Merck & Co., Inc. - FORM 8-K - EX-99.2 - CERTAIN SUPPLEMENTAL INFORMATION NOT INCLUDED IN THE PRESS RELEASE

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8-K - FORM 8-K - Merck & Co., Inc.	d8k.htm
EX-99.1 - PRESS RELEASE ISSUED JULY 29, 2011 - Merck & Co., Inc.	dex991.htm

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

SECOND QUARTER 2010

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c


	GAAP			Acquisition- Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items ⁽³⁾			Adjustment Subtotal			Non-GAAP
Sales	$	11,346											$	—		$	11,346

Materials and production		4,549			1,662			224						1,886			2,663

Marketing and administrative		3,175			75									75			3,100

Research and development		2,179						144						144			2,035

Restructuring costs		526						526						526			—

Equity income from affiliates		(43	)											—			(43	)

Other (income) expense, net		(281	)		10						(443	)		(433	)		152

Income Before Taxes		1,241			(1,747	)		(894	)		443			(2,198	)		3,439

Taxes on Income		461												(242	) ⁽⁴⁾		703

Net Income		780												(1,956	)		2,736

Less: Net Income Attributable to Noncontrolling Interests		28												—			28

Net Income Attributable to Merck & Co., Inc.	$	752											$	(1,956	)	$	2,708

Earnings per Common Share Assuming Dilution	$	0.24														$	0.86	⁽⁵⁾

Average Shares Outstanding Assuming Dilution		3,125															3,125

Tax Rate		37.1	%														20.5	%

Merck is providing non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s performance. This information should be considered in addition to, but not in lieu of, information prepared in accordance with GAAP.

(1)

Amounts included in materials and production costs reflect expenses for the amortization of intangible assets and the amortization of purchase accounting adjustments to inventories recognized as a result of the merger. Amounts included in marketing and administrative expenses and other (income) expense, net reflect transaction and integration costs associated with mergers and acquisitions.

(2)	Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be sold or closed related to actions under the company’s formal restructuring programs.

(3)	Included in other (income) expense, net is $443 million of income recognized upon AstraZeneca’s asset option exercise.

(4)	Represents the estimated tax impact on the reconciling items.

(5)

The company calculates earnings per share pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. Net income attributable to Merck & Co., Inc. common shareholders used to calculate non-GAAP earnings per common share assuming dilution was $2,697 million for the second quarter of 2010.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

SIX MONTHS ENDED JUNE 30, 2010

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2d


	GAAP			Acquisition- Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items ⁽³⁾			Adjustment Subtotal			Non-GAAP
Sales	$	22,768											$	—		$	22,768

Materials and production		9,764			4,009			281						4,290			5,474

Marketing and administrative		6,397			154									154			6,243

Research and development		4,230			27			150						177			4,053

Restructuring costs		814						814						814			—

Equity income from affiliates		(180	)											—			(180	)

Other (income) expense, net		(113	)		17						(443	)		(426	)		313

Income Before Taxes		1,856			(4,207	)		(1,245	)		443			(5,009	)		6,865

Taxes on Income		746												(745	) ⁽⁴⁾		1,491

Net Income		1,110												(4,264	)		5,374

Less: Net Income Attributable to Noncontrolling Interests		59												—			59

Net Income Attributable to Merck & Co., Inc.	$	1,051											$	(4,264	)	$	5,315

Earnings per Common Share Assuming Dilution	$	0.33														$	1.69	⁽⁵⁾

Average Shares Outstanding Assuming Dilution		3,132															3,132

Tax Rate		40.2	%														21.7	%

(1)

Amounts included in materials and production costs reflect expenses for the amortization of intangible assets and the amortization of purchase accounting adjustments to inventories recognized as a result of the merger. Amounts included in research and development expenses represent in-process research and development (“IPR&D”) impairment charges. Amounts included in marketing and administrative expenses and other (income) expense, net reflect transaction and integration costs associated with mergers and acquisitions.

(2)	Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be sold or closed related to actions under the company’s formal restructuring programs.

(3)	Included in other (income) expense, net is $443 million of income recognized upon AstraZeneca’s asset option exercise.

(4)	Includes a charge of $147 million associated with a change in tax law enacted as part of U.S. health care reform legislation, as well as the estimated tax impact on the reconciling items.

(5)

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SECOND QUARTER 2011

(AMOUNTS IN MILLIONS)

Table 3a


	Global						U.S.						International
	2Q11		2Q10		% Change		2Q11		2Q10		% Change		2Q11		2Q10		% Change
TOTAL SALES ⁽¹⁾	$	12,151	$	11,346		7	$	5,006	$	4,864		3	$	7,145	$	6,482		10


PHARMACEUTICAL ⁽²⁾		10,360		9,638		7		4,088		4,026		2		6,271		5,612		12

Cardiovascular
Zetia		592		564		5		292		308		-5		300		256		17
Vytorin		459		490		-6		215		263		-19		244		227		8
Integrilin		56		70		-20		51		65		-22		5		5		10

Diabetes & Obesity
Januvia		779		600		30		423		380		11		356		220		62
Janumet		321		218		47		173		136		27		149		82		81

Diversified Brands
Cozaar / Hyzaar		406		485		-16		14		63		-77		392		423		-7
Zocor		107		117		-9		9		9		-2		98		108		-9
Propecia		112		113		-1		33		37		-10		79		77		3
Claritin Rx		65		58		12								65		58		12
Remeron		57		59		-4		1		2		-38		55		57		-3
Vasotec / Vaseretic		59		63		-6								59		63		-6
Proscar		53		56		-5		1		2		-52		52		54		-4

Infectious Disease
Isentress		337		267		26		171		130		31		166		137		21
Cancidas		168		150		12		6		14		-55		161		135		19
PegIntron		154		185		-17		10		25		-62		144		159		-10
Primaxin		136		158		-13		26		32		-17		110		125		-12
Invanz		103		83		24		51		43		18		52		40		30
Avelox		61		59		3		55		55		1		6		5		23
Noxafil		56		50		12		12		15		-19		44		35		25
Rebetol		48		55		-13								48		55		-13
Crixivan / Stocrin		50		48		4		1		2		-20		48		46		5

Neurosciences & Ophthalmology
Maxalt		131		133		-1		82		93		-12		49		40		22
Cosopt / Trusopt		122		123		-1		5		4		14		117		119		-2

Oncology
Temodar		234		271		-14		96		103		-7		138		168		-18
Emend		120		93		29		60		54		11		60		39		54
Intron A		47		51		-7		24		29		-18		24		22		9

Respiratory & Immunology
Singulair		1,354		1,258		8		869		830		5		485		427		14
Remicade		842		669		26								842		669		26
Nasonex		323		338		-4		148		196		-24		175		142		23
Clarinex		209		191		9		53		60		-11		156		132		18
Arcoxia		100		95		5								100		95		5
Simponi		75		18		*								75		18		*
Asmanex		47		56		-16		42		54		-23		5		2		*
Proventil		37		55		-32		36		53		-32		1		2		-40
Dulera		25				*		25				*

Vaccines
ProQuad, M-M-R II and Varivax		291		340		-14		270		323		-16		21		17		26
Gardasil		277		219		27		198		163		22		79		56		41
RotaTeq		148		139		7		120		118		2		28		21		33
Zostavax		122		18		*		120		18		*		1				*
Pneumovax		64		59		8		47		49		-4		17		11		63

Women’s Health & Endocrine
Fosamax		221		241		-9		15		21		-31		206		220		-6
NuvaRing		154		145		6		90		88		2		64		57		13
Follistim AQ		143		137		4		38		43		-11		104		94		11
Implanon		81		51		60		33		19		78		48		32		50
Cerazette		66		49		34								66		49		34

Other Pharmaceutical ⁽³⁾		948		941		1		174		127		37		776		813		-5

ANIMAL HEALTH		802		731		10		161		153		5		641		578		11

CONSUMER CARE ⁽²⁾		541		544		-1		364		381		-4		177		163		8
Claritin OTC		134		167		-19		93		124		-25		41		43		-3

Other Revenues ⁽⁴⁾		448		433		3		393		305		29		55		129		-57
Astra		306		241		27		306		241		27

⁽¹⁾	Only select products are shown.

⁽²⁾

In the first quarter of 2011, Merck changed the reporting for certain over-the-counter products. Sales of these products outside the United States were previously recorded in the Pharmaceutical business, and are now reported in the Consumer Care business. Prior period amounts have been recast on a comparative basis.

⁽³⁾	Includes Pharmaceutical products not individually shown above. Other Vaccine sales included in Other Pharmaceutical were $67 million and $57 million on a global basis for second quarter 2011 and 2010, respectively.

⁽⁴⁾	Other revenues are primarily comprised of alliance revenue, miscellaneous corporate revenues and third party manufacturing sales.

^*	100% or over

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

JUNE YEAR-TO-DATE 2011

(AMOUNTS IN MILLIONS)

Table 3b


	Global						U.S.						International
	Jun YTD 2011		Jun YTD 2010		% Change		Jun YTD 2011		Jun YTD 2010		% Change		Jun YTD 2011		Jun YTD 2010		% Change
TOTAL SALES ⁽¹⁾	$	23,732	$	22,768		4	$	9,854	$	9,862			$	13,877	$	12,907		8


PHARMACEUTICAL ⁽²⁾		20,179		19,303		5		7,996		8,098		-1		12,184		11,205		9

Cardiovascular
Zetia		1,174		1,098		7		590		588				584		509		15
Vytorin		939		967		-3		462		518		-11		477		449		6
Integrilin		120		140		-14		110		130		-16		10		10		3

Diabetes & Obesity
Januvia		1,518		1,111		37		849		734		16		669		377		78
Janumet		626		419		50		335		261		29		291		158		84

Diversified Brands
Cozaar / Hyzaar		832		1,267		-34		51		354		-86		781		913		-14
Zocor		234		233		—		17		19		-11		217		214		1
Propecia		218		213		3		65		72		-10		154		141		9
Claritin Rx		186		157		19								186		157		19
Remeron		117		110		6		4		3		2		113		106		6
Vasotec / Vaseretic		116		122		-5								116		122		-5
Proscar		113		114		-1		2		3		-25		111		111

Infectious Disease
Isentress		629		499		26		321		241		33		309		258		20
Cancidas		326		303		8		19		29		-37		307		273		12
PegIntron		319		371		-14		27		51		-47		292		320		-9
Primaxin		272		317		-14		52		67		-23		221		249		-11
Invanz		189		158		20		95		81		17		94		77		23
Avelox		167		165		1		152		156		-2		15		9		69
Noxafil		110		99		12		28		27		2		83		72		15
Rebetol		100		111		-10								100		111		-10
Crixivan / Stocrin		95		100		-5		3		4		-32		92		95		-4

Neurosciences & Ophthalmology
Maxalt		304		268		14		214		176		22		90		92		-2
Cosopt / Trusopt		236		238		-1		9		10		-14		227		228

Oncology
Temodar		481		545		-12		198		195		1		283		350		-19
Emend		207		177		17		111		105		5		96		71		34
Intron A		96		105		-9		49		59		-17		47		46		2

Respiratory & Immunology
Singulair		2,682		2,423		11		1,679		1,559		8		1,004		864		16
Remicade		1,595		1,343		19								1,595		1,343		19
Nasonex		696		658		6		305		351		-13		391		307		28
Clarinex		364		355		3		100		109		-9		265		246		7
Arcoxia		214		190		12								214		190		12
Simponi		129		28		*								129		28		*
Asmanex		107		107		-1		96		103		-7		11		4		*
Proventil		80		112		-29		75		109		-30		4		3		27
Dulera		37				*		37				*

Vaccines
ProQuad, M-M-R II and Varivax		535		659		-19		495		619		-20		40		40
Gardasil		490		451		9		349		319		10		141		133		6
RotaTeq		272		231		18		227		191		19		45		40		13
Zostavax		146		114		28		142		114		25		4				*
Pneumovax		143		110		29		107		89		20		36		21		69

Women’s Health & Endocrine
Fosamax		429		472		-9		28		47		-41		401		425		-6
NuvaRing		297		280		6		177		171		3		120		109		10
Follistim AQ		276		270		2		76		84		-9		199		186		7
Implanon		141		101		39		58		38		52		83		63		31
Cerazette		125		104		20								125		104		20

Other Pharmaceutical ⁽³⁾		1,697		1,888		-10		282		310		-9		1,413		1,578		-10

ANIMAL HEALTH		1,560		1,440		8		324		293		11		1,235		1,147		8

CONSUMER CARE ⁽²⁾		1,058		1,032		2		721		718				337		314		7
Claritin OTC		301		303		-1		225		226				76		77		-1

Other Revenues ⁽⁴⁾		935		993		-6		813		753		8		122		240		-49
Astra		628		605		4		628		605		4

⁽¹⁾	Only select products are shown.

⁽²⁾

⁽³⁾	Includes Pharmaceutical products not individually shown above. Other Vaccine sales included in Other Pharmaceutical were $121 million and $113 million on a global basis for June YTD 2011 and 2010, respectively.

⁽⁴⁾	Other revenues are primarily comprised of alliance revenue, miscellaneous corporate revenues and third party manufacturing sales.

^*	100% or over

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

Table 3c


							Jun									Jun												% Change		% Change
	1Q11			2Q11			YTD 11			1Q10			2Q10			YTD 10			3Q10			4Q10			Full Year			2Q		YTD
TOTAL PHARMACEUTICAL	$	9,820		$	10,360		$	20,179		$	9,665		$	9,638		$	19,303		$	9,523		$	10,441		$	39,267			7		5


United States		3,907			4,088			7,996			4,072			4,026			8,098			4,265			4,384			16,748			2		-1
% Pharmaceutical Sales		39.8	%		39.5	%		39.6	%		42.1	%		41.8	%		42.0	%		44.8	%		42.0	%		42.7	%

Europe ⁽¹⁾		2,587			2,827			5,413			2,810			2,631			5,441			2,342			2,677			10,459			7		—
% Pharmaceutical Sales		26.3	%		27.3	%		26.8	%		29.1	%		27.3	%		28.2	%		24.6	%		25.6	%		26.6	%

Japan		1,164			1,104			2,268			811			902			1,712			855			1,077			3,645			23		32
% Pharmaceutical Sales		11.8	%		10.7	%		11.2	%		8.4	%		9.4	%		8.9	%		9.0	%		10.3	%		9.3	%

Latin America		700			743			1,443			659			696			1,355			699			778			2,832			7		6
% Pharmaceutical Sales		7.1	%		7.2	%		7.1	%		6.8	%		7.2	%		7.0	%		7.3	%		7.5	%		7.2	%

Asia Pacific		699			779			1,478			561			622			1,183			618			702			2,503			25		25
% Pharmaceutical Sales		7.1	%		7.5	%		7.3	%		5.8	%		6.5	%		6.1	%		6.5	%		6.7	%		6.4	%

China		187			206			393			133			159			292			145			173			611			30		35

Eastern Europe/Middle East Africa		358			369			727			375			395			771			353			393			1,516			-7		-6
% Pharmaceutical Sales		3.6	%		3.6	%		3.6	%		3.9	%		4.1	%		4.0	%		3.7	%		3.8	%		3.9	%

Canada		360			399			759			337			328			665			374			364			1,403			21		14
% Pharmaceutical Sales		3.7	%		3.9	%		3.8	%		3.5	%		3.4	%		3.4	%		3.9	%		3.5	%		3.6	%

Other		45			51			96			40			37			77			17			67			161			37		24
% Pharmaceutical Sales		0.5	%		0.5	%		0.5	%		0.4	%		0.4	%		0.4	%		0.2	%		0.6	%		0.4	%

(1)	Europe primarily represents all European Union countries and the European Union accession markets.

MERCK & CO., INC.

EQUITY INCOME / JV SALES / OTHER (INCOME) EXPENSE - GAAP

SECOND QUARTER 2011

Table 4

EQUITY INCOME FROM AFFILIATES (millions of dollars)



	2Q11		2Q10		YTD 2011		YTD 2010
ASTRAZENECA LP	$	44	$	40	$	177	$	165
Other ⁽¹⁾		11		3		16		15

TOTAL	$	55	$	43	$	193	$	180

⁽¹⁾	Primarily reflects results for Sanofi Pasteur MSD and Johnson & JohnsonºMerck Consumer Pharmaceuticals.

SANOFI PASTEUR MSD JOINT VENTURE SALES DETAIL (millions of dollars)

All sales reported here are end-market JV sales, presented on a “NET” basis.


	2Q11		2Q10		YTD 2011		YTD 2010
GARDASIL	$	66	$	82	$	124	$	165
OTHER VIRAL VACCINES		29		23		48		46
ROTATEQ		11		14		20		25
HEPATITIS VACCINES		10		6		20		12
FLU VACCINES		—		—		1		10
Other Vaccines		127		112		217		231

TOTAL SANOFI PASTEUR MSD SALES	$	243	$	237	$	430	$	489

OTHER (INCOME) EXPENSE, NET (millions of dollars)


	2Q11			2Q10			YTD 2011			YTD 2010
INTEREST INCOME	$	(51	)	$	(22	)	$	(92	)	$	(34	)
INTEREST EXPENSE		182			185			368			366
EXCHANGE LOSSES (GAINS)		1			(4	)		43			76
Other, net ⁽¹⁾		(11	)		(440	)		425			(521	)

TOTAL	$	121		$	(281	)	$	744		$	(113	)

⁽¹⁾

Other, net in the first six months of 2011 includes a charge of $500 million related to the resolution of the arbitration proceeding with Johnson & Johnson. Other, net in the second quarter and first six months of 2010 includes $443 million of income recognized upon AstraZeneca’s asset option exercise.

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