Merck & Co., Inc. - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - 8-K - Merck & Co., Inc.	a13-22871_18k.htm
EX-99.1 - EX-99.1 - Merck & Co., Inc.	a13-22871_1ex99d1.htm

Exhibit 99.2

MERCK & CO., INC.
CONSOLIDATED STATEMENT OF OPERATIONS - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1a

	2013												2012																		% Change
	1Q			2Q			3Q			YTD			1Q			2Q			3Q			YTD			4Q			Full Year			3Q		YTD

Sales	$	10,671		$	11,010		$	11,032		$	32,713		$	11,731		$	12,311		$	11,488		$	35,530		$	11,738		$	47,267		-4	%	-8	%

Costs, Expenses and Other
Materials and production	3,959			4,284			4,104			12,347			4,037			4,112			4,137			12,286			4,160			16,446			-1	%	—
Marketing and administrative	2,987			3,140			2,803			8,929			3,074			3,249			3,063			9,386			3,390			12,776			-8	%	-5	%
Research and development	1,907			2,101			1,660			5,668			1,862			2,165			1,918			5,944			2,224			8,168			-13	%	-5	%
Restructuring costs	119			155			870			1,144			219			144			110			473			191			664			*		*
Equity income from affiliates	(133		)	(116		)	(102		)	(351		)	(110		)	(142		)	(158		)	(410		)	(231		)	(642		)	-35	%	-14	%
Other (income) expense, net	282			201			172			656			142			103			200			446			669			1,116			-14	%	47	%

Income Before Taxes	1,550			1,245			1,525			4,320			2,507			2,680			2,218			7,405			1,335			8,739			-31	%	-42	%
Income Tax (Benefit) Provision	(66		)	310			375			618			740			860			455			2,055			385			2,440
Net Income	1,616			935			1,150			3,702			1,767			1,820			1,763			5,350			950			6,299			-35	%	-31	%
Less: Net Income Attributable to Noncontrolling Interests	23			29			26			79			29			27			34			89			42			131
Net Income Attributable to Merck & Co., Inc.	$	1,593		$	906		$	1,124		$	3,623		$	1,738		$	1,793		$	1,729		$	5,261		$	908		$	6,168		-35	%	-31	%

Earnings per Common Share Assuming Dilution	$	0.52		$	0.30		$	0.38		$	1.20		$	0.56		$	0.58		$	0.56		$	1.71		$	0.30		$	2.00		-32	%	-30	%

Average Shares Outstanding Assuming Dilution	3,053			3,010			2,960			3,007			3,074			3,072			3,079			3,077			3,074			3,076

Tax Rate	-4.3		%	24.9		%	24.6		%	14.3		%	29.5		%	32.1		%	20.5		%	27.8		%	28.8		%	27.9		%

* 100% or greater

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

THIRD QUARTER 2012

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c

				Acquisition-		Restructuring		Adjustment
	GAAP			Related Costs (1)		Costs (2)		Subtotal			Non-GAAP
Sales	$	11,488									$	11,488
Costs, Expenses and Other
Materials and production	4,137			1,232		60		1,292			2,845
Marketing and administrative	3,063			68		25		93			2,970
Research and development	1,918			40		(32	)	8			1,910
Restructuring costs	110					110		110			—
Equity income from affiliates	(158		)					—			(158		)
Other (income) expense, net	200							—			200
Income Before Taxes	2,218			(1,340	)	(163	)	(1,503		)	3,721
Taxes on Income	455							(300		)(3)	755
Net Income	1,763							(1,203		)	2,966
Less: Net Income Attributable to Noncontrolling Interests	34							—			34
Net Income Attributable to Merck & Co., Inc.	$	1,729						$	(1,203	)	$	2,932
Earnings per Common Share Assuming Dilution	$	0.56									$	0.95
Average Shares Outstanding Assuming Dilution	3,079										3,079
Tax Rate	20.5		%								20.3		%

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 recognized as a result of mergers and acquisitions. Amounts included in marketing and administrative expenses reflect merger integration costs. Amounts included in research and development expenses represent in-process research and development (“IPR&D”) impairment charges.

(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to actions under the company’s formal restructuring programs. In the third quarter of 2012, the company recorded an adjustment to accelerated depreciation costs included in research and development expenses revising previously recorded amounts for certain facilities.

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

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

NINE MONTHS ENDED SEPTEMBER 30, 2012

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2d

	GAAP			Acquisition- Related Costs (1)		Restructuring Costs (2)		Adjustment Subtotal			Non-GAAP
Sales	$	35,530									$	35,530
Costs, Expenses and Other
Materials and production	12,286			3,687		148		3,835			8,451
Marketing and administrative	9,386			183		70		253			9,133
Research and development	5,944			176		54		230			5,714
Restructuring costs	473					473		473			—
Equity income from affiliates	(410		)					—			(410		)
Other (income) expense, net	446							—			446
Income Before Taxes	7,405			(4,046	)	(745	)	(4,791		)	12,196
Taxes on Income	2,055							(848		)(3)	2,903
Net Income	5,350							(3,943		)	9,293
Less: Net Income Attributable to Noncontrolling Interests	89							—			89
Net Income Attributable to Merck & Co., Inc.	$	5,261						$	(3,943	)	$	9,204
Earnings per Common Share Assuming Dilution	$	1.71									$	2.99
Average Shares Outstanding Assuming Dilution	3,077										3,077
Tax Rate	27.8		%								23.8		%

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

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

THIRD QUARTER 2013

(AMOUNTS IN MILLIONS)

Table 3a

	Global					U.S.					International
	3Q13		3Q12		% Change	3Q13		3Q12		% Change	3Q13		3Q12		% Change

TOTAL SALES (1)	$	11,032	$	11,488	-4	$	4,905	$	5,112	-4	$	6,127	$	6,377	-4

PHARMACEUTICAL	9,475		9,875		-4	4,148		4,304		-4	5,327		5,571		-4

Primary Care and Women’s Health
Cardiovascular
Zetia	662		645		3	369		348		6	293		297		-1
Vytorin	396		423		-6	165		193		-15	232		229		1

Diabetes & Obesity
Januvia	927		975		-5	484		546		-11	444		429		3
Janumet	442		405		9	218		216		1	225		189		19

Respiratory
Nasonex	297		292		2	179		156		15	118		136		-13
Singulair	280		602		-53	29		249		-88	252		353		-29
Dulera	82		52		58	78		50		57	4		2		91
Asmanex	43		42		2	39		38		1	4		4		17

Women’s Health & Endocrine
NuvaRing	170		156		9	106		93		14	64		64		1
Fosamax	140		152		-8	7		6		7	133		146		-9
Follistim AQ	124		111		12	55		39		42	69		72		-5
Implanon	96		93		3	50		34		47	46		59		-22
Cerazette	51		64		-21						51		64		-21

Other
Arcoxia	112		109		2						112		109		2
Avelox	38		30		27	34		27		25	3		2		52

Hospital and Specialty
Immunology
Remicade	574		490		17						574		490		17
Simponi	126		86		46						126		86		46

Infectious Disease
Isentress	427		399		7	227		219		4	199		180		11
Cancidas	151		163		-7	7		8		-10	144		155		-7
PegIntron	104		165		-37	9		22		-61	95		143		-33
Invanz	130		118		10	70		60		17	59		58		3
Victrelis	121		149		-19	45		79		-43	75		70		8
Noxafil	75		66		15	23		19		24	52		47		11

Oncology
Temodar	162		227		-28	71		111		-35	91		116		-22
Emend	123		111		11	73		67		9	49		44		13

Other
Cosopt / Trusopt	104		102		3	5		3		58	100		99		1
Bridion	75		68		10						75		68		10
Integrilin	45		48		-6	41		44		-7	4		4		10

Diversified Brands
Cozaar / Hyzaar	238		295		-19	11		3		*	227		292		-22
Primaxin	88		109		-19	8		6		28	80		103		-22
Zocor	65		86		-24	6		7		-11	59		79		-25
Propecia	71		104		-32	7		30		-78	64		74		-13
Clarinex	54		64		-15	6		17		-63	48		46		3
Claritin Rx	36		47		-23						36		47		-23
Remeron	44		52		-15	1		1		31	43		51		-16
Proscar	38		55		-30	1		1		-2	37		54		-31
Maxalt	40		166		-76	14		136		-90	27		31		-13

Vaccines
Gardasil	665		581		15	548		412		33	117		169		-30
ProQuad, M-M-R II and Varivax	421		396		6	386		366		5	35		29		19
RotaTeq	201		150		34	154		108		43	47		41		12
Zostavax	185		202		-8	169		191		-12	16		10		51
Pneumovax 23	193		160		21	149		139		7	44		21		*

Other Pharmaceutical (2)	1,059		1,065		-1	304		258		18	754		809		-7

ANIMAL HEALTH	800		815		-2	208		211		-1	591		604		-2

CONSUMER CARE	443		451		-2	282		290		-3	160		161		-1
Claritin OTC	123		118		5	90		81		11	33		37		-10

Other Revenues (3)	314		347		-9	266		306		-13	48		41		17
Astra	220		255		-14	220		255		-14

* 100% or greater

(1) Only select products are shown.

(2) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $127 million and $116 million on a global basis for third quarter 2013 and 2012, respectively.

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

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SEPTEMBER YEAR-TO-DATE 2013

(AMOUNTS IN MILLIONS)

Table 3b

	Global					U.S.					International
	Sep YTD 13		Sep YTD 12		% Change	Sep YTD 13		Sep YTD 12		% Change	Sep YTD 13		Sep YTD 12		% Change

TOTAL SALES (1)	$	32,713	$	35,530	-8	$	13,727	$	15,676	-12	$	18,987	$	19,853	-4

PHARMACEUTICAL	27,677		30,517		-9	11,093		13,127		-15	16,584		17,390		-5

Primary Care and Women’s Health
Cardiovascular
Zetia	1,941		1,891		3	1,054		987		7	887		904		-2
Vytorin	1,207		1,312		-8	491		578		-15	716		734		-2

Diabetes & Obesity
Januvia	2,883		2,952		-2	1,517		1,571		-3	1,366		1,382		-1
Janumet	1,325		1,207		10	650		628		4	675		580		17

Respiratory
Nasonex	1,008		960		5	506		459		10	501		501
Singulair	898		3,373		-73	45		2,127		-98	853		1,245		-32
Dulera	229		140		63	218		135		62	11		6		91
Asmanex	133		141		-6	117		128		-8	16		13		17

Women’s Health & Endocrine
NuvaRing	492		459		7	303		268		13	190		191		-1
Fosamax	421		522		-19	16		22		-28	405		500		-19
Follistim AQ	380		352		8	158		124		28	222		228		-3
Implanon	282		254		11	144		104		38	139		150		-8
Cerazette	159		202		-22						159		202		-22

Other
Arcoxia	354		338		5						354		338		5
Avelox	102		146		-30	95		140		-32	8		7		17

Hospital and Specialty
Immunology
Remicade	1,651		1,527		8						1,651		1,527		8
Simponi	354		236		50						354		236		50

Infectious Disease
Isentress	1,201		1,133		6	633		608		4	569		525		8
Cancidas	477		474		1	22		23		-2	455		451		1
PegIntron	372		510		-27	31		79		-60	341		431		-21
Invanz	360		329		9	185		166		12	175		163		7
Victrelis	347		387		-10	134		215		-38	213		172		24
Noxafil	212		191		11	63		54		16	149		136		9

Oncology
Temodar	596		688		-13	287		322		-11	310		366		-15
Emend	373		358		4	213		202		5	160		156		3

Other
Cosopt / Trusopt	313		331		-5	13		10		33	299		321		-7
Bridion	206		186		11						206		186		11
Integrilin	140		160		-13	128		147		-13	12		13		-7

Diversified Brands
Cozaar / Hyzaar	760		969		-22	26		16		62	734		953		-23
Primaxin	256		301		-15	15		17		-12	241		284		-15
Zocor	221		285		-22	18		20		-11	204		265		-23
Propecia	206		312		-34	18		95		-81	188		218		-14
Clarinex	180		337		-47	14		122		-89	166		215		-23
Claritin Rx	151		181		-16						151		181		-16
Remeron	150		175		-14	4		4		-2	146		171		-15
Proscar	136		160		-15	3		3		13	133		157		-16
Maxalt	124		476		-74	37		363		-90	87		113		-23

Vaccines
Gardasil	1,438		1,189		21	1,047		809		29	390		379		3
ProQuad, M-M-R II and Varivax	1,032		967		7	933		880		6	99		87		14
RotaTeq	507		433		17	382		317		20	125		116		8
Zostavax	494		426		16	443		396		12	51		30		68
Pneumovax 23	412		372		11	315		297		6	97		76		28

Other Pharmaceutical (2)	3,194		3,175		1	815		691		18	2,376		2,484		-4

ANIMAL HEALTH	2,491		2,501		—	658		643		2	1,833		1,859		-1

CONSUMER CARE (3)	1,504		1,557		-3	1,073		1,056		2	431		501		-14
Claritin OTC	379		432		-12	343		318		8	36		114		-69

Other Revenues (4)	1,041		955		9	902		851		6	139		104		34
Astra	727		664		10	727		664		10

* 100% or greater

(1) Only select products are shown.

(2) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $267 million and $251 million on a global basis for September year-to-date 2013 and 2012, respectively.

(3) The decrease in Consumer Care sales in the September year-to-date period resulted from the ongoing termination in China of distribution arrangements and a reversal of sales previously made to those distributors, together with associated termination costs.

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

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

	1Q13			2Q13			3Q13			Sep YTD			1Q12			2Q12			3Q12			Sep YTD			4Q12			Full Year			% Change 3Q	% Change Sep YTD

TOTAL PHARMACEUTICAL	$	8,891		$	9,310		$	9,475		$	27,677		$	10,082		$	10,560		$	9,875		$	30,517		$	10,085		$	40,601		-4	-9

United States	3,256			3,689			4,148			11,093			4,189			4,633			4,304			13,127			3,915			17,041			-4	-15
% Pharmaceutical Sales	36.6		%	39.6		%	43.8		%	40.1		%	41.6		%	43.9		%	43.6		%	43.0		%	38.8		%	42.0		%

Europe (1)	2,465			2,343			2,276			7,084			2,558			2,540			2,210			7,309			2,441			9,750			3	-3
% Pharmaceutical Sales	27.7		%	25.2		%	24.0		%	25.6		%	25.4		%	24.1		%	22.4		%	24.0		%	24.2		%	24.0		%

Japan	1,034			948			893			2,875			1,267			1,199			1,124			3,590			1,388			4,978			-21	-20
% Pharmaceutical Sales	11.6		%	10.2		%	9.4		%	10.4		%	12.6		%	11.4		%	11.4		%	11.8		%	13.8		%	12.3		%

Latin America	596			676			628			1,899			627			668			715			2,010			742			2,752			-12	-5
% Pharmaceutical Sales	6.7		%	7.3		%	6.6		%	6.9		%	6.2		%	6.3		%	7.2		%	6.6		%	7.4		%	6.8		%

Asia Pacific	822			874			799			2,495			762			787			846			2,394			864			3,259			-6	4
% Pharmaceutical Sales	9.2		%	9.4		%	8.4		%	9.0		%	7.6		%	7.4		%	8.6		%	7.8		%	8.6		%	8.0		%

China	271			297			242			810			221			262			262			746			298			1,044			-8	9

Eastern Europe/Middle East Africa	439			479			431			1,349			361			441			366			1,168			416			1,584			18	15
% Pharmaceutical Sales	4.9		%	5.1		%	4.5		%	4.9		%	3.6		%	4.2		%	3.7		%	3.8		%	4.1		%	3.9		%

Canada	245			257			253			755			264			236			257			758			276			1,034			-2	0
% Pharmaceutical Sales	2.8		%	2.8		%	2.7		%	2.7		%	2.6		%	2.2		%	2.6		%	2.5		%	2.7		%	2.5		%

Other	34			45			47			127			53			56			52			161			42			203			-9	-21
% Pharmaceutical Sales	0.4		%	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.4		%	0.5		%

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

MERCK & CO., INC.

THIRD QUARTER 2013

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

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

EQUITY INCOME FROM AFFILIATES

	3Q13		3Q12		YTD 2013		YTD 2012
ASTRAZENECA LP	$	72	$	134	$	302	$	387
Other (1)	30		24		49		23
TOTAL	$	102	$	158	$	351	$	410

(1) Includes results for Sanofi Pasteur MSD.

SANOFI PASTEUR MSD JOINT VENTURE SALES DETAIL

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

	3Q13		3Q12		YTD 2013		YTD 2012
GARDASIL	$	87	$	82	$	221	$	197
FLU VACCINES	93		82		93		82
OTHER VIRAL VACCINES	23		26		79		81
ZOSTAVAX	41		—		41		—
ROTATEQ	14		12		41		35
HEPATITIS VACCINES	8		7		23		24
Other Vaccines	126		127		331		352
TOTAL SANOFI PASTEUR MSD SALES	$	392	$	336	$	829	$	771

OTHER (INCOME) EXPENSE, NET

	3Q13			3Q12			YTD 2013			YTD 2012
INTEREST INCOME	$	(67	)	$	(47	)	$	(189	)	$	(177	)
INTEREST EXPENSE	215			178			600			524
EXCHANGE LOSSES	11			50			278			130
Other, net	13			19			(33		)	(31		)
TOTAL	$	172		$	200		$	656		$	446

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Merck & Co., Inc. Reports

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