SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 1-3305
MERCK & CO., INC.
P. O. Box 100
One Merck Drive
Whitehouse Station, N.J. 08889-0100
(908) 423-1000
Incorporated in New Jersey I.R.S. Employer Identification
No. 22-1109110
The number of shares of common stock outstanding as of the close of business on
April 30, 1995:
Class Number of Shares Outstanding
----- ----------------------------
Common Stock............................. 1,236,692,610
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 [ ]
<PAGE>
Part I - Financial Information
MERCK & CO., INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
($ in millions except per share amounts)
Three Months
Ended March 31
-------------------------
1995 1994
-------- --------
Sales ......................................... $3,817.3 $3,514.3
-------- --------
Costs, Expenses and Other
Materials and production .................... 1,726.2 1,455.6
Marketing and administrative ................ 770.0 755.9
Research and development .................... 288.2 266.3
Restructuring charge ........................ 175.0 --
Gains on sales of Specialty
Chemical businesses ....................... (682.9) --
Other (income) expense, net ................. 445.0 24.2
-------- --------
2,721.5 2,502.0
-------- --------
Income Before Taxes ........................... 1,095.8 1,012.3
Taxes on Income ............................... 338.4 337.1
-------- --------
Net Income .................................... $ 757.4 $ 675.2
======== ========
Per Share of Common Stock:
Net Income .................................. $ .61 $ .54
Dividends Declared .......................... $ .30 $ .28
Average Number of Common
Shares Outstanding (millions) ............... 1,242.6 1,255.2
The accompanying notes are an integral part of this financial statement.
- 1 -
<PAGE>
MERCK & CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 1995 AND DECEMBER 31, 1994
($ in millions)
March 31 December 31
1995 1994
--------- ----------
ASSETS
Current Assets
Cash and cash equivalents ........................ $ 2,221.1 $ 1,604.0
Short-term investments ........................... 823.5 665.7
Accounts receivable .............................. 2,051.5 2,351.5
Inventories ...................................... 1,672.9 1,660.9
Prepaid expenses and taxes ....................... 704.1 639.6
--------- ---------
Total Current Assets ........................... 7,473.1 6,921.7
--------- ---------
Investments ........................................ 1,381.6 1,416.9
Property, Plant and Equipment, at cost,
net of allowance for depreciation of
$2,190.8 in 1995 and $2,376.6 in 1994 ............ 4,851.6 5,296.3
Goodwill and Other Intangibles,
net of accumulated amortization of
$272.1 in 1995 and $291.1 in 1994 ................ 7,074.0 7,212.3
Other Assets ....................................... 940.0 1,009.4
--------- ---------
$21,720.3 $21,856.6
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities ......... $ 2,745.2 $ 2,715.4
Loans payable .................................... 131.1 146.7
Income taxes payable ............................. 2,067.2 2,206.5
Dividends payable ................................ 372.2 380.0
--------- ---------
Total Current Liabilities ...................... 5,315.7 5,448.6
--------- ---------
Long-Term Debt ..................................... 1,167.7 1,145.9
--------- ---------
Deferred Income Taxes and Noncurrent Liabilities ... 2,890.4 2,914.3
--------- ---------
Minority Interests ................................. 1,298.7 1,208.8
--------- ---------
Stockholders' Equity
Common stock
Authorized - 2,700,000,000 shares
Issued - 1,483,263,643 shares - 1995
- 1,483,167,594 shares - 1994 ........ 4,643.1 4,667.8
Retained earnings .................................. 11,333.9 10,942.0
--------- ---------
15,977.0 15,609.8
Less treasury stock, at cost
244,923,486 shares - 1995
235,341,571 shares - 1994 ........................ 4,929.2 4,470.8
--------- ---------
Total Stockholders' Equity ..................... 11,047.8 11,139.0
--------- ---------
$21,720.3 $21,856.6
========= =========
The accompanying notes are an integral part of this financial statement.
- 2 -
<PAGE>
MERCK & CO., INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
($ in millions)
Three Months
Ended March 31
------------------------
1995 1994
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ....................................... $ 757.4 $ 675.2
Adjustments to reconcile net income
to net cash provided from operations:
Restructuring charge ......................... 175.0 --
Gains on sales of Specialty
Chemical businesses ........................ (682.9) --
Other ........................................ 233.7 177.4
Net changes in assets and liabilities ........ (107.1) (170.4)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES ........ 376.1 682.2
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ............................. (162.6) (190.9)
Purchase of securities, subsidiaries
and other investments .......................... (1,596.6) (4,891.3)
Proceeds from sale of securities,
subsidiaries and other investments ............. 1,500.3 5,113.1
Proceeds from sales of Specialty
Chemical businesses, net of cash
transferred .................................... 1,321.1 --
Other ............................................ (43.7) (5.5)
--------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES ........ 1,018.5 25.4
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in short-term borrowings .............. (16.2) (300.7)
Proceeds from issuance of debt ................... -- .1
Payments on debt ................................. (4.3) (13.0)
Purchase of treasury stock ....................... (530.9) --
Dividends paid to stockholders ................... (379.9) (350.9)
Other ............................................ 53.3 14.8
--------- ---------
NET CASH USED BY FINANCING ACTIVITIES ............ (878.0) (649.7)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS ................... 100.5 29.7
--------- ---------
NET INCREASE IN CASH AND CASH
EQUIVALENTS .................................... 617.1 87.6
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR .............................. 1,604.0 829.4
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ....... $ 2,221.1 $ 917.0
========= =========
The accompanying notes are an integral part of this financial statement.
Notes to Financial Statements
1. The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-Q.
Accordingly, certain information and notes required by generally accepted
accounting principles for complete financial statements are not included
herein. The interim statements should be read in conjunction with the
financial statements and notes thereto included in the Company's latest
Annual Report on Form 10-K.
Interim statements are subject to possible adjustments in connection with
the annual audit of the Company's accounts for the full year 1995; in the
Company's opinion, all adjustments necessary for a fair presentation of
these interim statements have been included and are of a normal and
recurring nature.
- 3 -
<PAGE>
Notes to Financial Statements (continued)
2. Inventories consisted of:
($ in millions)
-----------------------------
March 31 December 31
1995 1994
-------- --------
Finished goods ........................ $ 927.9 $ 926.7
Raw materials and work in process ..... 667.9 684.7
Supplies .............................. 77.5 65.6
-------- --------
Total (approximates current cost) ... 1,673.3 1,677.0
Reduction to LIFO cost ................ .4 16.1
-------- --------
$1,672.9 $1,660.9
======== ========
3. Sales consisted of:
($ in millions)
------------------------
Three Months
Ended March 31
------------------------
1995 1994
-------- --------
Human and Animal Health Products and
Services:
Cardiovasculars ........................ $1,308.4 $1,233.7
Anti-ulcerants ......................... 273.1 378.7
Antibiotics ............................ 229.4 185.8
Vaccines/biologicals ................... 96.7 103.6
Ophthalmologicals ...................... 110.8 97.3
Anti-inflammatories/analgesics ......... 39.9 56.3
Other Merck human health ............... 162.6 102.2
Other human health ..................... 1,332.6 1,008.5
Animal health/crop protection .......... 224.6 248.9
-------- --------
3,778.1 3,415.0
Specialty Chemical Products .............. 39.2 99.3
-------- --------
$3,817.3 $3,514.3
======== ========
Sales by therapeutic class include Medco sales of Merck products. Medco
sales of non-Merck products are included in Other human health. In 1995,
Medco sales of Astra Merck products are included in Other human health
due to the formation of the Astra Merck joint venture.
4. In the first quarter of 1995, the Company recorded a nonrecurring pretax
restructuring charge of $175.0 million, or $.09 per share (after-tax).
The restructuring actions will involve manufacturing facility
consolidation, rationalization and workforce reduction in Europe and the
United States. The consolidation and rationalization actions, which will
be completed by 1999, involve fixed asset write-off and closure costs.
The restructuring charge includes $31.0 million directly related to the
elimination of approximately 450 positions. This workforce reduction is
expected to reduce annual employment costs by approximately $29.0
million. The total initiative is expected to result in substantial
additional production related savings and will not materially impact the
Company's liquidity.
- 4 -
<PAGE>
Notes to Financial Statements (continued)
5. In the first quarter of 1995, the Company sold its Calgon Vestal
Laboratories business to Bristol-Myers Squibb for $261.5 million and its
Kelco business to Monsanto for $1.075 billion. The sale of Calgon Vestal
Laboratories was completed on January 3, and the sale of Kelco was
completed on February 17. These divestitures resulted in pretax gains of
$682.9 million recorded in the first quarter. The sale of these Specialty
Chemical businesses did not have a significant impact on the Company's
financial position and will not significantly impact ongoing results of
operations.
6. Other (income) expense, net, consisted of:
($ in millions)
----------------------
Three Months
Ended March 31
----------------------
1995 1994
------ ------
Interest income ................................... $(50.2) $(35.2)
Interest expense .................................. 22.1 30.9
Exchange losses ................................... 6.1 17.2
Minority interests ................................ 18.8 12.5
Amortization of goodwill and other intangibles .... 47.8 43.3
Other, net ........................................ 400.4 (44.5)
------ ------
$445.0 $ 24.2
====== ======
Minority interests include third parties' share of exchange gains and
losses arising from translation of the financial statements into U.S.
dollars.
Other, net includes $500.5 million of nonrecurring charges consisting of
$278.5 million for estimated losses on sales of assets, $161.2 million for
endowment of The Merck Company Foundation and $60.8 million for settlement
of claims.
Interest paid for the three-month periods ended March 31, 1995 and 1994
was $13.8 million and $17.5 million, respectively.
7. Income taxes paid for the three-month periods ended March 31, 1995
and 1994 were $673.2 million and $228.5 million, respectively.
8. Legal proceedings to which the Company is a party are discussed in Part I
Item 3, Legal Proceedings, in the Annual Report on Form 10-K. There were
no material developments in the three-month period ended March 31, 1995.
- 5 -
<PAGE>
MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION
Earnings per share for the first quarter of 1995 were $0.61, an increase of 13%
over the first quarter of 1994. First quarter net income was $757.4 million, up
12% over the first quarter of 1994.
Sales for the quarter were $3.8 billion, up 9% from the same period last year.
Sales growth for the first quarter was affected by the formation of the Astra
Merck joint venture and the sale of Synetic, a Medco subsidiary, in the fourth
quarter of 1994 and the sale of Calgon Vestal Laboratories and Kelco in the
first quarter of 1995. Adjusting for these effects, sales were up 17% over the
first quarter of 1994.
Sales growth for the quarter was led by newer products and the continued growth
of the Merck-Medco Managed Care business. Both domestic and international
operations reported solid unit volume gains. Foreign exchange increased first
quarter sales by two percentage points. The effect of pricing actions reduced
the first quarter sales growth by two percentage points, primarily as a result
of sales of human and animal health products in certain international markets
and competitive pressures in the United States. Excluding exchange and adjusting
for the effect of the Astra Merck joint venture formation, sales of Merck human
and animal health products increased 7% for the first quarter.
Sales outside the United States accounted for 33% of 1995 first quarter sales,
compared with 31% for the same period last year.
Income growth for the quarter resulted from strong unit volume gains, favorable
product mix in Merck's human and animal health business and a positive effect
from exchange. The unfavorable effects of price and inflation were partially
offset by cost controls and productivity improvements.
The growth in pretax income was adversely affected by the inclusion of the
Company's share of taxes related to the Astra Merck joint venture and the
European vaccine joint venture with Pasteur Merieux Serums & Vaccins, both
formed in the fourth quarter of 1994. Prior to the formation of these joint
ventures, the taxes related to these businesses were included in the Company's
tax provision. The adverse effect on pretax growth, however, is offset by a
corresponding reduction in the Company's tax rate in 1995, resulting in no
effect on net income growth.
In the first quarter, the Company sold its Calgon Vestal Laboratories business
to Bristol-Myers Squibb for $261.5 million and its Kelco business to Monsanto
for $1.075 billion. The sale of Calgon Vestal Laboratories was completed on
January 3, and the sale of Kelco was completed on February 17. These
divestitures resulted in pretax gains of $682.9 million recorded in the first
quarter. The sale of these Specialty Chemical businesses did not have a
significant impact on the Company's financial position and will not
significantly impact ongoing results of operations.
The gains on the Kelco and Calgon Vestal Laboratories divestitures were largely
offset by a $175.0 million nonrecurring pretax restructuring charge, $278.5
million for estimated losses on sales of assets, $161.2 million for endowment of
The Merck Company Foundation, and $60.8 million for settlement of claims. The
restructuring actions will involve manufacturing facility consolidation,
rationalization and workforce reduction in Europe and the United States. The
workforce reduction is expected to reduce annual employment costs by
approximately $29.0 million. Near-term workforce reductions will occur primarily
outside the United States. The consolidation and rationalization actions, which
are an extension of initiatives from the 1993 restructuring program to
additional locations, will be completed by 1999 and involve fixed asset
write-off and closure costs. The total initiative is expected to result in
substantial additional production related savings and will not materially impact
the Company's liquidity.
Results for the first quarter were paced by unit sales gains by 'Vasotec',
'Vaseretic', 'Zocor', 'Pepcid', 'Primaxin' and 'Proscar'. Significant volume
growth in the Merck-Medco Managed Care business added to the first quarter sales
increase as well.
'Vasotec', Merck's angiotensin converting enzyme (ACE) inhibitor for reducing
high blood pressure and treating heart failure, continued its strong growth in
1995. It continues to be the leading branded product in the worldwide
cardiovascular market.
- 6 -
<PAGE>
MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION (continued)
Together, Merck's cholesterol-lowering agents, 'Mevacor' and 'Zocor' hold about
40% of the worldwide cholesterol-lowering market and combined continued strong
sales growth for the first quarter of 1995. At the end of 1994, 'Mevacor' and
'Zocor' were the number one and number two cholesterol-lowering drugs,
respectively, in total purchases in the United States.
Results from the landmark Scandinavian Simvastatin ('Zocor') Survival Study (4S)
demonstrated that reducing cholesterol with 'Zocor' in patients with established
coronary heart disease and elevated cholesterol is a cost-effective way to save
lives. The study showed 'Zocor' reduced the overall risk of death by 30% and the
risk of coronary death by 42%. Applications have been filed with the U.S. Food
and Drug Administration (F.D.A.) and other regulatory agencies throughout the
world to seek an indication for our labeling. In addition, new outcomes research
data presented at the Annual Meeting of the American College of Cardiology in
March 1995 showed that treatment with 'Zocor' in the 4S study reduced by 32% the
number of coronary heart disease hospitalizations.
Unit sales for 'Mevacor', however, were down for the quarter due to strong
competition. 'Mevacor' is the most widely prescribed cholesterol-lowering agent
in the treatment of patients with elevated cholesterol in the United States. In
early 1995 Merck received clearance from the F.D.A. to market 'Mevacor' as the
only lipid-lowering drug indicated to slow the progression of atherosclerosis
(clogging of the arteries) in patients with coronary artery disease and elevated
cholesterol as part of a treatment plan to reduce elevated cholesterol levels.
'Pepcid', an H2-receptor antagonist for treatment of duodenal ulcers and the
short-term treatment of gastric ulcers and gastroesophageal reflux disease
(GERD), continues to grow rapidly in the United States and maintains its
position against strong competition outside the United States. 'Pepcid AC', an
over-the-counter (OTC) formulation, was approved for marketing by the F.D.A. in
late April, and the product will be launched by the Johnson & Johnson and Merck
joint venture in the United States in June. 'Pepcid AC' has been launched and is
being marketed by a European Johnson & Johnson and Merck joint venture company
in the United Kingdom.
'Proscar', the only drug indicated to treat the symptoms of benign prostate
enlargement that also shrinks the prostate, continued strong volume growth. The
F.D.A. has granted clearance for revised prescribing information for 'Proscar'.
The revised labeling cites clinical evidence that the majority of men taking
'Proscar' experience statistically significant improvement in urinary symptoms
as measured by total symptom score, some in as little as two weeks after
beginning therapy. Information added to the updated prescribing information for
'Proscar' was based on the analysis of patients treated in the 12-month
placebo-controlled clinical trials with 'Proscar' and open extensions providing
data for 36 months and, in a smaller group of patients, for 48 months. 'Proscar'
has been introduced in nearly every major market including the United States.
The Company is continuing an extensive medical and consumer education program
worldwide about the disease and treatment with 'Proscar'.
'Fosamax', Merck's new medicine for the treatment of osteoporosis in
postmenopausal women, has been launched in Italy and Mexico, cleared for
marketing in three Latin American countries, and regulatory filings have been
made in 44 countries to date, including the United States where we are
optimistic about early consideration for this important medicine. Data from
completed three-year treatment studies indicate that patients treated with
'Fosamax' gained significantly in bone mineral density of the spine and hip
compared with placebo-treated patients, whose bone mineral density decreased.
Increases in bone mass were progressive over the three years of the studies, and
the quality of bone formed during treatment was normal.
'Cozaar'*, Merck's new antihypertensive product, was cleared for marketing
by the F.D.A. in mid-April, and the product will be launched in the United
States in early May. 'Cozaar' has already been launched in
- -------------
*'Cozaar' is a registered trademark and Hyzaar(TM) is a trademark of E.I.
du Pont de Nemours and Company, Wilmington, DE, USA.
- 7 -
<PAGE>
MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION (continued)
Denmark, Norway, Sweden and the United Kingdom and has been cleared for
marketing in Switzerland, France, Holland, Russia and Iceland. Hyzaar(TM), a
combination of 'Cozaar' and hydrochlorothiazide (a diuretic), was approved for
marketing by the F.D.A. in late April, and the product will be launched in the
United States in May. Applications are currently pending in other countries.
'Cozaar' is the first in a new class of drugs that blocks a potent hormone,
called angiotensin II, resulting in smooth blood pressure reduction. In clinical
studies, 'Cozaar' and Hyzaar(TM) had excellent tolerability profiles. Those
patients taking 'Cozaar' had a low incidence of certain adverse reactions that
are characteristic of other antihypertensive treatments. In clinical trials,
once-daily 'Cozaar' was effective in lowering blood pressure. 'Cozaar' has been
developed in collaboration with The DuPont Merck Pharmaceutical Company.
In March, the F.D.A. licensed Merck to market 'Varivax', a live-virus vaccine,
for protection against chickenpox in healthy individuals (12 months of age and
older) who have not had the disease. The vaccine was made available to
physicians' offices starting May 1. On April 10, the American Academy of
Pediatrics (AAP) announced that it is recommending universal use of 'Varivax',
and that it will become a standard part of the AAP's recommended childhood
immunization schedule. According to a study commissioned by the Centers for
Disease Control and Prevention (CDC), every dollar invested in immunizing
against chickenpox will save $5.40 in costs associated with potential work-loss
and medical care.
'Trusopt', the first in a new class of topical drugs to treat elevated
intraocular pressure in patients with glaucoma, has been cleared for marketing
in 11 countries, including the United States. It has an excellent systemic
safety profile, and can be used as add-on therapy for patients who use other
ophthalmic drug products or as monotherapy.
Unit sales declined for a group of longer-established human health products due
to competition.
The Merck-Medco Managed Care Division currently manages pharmaceutical benefits
for more than 40 million plan participants, up from 33 million at the time of
the merger announcement in July of 1993, due to increased penetration across all
major market segments. Merck-Medco continues to expand the number of patients
participating in disease management programs. These programs are based on
patient, pharmacist and physician communication and intervention to improve
patient outcomes and lower the long-term costs of care associated with high-cost
chronic diseases.
- 8 -
<PAGE>
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Number Description Method of Filing
------ ----------- ----------------
11 Computation of Earnings Filed with this document
Per Common Share
12 Computation of Ratios of Filed with this document
Earnings to Fixed Charges
27 Financial Data Schedule Filed with this document
(b) Report on Form 8-K
During the three-month period ending March 31, 1995, no current
reports on Form 8-K were filed.
- 9 -
<PAGE>
SIGNATURES
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.
MERCK & CO., INC.
/s/ Mary M. McDonald
--------------------
Date: May 10, 1995 MARY M. McDONALD
Senior Vice President and General Counsel
/s/ Peter E. Nugent
-------------------
Date: May 10, 1995 PETER E. NUGENT
Vice President, Controller
- 10 -
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------- ------------
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
Exhibit 11
MERCK & CO., INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
(In millions except per share amounts)
Three Months
Ended March 31
-------------------
1995 1994
-------- --------
Net Income and Adjusted Earnings:
Net Income ............................................... $ 757.4 $ 675.2
Effect on Earnings of Compensation Expense Relating to
Certain Stock Option and Incentive Plans ................ 2.8 2.5
Effect on Earnings of Interest on
Debentures Issued by Medco ............................. -- .1
-------- --------
Adjusted Earnings for Fully Diluted Earnings Per Share ... $ 760.2 $ 677.8
======== ========
Weighted Average Shares and Share Equivalents Outstanding:
Weighted Average Shares Outstanding (As Reported) ........ 1,242.6 1,255.2
Common Share Equivalents Issuable Under Stock Option and
Incentive Plans ........................................ 20.0 16.6
Common Share Equivalents Issuable on Assumed Conversion
of Debentures Issued by Medco ........................... .6 3.0
-------- --------
Weighted Average Shares and Share Equivalents
Outstanding ............................................. 1,263.2 1,274.8
======== ========
Earnings Per Share (As Reported):
Net Income ............................................... $ .61 $ .54
======== ========
Fully Diluted Earnings Per Share: (a)
Fully Diluted Earnings Per Share ......................... $ .60 $ .53
======== ========
(a) This calculation is submitted in accordance with the regulations of the
Securities and Exchange Commission although not required by APB Opinion
No.15 because it results in dilution of less than 3%.
Exhibit 12
<TABLE>
MERCK & CO., INC. AND SUBSIDIARIES
Computation of Ratios of Earnings to Fixed Charges
(In millions except ratio data)
<CAPTION>
Three Months
Ended Years Ended December 31
March 31 ------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
-------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Income Before Taxes
and Cumulative Effect
of Accounting Changes .............. $1,095.8 $4,415.2 $3,102.7 $3,563.6 $3,166.7 $2,698.8
Add:
One-third of rents ................. 9.4 36.0 35.0 34.0 31.1 26.5
Interest expense, net .............. 12.0 96.0 48.0 23.6 26.0 51.9
-------- -------- -------- -------- -------- --------
Earnings ......................... $1,117.2 $4,547.2 $3,185.7 $3,621.2 $3,223.8 $2,777.2
======== ======== ======== ======== ======== ========
One-third of rents ................... $ 9.4 $ 36.0 $ 35.0 $ 34.0 $ 31.1 $ 26.5
Interest expense ..................... 22.1 124.4 84.7 72.7 68.7 69.8
-------- -------- -------- -------- -------- --------
Fixed Charges .................... $ 31.5 $ 160.4 $ 119.7 $ 106.7 $ 99.8 $ 96.3
======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges ... 35 28 27 34 32 29
== == == == == ==
</TABLE>
For purposes of computing these ratios, "earnings" consist of income before
taxes, cumulative effect of accounting changes, one-third of rents (deemed by
the Company to be representative of the interest factor inherent in rent), and
interest expense, net of amounts capitalized. "Fixed charges" consist of
one-third of rents and interest expense as reported in the Company's
consolidated financial statements.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE INTERIM
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND
THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,221
<SECURITIES> 824
<RECEIVABLES> 2,052
<ALLOWANCES> 0 <F1>
<INVENTORY> 1,673
<CURRENT-ASSETS> 7,473
<PP&E> 7,042
<DEPRECIATION> (2,191)
<TOTAL-ASSETS> 21,720
<CURRENT-LIABILITIES> 5,316
<BONDS> 1,168
<COMMON> 4,643
0
0
<OTHER-SE> 6,405
<TOTAL-LIABILITY-AND-EQUITY> 21,720
<SALES> 3,817
<TOTAL-REVENUES> 3,817
<CGS> 1,726
<TOTAL-COSTS> 1,726
<OTHER-EXPENSES> 288
<LOSS-PROVISION> 0 <F1>
<INTEREST-EXPENSE> 22
<INCOME-PRETAX> 1,096
<INCOME-TAX> 338
<INCOME-CONTINUING> 757
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 757
<EPS-PRIMARY> .61
<EPS-DILUTED> .60
<FN>
<F1> NOT MATERIAL TO THE CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
