-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KBEj+MveZfe1TlfeD6g5SB3jE6jG1PsE/SDXyuBYask7QYJWsPMyWuFxBDqkYrA7 wzKlCLr9/zerSSGFKzG7PA== 0000950123-95-003283.txt : 19951119 0000950123-95-003283.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950123-95-003283 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCK & CO INC CENTRAL INDEX KEY: 0000064978 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 221109110 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03305 FILM NUMBER: 95590458 BUSINESS ADDRESS: STREET 1: ONE MERCK DR STREET 2: P O BOX 100 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 BUSINESS PHONE: 9084234044 MAIL ADDRESS: STREET 1: ONE MERCK DR STREET 2: PO BOX 100 WS3AB-05 CITY: WHITEHOUSE STATION STATE: NJ ZIP: 08889-0100 10-Q 1 FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 1995 1 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 September 30, 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 October 31, 1995. Class Number of Shares Outstanding ----- ---------------------------- Common Stock 1,231,317,572 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 ------ ------ 2 Part I - Financial Information - ------------------------------ MERCK & CO., INC. AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENT OF INCOME THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 -------------------------------------------------------------- ($ in millions except per share amounts)
Three Months Nine Months Ended September 30 Ended September 30 ----------------------- ------------------------- 1995 1994 1995 1994 -------- -------- --------- --------- Sales $4,171.1 $3,792.0 $12,124.1 $11,098.3 -------- -------- --------- --------- Costs, Expenses and Other Materials and production 1,858.2 1,451.9 5,330.4 4,436.1 Marketing and administrative 767.2 820.7 2,386.8 2,303.3 Research and development 332.5 308.4 950.4 865.6 Restructuring charge - - 175.0 - Gains on sales of Specialty Chemical businesses - - (682.9) - Other (income) expense, net (33.8) 39.3 380.1 163.8 -------- -------- --------- --------- 2,924.1 2,620.3 8,539.8 7,768.8 -------- -------- --------- --------- Income Before Taxes 1,247.0 1,171.7 3,584.3 3,329.5 Taxes on Income 385.1 386.9 1,106.9 1,105.4 -------- -------- --------- --------- Net Income $ 861.9 $ 784.8 $ 2,477.4 $ 2,224.1 ======== ======== ========= ========= Per Share of Common Stock: Net Income $.70 $.62 $2.00 $1.77 Dividends Declared $.34 $.30 $ .94 $.86 Average Number of Common Shares Outstanding (millions) 1,234.2 1,260.9 1,238.0 1,257.9
The accompanying notes are an integral part of this financial statement. - 1 - 3 MERCK & CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1995 AND DECEMBER 31, 1994 ---------------------------------------- ($ in millions)
September 30 December 31 1995 1994 ------------ ------------ ASSETS Current Assets Cash and cash equivalents $ 1,906.1 $ 1,604.0 Short-term investments 1,011.1 665.7 Accounts receivable 2,242.1 2,351.5 Inventories 1,764.4 1,660.9 Prepaid expenses and taxes 830.7 639.6 --------- --------- Total current assets 7,754.4 6,921.7 --------- --------- Investments 1,480.2 1,416.9 Property, Plant and Equipment, at cost, net of allowance for depreciation of $2,433.3 in 1995 and $2,376.6 in 1994 5,113.3 5,296.3 Goodwill and Other Intangibles, net of accumulated amortization of $367.1 in 1995 and $291.1 in 1994 6,969.5 7,212.3 Other Assets 1,128.3 1,009.4 --------- --------- $22,445.7 $21,856.6 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $ 3,064.8 $ 2,715.4 Loans payable and current portion of long-term debt 391.7 146.7 Income taxes payable 1,784.8 2,206.5 Dividends payable 419.4 380.0 --------- --------- Total current liabilities 5,660.7 5,448.6 --------- --------- Long-Term Debt 1,337.1 1,145.9 --------- --------- Deferred Income Taxes and Noncurrent Liabilities 2,657.1 2,914.3 --------- --------- Minority Interests 1,274.0 1,208.8 --------- --------- Stockholders' Equity Common stock Authorized - 2,700,000,000 shares Issued - 1,483,463,303 shares - 1995 - 1,483,167,594 shares - 1994 4,683.5 4,667.8 Retained earnings 12,282.3 10,942.0 --------- --------- 16,965.8 15,609.8 Less treasury stock, at cost 251,571,991 shares - 1995 235,341,571 shares - 1994 5,449.0 4,470.8 --------- --------- Total stockholders' equity 11,516.8 11,139.0 --------- --------- $22,445.7 $21,856.6 ========= =========
The accompanying notes are an integral part of this financial statement. - 2 - 4 MERCK & CO., INC. AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 --------------------------------------------- ($ in millions)
Nine Months Ended September 30 --------------------------- 1995 1994 --------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,477.4 $ 2,224.1 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 527.0 610.4 Net changes in assets and liabilities (704.6) 301.9 --------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,791.9 3,136.4 --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (664.4) (720.2) Purchase of securities, subsidiaries and other investments (8,503.7) (10,940.9) Proceeds from sale of securities, subsidiaries and other investments 8,120.4 10,700.4 Proceeds from sales of Specialty Chemical businesses, net of cash transferred 1,321.1 - Other (105.5) (47.5) --------- ---------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 167.9 (1,008.2) --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Net change in short-term borrowings (43.1) (779.4) Proceeds from issuance of debt 512.2 179.1 Payments on debt (50.8) (131.0) Purchase of treasury stock (1,205.9) (109.1) Dividends paid to stockholders (1,120.4) (1,055.0) Other 217.0 69.9 --------- --------- NET CASH USED BY FINANCING ACTIVITIES (1,691.0) (1,825.5) --------- ---------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 33.3 80.9 --------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS 302.1 383.6 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,604.0 829.4 --------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,906.1 $ 1,213.0 ========= ==========
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 - 5 Notes to Financial Statements (continued) - ----------------------------- 2. Inventories consisted of:
($ in millions) ------------------------------------ September 30 December 31 1995 1994 ------------ ----------- Finished goods $ 974.6 $ 926.7 Raw materials and work in process 707.8 684.7 Supplies 82.1 65.6 -------- -------- Total (approximates current cost) 1,764.5 1,677.0 Reduction to LIFO cost .1 16.1 -------- -------- $1,764.4 $1,660.9 ======== ========
3. In September 1995, the Company issued $500 million of 6.75% ten-year Euronotes. Proceeds from the sale of these securities will be used for general corporate purposes. 4. Sales consisted of:
($ in millions) ------------------------------------------------------ Three Months Nine Months Ended September 30 Ended September 30 ---------------------- ------------------------ 1995 1994 1995 1994 -------- -------- --------- ---------- Cardiovasculars $1,512.0 $1,314.8 $ 4,464.6 $ 3,850.4 Anti-ulcerants 273.5 465.8 748.7 1,293.2 Antibiotics 210.6 202.0 643.4 603.3 Vaccines/biologicals 162.0 155.9 405.4 373.9 Ophthalmologicals 148.9 128.6 399.9 345.4 Anti-inflammatories/analgesics 42.2 64.2 122.5 192.8 Other Merck human health 121.6 85.0 388.0 321.7 Other human health 1,421.0 999.2 4,147.8 3,042.4 Animal health/crop protection 279.3 269.0 764.6 765.4 Specialty chemical - 107.5 39.2 309.8 -------- -------- --------- --------- $4,171.1 $3,792.0 $12,124.1 $11,098.3 ======== ======== ========= =========
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. 5. 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 - 6 Notes to Financial Statements (continued) - ----------------------------- 6. 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 $682.9 million recorded in the first quarter. These Specialty Chemical businesses were not significant to the Company's financial position, liquidity or results of operations. 7. Other (income) expense, net, consisted of:
($ in millions) --------------------------------------------------- Three Months Nine Months Ended September 30 Ended September 30 ----------------------- ---------------------- 1995 1994 1995 1994 -------- -------- -------- ------- Interest income $ (44.4) $ (37.0) $(141.0) $(111.0) Interest expense 22.8 31.0 67.9 97.0 Exchange (gains)/losses (2.0) (6.1) (4.0) 26.9 Minority interests 25.7 19.1 78.6 72.5 Amortization of goodwill & other intangibles 47.6 44.7 142.9 131.9 Other, net (83.5) (12.4) 235.7 (53.5) ------- ------- ------- ------- $ (33.8) $ 39.3 $ 380.1 $ 163.8 ======= ======= ======= =======
Minority interests include third parties' share of exchange gains and losses arising from translation of the financial statements into U.S. dollars. Other, net for the nine-month period ended September 30, 1995 includes $500.5 million of nonrecurring charges consisting of $278.5 million for 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 nine-month periods ended September 30, 1995 and 1994 was $51.6 million and $84.7 million, respectively. 8. Income taxes paid for the nine-month periods ended September 30, 1995 and 1994 were $1.675 billion and $624.0 million, respectively. The increase in 1995 is principally due to taxes paid in 1995 on the 1994 gain on the sale to Astra AB of an interest in a joint venture and 1995 gains on the sales of the Specialty Chemical businesses. 9. 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 nine-month period ended September 30, 1995. - 5 - 7 MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION ------------------------------------------------------ Earnings per share for the third quarter of 1995 were $0.70, an increase of 13% over the third quarter of 1994. Third quarter net income increased 10% to $861.9 million. Sales for the quarter were $4.2 billion, up 10% from the same period last year. For the first nine months, earnings per share were $2.00, an increase of 13% from the first nine months of 1994. Net income was $2,477.4 million for the first nine months of 1995, an increase of 11% from the first nine months of 1994. Sales rose 9% to $12.1 billion. Sales growth for the quarter and first nine months 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 sales of Calgon Vestal Laboratories and Kelco in the first quarter of 1995. Adjusting for these effects, sales for the third quarter and first nine months increased 23% and 19%, respectively. Sales growth for the quarter and the first nine months of 1995 was led by newer products, recent product introductions and the continued growth of the Merck-Medco Managed Care business. Both our domestic and international operations reported solid unit volume gains. Foreign exchange contributed two percentage points to the third quarter sales growth compared to a three percentage point increase in the second quarter of 1995. Pricing actions had essentially no effect on third quarter sales growth. However, the effect of pricing actions over the past nine months reduced sales growth during that period by one percentage point. Excluding exchange and adjusting for the effect of the Astra Merck joint venture formation, sales of Merck human and animal health products increased 11% and 9% for the third quarter and nine months, respectively. Sales outside the United States accounted for 33% of the first nine months of 1995 sales, compared with 32% for the same period last year. Income growth for the first nine months resulted from strong unit volume gains, favorable product mix in Merck's human and animal health business and a favorable effect from exchange. The unfavorable effects of price and inflation were partially offset by cost controls and productivity improvements. The growth in pretax income for the third quarter and first nine months was reduced 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 reduction in 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. Results for the first nine months were paced by unit sales gains by 'Vasotec', 'Vaseretic', 'Zocor', 'Pepcid', 'Primaxin' and 'Proscar'. The introduction of 'Varivax', 'Cozaar'*, Hyzaar(TM)* and 'Trusopt' in the U.S. in the second quarter of 1995 also added to the first nine months' sales gain. Significant volume growth in the Merck-Medco Managed Care business added to the first nine months' 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 for the first nine months of 1995. It continues to be the leading branded product in the worldwide cardiovascular market. Together, Merck's cholesterol-lowering agents, 'Mevacor' and 'Zocor', hold 40% of the worldwide cholesterol-lowering market, and combined, continued strong sales growth during the third quarter of 1995. Unit sales for 'Mevacor' were down primarily in the U.S. due to strong competition. 'Mevacor' and 'Zocor' are the number one and two cholesterol-lowering drugs, respectively, in total purchases in the United States. *'Cozaar' is a registered trademark and Hyzaar(TM) is a trademark of E.I. du Pont de Nemours and Company, Wilmington, DE, USA. - 6 - 8 MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION (continued) - ------------------------------------------------------ 'Zocor' continues to demonstrate strong growth worldwide since the results of the landmark Scandinavian Simvastatin Survival Study (4S) were presented at the American Heart Association (AHA) last year. Several countries have approved a new indication for 'Zocor' based on 4S, and in late June the U.S. Food and Drug Administration (FDA) cleared 'Zocor' as the first and only cholesterol-lowering medication indicated to save lives and prevent heart attacks in people with heart disease and high cholesterol. With less than one-third of patients with existing coronary disease currently receiving cholesterol-lowering therapy, there remains a potential for continued growth of 'Zocor'. 'Proscar', the only drug indicated to treat the symptoms of benign prostate enlargement that also shrinks the prostate, continued strong volume growth. Earlier this year, the FDA granted clearance for revised prescribing information for 'Proscar', citing 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. In May, Merck began shipping 'Varivax', a live virus vaccine for the prevention of chickenpox in healthy children (12 months or older), adolescents and adults. The vaccine was approved by the FDA in March 1995. Shortly thereafter, the American Academy of Pediatrics recommended 'Varivax' for universal use in early childhood, susceptible older children and adolescents. The Advisory Committee on Immunization Practices of the Centers for Disease Control (CDC) issued a similar recommendation for children, and added select at risk adults. 'Cozaar' and Hyzaar(TM), a combination of 'Cozaar' and hydrochlorothiazide (a diuretic), were cleared for marketing in the United States by the FDA in April, and these new antihypertensive products were launched in the U.S. in May. 'Cozaar' has also been launched in France, Denmark, Iceland, Norway, Sweden, Switzerland, Holland and the United Kingdom. To date, 'Cozaar' and Hyzaar(TM) have been well accepted. 'Cozaar' is the first in a new class of drugs called Angiotensin-II (A-II) receptor blockers. In clinical studies, 'Cozaar' and Hyzaar(TM) had excellent tolerability profiles and were highly effective. 'Cozaar' and Hyzaar(TM) have been developed in collaboration with the DuPont Merck Pharmaceutical Company. 'Trusopt', the first carbonic anhydrase inhibitor made in a topical, or eyedrop, formulation was launched by Merck in mid-May in the United States. It has also been launched in several European countries. Initial sales of 'Trusopt' are strong. 'Trusopt' is indicated for the treatment of elevated intraocular pressure in patients with ocular hypertension or open-angle glaucoma. 'Trusopt' has proven effective in the consistent lowering of intraocular pressure in most patients and may be used both as monotherapy and adjunctive therapy. 'Pepcid', an H(2)-receptor antagonist for treatment of duodenal ulcers and the short-term treatment of gastric ulcers and gastroesophageal reflux disease (GERD), continues to demonstrate strong performance despite competition from generic cimetidine, newer antisecretory agents and the introduction of over-the-counter (OTC) H(2) antagonists. Pepcid AC Acid Controller(TM), a non-prescription formulation of 'Pepcid', was launched in May 1995 by Johnson & Johnson Merck Consumer Pharmaceuticals Co. Pepcid AC Acid Controller(TM) is the only OTC product that has been shown to both relieve and prevent heartburn and acid indigestion. Strong initial sales can be attributed to consumer satisfaction and acceptance of the product by doctors and pharmacists. 'Fosamax', a breakthrough prescription medicine to treat osteoporosis in women after menopause, was cleared for marketing in the United States by the FDA in late September and was launched in mid-October. 'Fosamax' builds healthy bone, restoring some of the bone lost as a result of osteoporosis. 'Fosamax' is a new treatment choice and the first nonhormonal medicine for women after menopause who have this bone-weakening disease, which leads to osteoporotic fractures in more than one in three women over the age of 50. - 7 - 9 MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION (continued) - ------------------------------------------------------ Results from two three-year pivotal studies supported the conclusion that 'Fosamax' built healthy bone at the spine and hip and significantly increased bone mineral density at other sites, suggesting that the gains in bone mineral density at the spine and hip did not occur because of a loss of bone mineral density elsewhere in the skeleton. While these studies were not designed to detect fracture risk, further analysis showed that 'Fosamax' reduced by 48 percent the number of women who suffered new spinal fractures compared with women treated with placebo. The Merck-Medco Managed Care Division continues to increase its penetration across all major market segments. Medco's service to the rapidly expanding health maintenance organization market is increasing significantly, and a number of major new accounts, such as Intermountain Health Care, Central Mass Health Care, Companion Health Care, First Option Health Plan and Gateway Health Plan have been gained. In September 1995, the Company issued $500 million of ten-year Euronotes bearing a coupon of 6.75% payable annually. Proceeds from the sale of these securities will be used for general corporate purposes. Funds not immediately required for such purposes may be invested temporarily in short-term securities. In October 1995, the Company sold its Medco Behavioral Care (MBC) business to MBC management and Kohlberg Kravis Roberts & Co. for $340 million. The sale of this business will not have a significant impact on the Company's financial position and will not significantly impact ongoing results of operations. - 8 - 10 Part II - Other Information - --------------------------- Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits --------
Number Description Method of Filing ------ ----------- ---------------- 3(a) Restated Certificate of Incorporated by reference to Form 10-K Incorporation of Merck & Co., Inc. Annual Report for the fiscal year ended (May 6, 1992) December 31, 1992 3(b) By-Laws of Merck & Co., Inc. Incorporated by reference to Form 10-K (as amended effective Annual Report for the fiscal year ended June 9, 1994) December 31, 1994 11 Computation of Earnings Per Filed with this document Common Share 12 Computation of Ratios of Filed with this document Earnings to Fixed Charges 27 Financial Data Schedule Filed with this document
(b) Reports on Form 8-K ------------------- During the three-month period ending September 30, 1995, the following report was filed on Form 8-K under Item 5, Other Events: 1. In a report dated July 11, 1995 and filed July 19, 1995, the Registrant announced (a) the signing of a definitive agreement to divest its ownership of Medco Behavioral Care Corporation (MBC) to MBC management and Kohlberg Kravis Roberts & Co., and (b) the formation of a joint venture company to develop, market and implement comprehensive disease management and health management programs in several therapeutic categories, as announced by Wyeth-Ayerst Laboratories, a division of American Home Products Corporation, and Medco Containment Services, Inc., a subsidiary of the Registrant. - 9 - 11 Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of l934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MERCK & CO., INC. Date: November 13, 1995 /s/ Mary M. McDonald ----------------------------------------- Mary M. McDonald Senior Vice President and General Counsel Date: November 13, 1995 /s/ Peter E. Nugent ---------------------------------------- Peter E. Nugent Vice President, Controller - 10 - 12 EXHIBIT INDEX -------------
Exhibit Number Description ------ ----------- 3(a) Restated Certificate of Incorporation of Merck & Co., Inc. (May 6, 1992) -Incorporated by reference to Form 10-K Annual Report for the fiscal year ended December 31, 1992 3(b) By-Laws of Merck & Co., Inc. (as amended effective June 9, 1994) - Incorporated by reference to Form 10-K Annual Report for the fiscal year ended December 31, 1994 11 Computation of Earnings Per Common Share 12 Computation of Ratios of Earnings to Fixed Charges 27 Financial Data Schedule
EX-11 2 COMPUTATION OF EARNINGS PER COMMON SHARE 1 Exhibit 11 MERCK & CO., INC. AND SUBSIDIARIES Computation of Earnings Per Common Share ---------------------------------------- (In millions except per share amounts)
Three Months Nine Months Ended September 30 Ended September 30 ----------------------- ----------------------- 1995 1994 1995 1994 -------- -------- -------- --------- Net Income and Adjusted Earnings: - --------------------------------- Net Income.................................................. $ 861.9 $ 784.8 $2,477.4 $2,224.1 Effect on Earnings of Compensation Expense Relating to Stock Option and Incentive Plans.......................... 3.7 2.6 10.8 3.6 Effect on Earnings of Interest on Debentures................ - (.1) - .1 -------- -------- -------- --------- Adjusted Earnings for Fully Diluted Earnings Per Share...... $ 865.6 $ 787.3 $2,488.2 $2,227.8 ======== ======== ======== ========= Weighted Average Shares and Share Equivalents Outstanding: - ---------------------------------------------------------- Weighted Average Shares Outstanding (As Reported)........... 1,234.2 1,260.9 1,238.0 1,257.9 Common Share Equivalents Issuable Under Stock Option and Incentive Plans .......................................... 28.0 18.8 28.0 18.7 Common Share Equivalents Issuable on Assumed Conversion of Debentures................................................ .4 1.3 .4 1.3 -------- -------- -------- -------- Weighted Average Shares and Share Equivalents Outstanding... 1,262.6 1,281.0 1,266.4 1,277.9 ======== ======== ======== ======== Earnings Per Share (As Reported)............................ $ .70 $ .62 $ 2.00 $ 1.77 ======== ======== ======== ======== Fully Diluted Earnings Per Share (a)........................ $ .69 $ .61 $ 1.96 $ 1.74 ======== ======== ======== ========
(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%. EX-12 3 COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES 1 Exhibit 12 MERCK & CO., INC. AND SUBSIDIARIES Computation Of Ratios Of Earnings To Fixed Charges -------------------------------------------------- (In millions except ratio data)
Nine Months Ended Years Ended December 31 September 30 --------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 ------------ -------- -------- -------- -------- --------- Income Before Taxes and Cumulative Effect of Accounting Changes $3,584.3 $4,415.2 $3,102.7 $3,563.6 $3,166.7 $2,698.8 Add: One-third of rents 28.2 36.0 35.0 34.0 31.1 26.5 Interest expense, net 38.5 96.0 48.0 23.6 26.0 51.9 -------- -------- -------- -------- -------- -------- Earnings $3,651.0 $4,547.2 $3,185.7 $3,621.2 $3,223.8 $2,777.2 ======== ======== ======== ======== ======== ======== One-third of rents $28.2 $ 36.0 $ 35.0 $ 34.0 $31.1 $26.5 Interest expense 67.9 124.4 84.7 72.7 68.7 69.8 ----- ------ ------ ------ ----- ----- Fixed Charges $96.1 $160.4 $119.7 $106.7 $99.8 $96.3 ===== ====== ====== ====== ===== ===== Ratio of Earnings to Fixed Charges 38 28 27 34 32 29 == == == == == ==
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 rents), 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. EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE INTERIM CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND THE CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 9-MOS DEC-31-1995 SEP-30-1995 1,906 1,011 2,242 0 1,764 7,661 7,546 (2,433) 22,352 5,721 1,337 4,684 0 0 6,833 22,352 12,124 12,124 5,330 5,330 950 0 68 3,584 1,107 2,477 0 0 0 2,477 2.00 1.96 NOT MATERIAL TO THE CONSOLIDATED FINANCIAL STATEMENTS.
-----END PRIVACY-ENHANCED MESSAGE-----