain on
the sale of the Sherwood-Davis & Geck medical devices business in 1998. The tax
impact related to the gain on the sale of the Sherwood-Davis & Geck medical
devices business was due primarily to goodwill basis differences for tax and
financial reporting purposes.

Net income, basic earnings per share and diluted earnings per share for the 1998
first quarter increased 13%, 11% and 11% to $651.4 million, $0.50 and $0.49,
respectively, compared to 1997 first quarter results, excluding the after-tax
gain on the sale of the Sherwood-Davis & Geck medical devices business of $330.8
million, $0.25 and $0.25, respectively.  The increases in net income, basic
earnings per share and diluted earnings per share for the 1998 first quarter,
excluding the gain on the sale, were greater than the increase in net sales due
primarily to increased sales of higher margin pharmaceutical and agricultural
products and lower interest expense.  Including the gain on sale, net income,
basic earnings per share and diluted earnings per share for the 1998 first
quarter increased 70%, 67% and 68% to $982.2 million, $0.75 and $0.74,
respectively, compared to 1997 first quarter results.

During the 1998 first quarter, the Company initiated a review of its worldwide
manufacturing and distribution systems for all of its product lines.  The
results of this study will be announced later this year at which time it is
expected that a restructuring charge, which will offset a portion of the gain on
the sale of the Sherwood-Davis & Geck medical devices business, will be
required.

                                 -12-
<PAGE>
                                  

             Management's Discussion and Analysis of Financial Condition
             
                            and Results of Operations
                            
                        Three Months Ended March 31, 1998
                    


Competition

The Company operates in the highly competitive healthcare and agrochemical
industries.  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, one of the Company's conjugated estrogens
products, manufactured from pregnant mare's urine, is the market leader in its
category and does contribute significantly to sales and results of operations.
PREMARIN's principal uses are to treat the symptoms of menopause and
osteoporosis, a condition involving a loss of bone mass in postmenopausal 
women.  Estrogen containing products manufactured by other companies have been 
marketed for many years for the treatment of menopausal symptoms, and some of 
these products have also obtained marketing approval for the treatment of 
osteoporosis.  During the past several years, other manufacturers have 
introduced products for the treatment and/or prevention of osteoporosis.  
Some companies have attempted to obtain approval for generic versions of 
PREMARIN.  These products, if approved, would be routinely substitutable 
for PREMARIN under many state laws and third party insurance payer plans.  
In May 1997, the U.S. Food and Drug Administration (FDA) announced it would 
not approve certain synthetic estrogen products as generic equivalents of 
PREMARIN given known compositional differences between the active ingredient 
of these products and PREMARIN. No generic equivalents to PREMARIN have been
approved by the FDA to date.  PREMARIN will continue to be subject to 
competition from competing estrogen and other products for its approved 
indications, and may be subject to some form of generic competition from 
either natural or synthetic generic conjugated estrogens products in the future.


Liquidity, Financial Condition and Capital Resources

Cash and cash equivalents increased $406.7 million in the 1998 first quarter to
$1,458.1 million. Proceeds from sales of businesses and other assets of $1,859.9
million, cash flows from operating activities of $273.8 million and proceeds
from the exercise of stock options of $225.3 million were used principally for
long-term debt reduction of $1,315.8 million, dividend payments of $281.2
million and capital expenditures of $182.9 million. 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 significant amount of the related accounts receivable are not
collected until the third quarter.  As a result, cash flows from operating
activities for the first quarter of 1998 are not indicative of the results to be
expected in subsequent fiscal quarters or for the full year.  Capital 
expenditures included strategic investments in manufacturing and distribution 
facilities worldwide and expansion of the Company's research and development 
facilities.

                                 -13-
<PAGE>

             Management's Discussion and Analysis of Financial Condition
             
                            and Results of Operations
                            
                        Three Months Ended March 31, 1998
               
                                
At March 31, 1998, the fair value of the Company's long-term debt, including the
current portion, was $3,951.9 million.  If interest rates were to increase or
decrease by one percentage point, the fair value of the long-term debt would
decrease or increase by approximately $118.1 million.

Proceeds from the sale of the Sherwood-Davis & Geck medical devices business
were used to reduce long-term debt and terminate the Company's $2.3 billion 
of interest rate swap agreements.  The cost to unwind the interest rate swap
agreements was charged against the gain on sale.

At March 31, 1998, the fair value of the $587.3 million notional amount of
foreign exchange forward contracts was a net receivable of $5.6 million.  As
foreign exchange rates change from period to period, the fluctuations in the
fair value of the foreign exchange forward contracts are offset by fluctuations
in the fair value of the underlying hedged transactions.  If the value of the
U.S. dollar were to increase or decrease by 10% in relation to all foreign
currencies, the net receivable would increase or decrease by approximately 
$53.0 million.

Effective April 1, 1998, the Company reduced its $5 billion of revolving credit
facilities to $2 billion by terminating the $2.5 billion, 364-day credit
facility in its entirety and reducing the  $2.5 billion, five-year credit
facility to $2.0 billion.  The remaining $2.0 billion, five-year credit facility
supports the Company's commercial paper program and has a maturity date of July
31, 2002.  At March 31, 1998, there were no borrowings outstanding under the
credit facilities.

Cautionary Statements for Forward Looking Information

Management's discussion and analysis set forth above contains certain forward
looking statements, including, among other things, 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 
its other periodic reports filed with the Securities and Exchange 
Commission including the Company's 1997 Annual Report on Form 10-K and 
Exhibit 99 to such report, which exhibit is hereby incorporated by reference.

                                 -14-
<PAGE>                                  

                        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, including product
          liability and other tort claims, the most significant of which are
          described in the Company's Annual Report on Form 10-K for the year
          ended December 31, 1997.

          In the brand name prescription drugs antitrust litigation, the Company
          and other defendants have entered into settlement agreements, which
          are subject to court approval in each state, to resolve the indirect
          purchaser cases in Arizona, the District of Columbia, Florida, Kansas,
          Maine, Michigan, Minnesota, New York, North Carolina, Tennessee and
          Wisconsin.  The Company's payments under these settlements amounted to
          $5,421,000.  While the Company believes that it had no liability in
          these cases, the settlements were made to resolve expensive and
          burdensome complex litigation.  The settlements state that they shall
          not be deemed to be an admission or evidence of any wrongdoing by the
          Company or the truth of any of the claims alleged.

          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 its legal 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 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits
               
               Exhibit No.  Description

               (3.1)        The Company's Restated Certificate of Incorporation 
                            is incorporated herein by reference to Exhibit 3.1 
                            of the Company's Form 10/A dated May 4, 1998.

               (3.2)        The Company's By-Laws are incorporated herein by
                            reference to Exhibit 3.2 of the Company's Form 10/A
                            dated May 4, 1998.
                                     
                                 -15-                           
<PAGE>                                  
                                  
              (10.1)        Letter dated, March 26, 1998, terminating the
                            $2,500,000,000 A Credit Agreement and amending the
                            $2,500,000,000 B Credit Agreement, each among 
                            American Home Products Corporation, AC Acquisition 
                            Holding Company, A.H. Robins, Incorporated, the 
                            lender parties thereto and The Chase Manhattan Bank,
                            as Agent, each dated as of September 9, 1994 and as 
                            amended.
 
              (27.1)        Financial Data Schedule - Period Ended March 31, 
                            1998.

              (27.2)        Restated Financial Data Schedule - Period Ended
                            March 31, 1997.

              (b) Reports on Form 8-K

                  None.

                                 -16-
<PAGE>

                                  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, 1998

                                 -17-
<PAGE>                                  
                                  
                               Exhibit Index


Exhibit No.    Description
 
   (10.1)      Letter dated, March 26, 1998, terminating the $2,500,000,000
               A Credit Agreement and amending the $2,500,000,000 B Credit
               Agreement, each among American Home Products Corporation, AC
               Acquisition Holding Company, A.H. Robins, Incorporated, the
               lender parties thereto and The Chase Manhattan Bank, as Agent,
               each dated as of September 9, 1994 and as amended.

   (27.1)      Financial Data Schedule - Period Ended March 31, 1998.

   (27.2)      Restated Financial Data Schedule - Period Ended March 31, 1997.
   
   
                                 EX-1


                                                                  EXHIBIT 10.1
                                   [AHP LOGO]

                       AMERICAN HOME PRODUCTS CORPORATION
          FIVE GIRALDA FARMS, MADISON, NEW JERSEY 07940 (973) 660-5402

                                                               JACK M. O'CONNOR
                                                                  TREASURER

March 26, 1998

VIA FAX: (212) 270-6041
Ms. Nancy Mistretta
Managing Director
Chase Securities Inc.
270 Park Avenue
New York, NY  10017-2070

RE:   - $2,500,000,000 A Credit Agreement among American Home Products
        Corporation, AC Acquisition Holding Company, A.H. Robins Company,
        Incorporated, The Lender Parties Hereto and The Chase Manhattan Bank,
        as Agent, Dated as of September 9, 1994, as amended

      - $2,500,000,000 B Credit Agreement among American Home Products
        Corporation, AC Acquisition Holding Company, A.H. Robins Company, 
        Incorporated, The Lender Parties Hereto and The Chase Manhattan Bank, 
        as Agent, Dated as of September 9, 1994, as amended

Dear Ms. Mistretta:

In accordance with Section 2.5(a) of the referenced Credit Agreements, please
accept this letter as confirmation of American Home Products Corporation's
("AHP") decision to terminate the $2.5 billion, 364-day, A Credit Agreement in
its entirety and reduce the $2.5 billion, 5-year, B Credit Agreement to $2.0
billion, effective April 1, 1998.  Within the B Credit Agreement, please reduce
all of the banks' current commitment amounts by 20% in order to arrive at a
total commitment of $2.0 billion.

Please forward a confirmation of the revisions to the Credit Agreements to Mr.
Charles Malone at facsimile number (973) 660-6671 as soon as possible.

Very truly yours,



/s/ Jack M. O'Connor
Jack M. O'Connor
Treasurer

cc:   P. Ciocco (Chase - Agent Services)
      B. A. Lewin
      C. J. Malone
      M. C. White


<TABLE> <S> <C>

<ARTICLE> 5

<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
         THE AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED
         CONDENSED BALANCE SHEET AS OF MARCH 31, 1998 AND CONSOLIDATED
         CONDENSED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31,
         1998, 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-31-1998
<PERIOD-END>                                            MAR-31-1998
<CASH>                                                    1,458,063
<SECURITIES>                                                 97,314
<RECEIVABLES>                                             3,149,239
<ALLOWANCES>                                                      0
<INVENTORY>                                               2,164,989
<CURRENT-ASSETS>                                          7,856,270
<PP&E>                                                    6,090,859
<DEPRECIATION>                                            2,087,866
<TOTAL-ASSETS>                                           20,589,708
<CURRENT-LIABILITIES>                                     4,665,030
<BONDS>                                                   3,662,145
<COMMON>                                                    218,666
                                             0
                                                      70
<OTHER-SE>                                                8,792,992
<TOTAL-LIABILITY-AND-EQUITY>                             20,589,708
<SALES>                                                   3,666,395
<TOTAL-REVENUES>                                          3,666,395
<CGS>                                                     1,004,430
<TOTAL-COSTS>                                             1,004,430
<OTHER-EXPENSES>                                            386,958
<LOSS-PROVISION>                                                  0
<INTEREST-EXPENSE>                                           72,111
<INCOME-PRETAX>                                           1,500,820
<INCOME-TAX>                                                518,610
<INCOME-CONTINUING>                                         982,210
<DISCONTINUED>                                                    0
<EXTRAORDINARY>                                                   0
<CHANGES>                                                         0
<NET-INCOME>                                                982,210
<EPS-PRIMARY>                                                  0.75<F1>
<EPS-DILUTED>                                                  0.74<F2>
        
<FN>

<F1> This amount represents Basic Earnings per Share in accordance with the
     requirements of Statement of Financial Accounting Standards No. 128 -
     "Earning per Share".  Prior period financial data schedules for periods
     other than the three months ended March 31, 1998 and 1997 have not been
     restated to reflect the two-for-one stock split effected in the form of a
     100% stock dividend to stockholders of record at the close of business on
     April 24, 1998.

<F2> This amount represents Diluted Earnings per Share in accordance with the
     requirements of Statement of Financial Accounting Standards No. 128 -
     "Earnings per Share".   Prior period financial data schedules for periods
     other than the three months ended March 31, 1998 and 1997 have not been
     restated to reflect the two-for-one stock split effected in the form of a
     100% stock dividend to stockholders of record at the close of business on
     April 24, 1998.
</FN>



</TABLE>

<TABLE> <S> <C>

<ARTICLE> 5

<LEGEND>   THIS AMENDED 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>                                                  0.45<F1>
<EPS-DILUTED>                                                  0.44<F2>
        
<FN>

<F1> This amount represents Basic Earnings per Share in accordance with the
     requirements of Statement of Financial Accounting Standards No. 128 -
     "Earning per Share".  Prior period financial data schedules for periods
     other than the three months ended March 31, 1998 and 1997 have not been
     restated to reflect the two-for-one stock split effected in the form of a
     100% stock dividend to stockholders of record at the close of business on
     April 24, 1998.

<F2> This amount represents Diluted Earnings per Share in accordance with the
     requirements of Statement of Financial Accounting Standards No. 128 -
     "Earnings per Share".  Prior period financial data schedules for periods
     other than the three months ended March 31, 1998 and 1997 have not been
     restated to reflect the two-for-one stock split effected in the form of a
     100% stock dividend to stockholders of record at the close of business on
     April 24, 1998.
</FN>


</TABLE>


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