Attached files
file | filename |
---|---|
EX-99.1 - EX-99.1 - Merck & Co., Inc. | a18-12417_1ex99d1.htm |
8-K - 8-K - Merck & Co., Inc. | a18-12417_18k.htm |
MERCK & CO., INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1a
|
|
2018 |
|
2017 |
|
% Change |
| ||||||||||||||
|
|
1Q |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Sales |
|
$ |
10,037 |
|
$ |
9,434 |
|
$ |
9,930 |
|
$ |
10,325 |
|
$ |
10,433 |
|
$ |
40,122 |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs, Expenses and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Materials and production |
|
3,184 |
|
3,049 |
|
3,116 |
|
3,307 |
|
3,440 |
|
12,912 |
|
4 |
% | ||||||
Marketing and administrative |
|
2,508 |
|
2,472 |
|
2,500 |
|
2,459 |
|
2,643 |
|
10,074 |
|
1 |
% | ||||||
Research and development |
|
3,196 |
|
1,830 |
|
1,782 |
|
4,413 |
|
2,314 |
|
10,339 |
|
75 |
% | ||||||
Restructuring costs |
|
95 |
|
151 |
|
166 |
|
153 |
|
306 |
|
776 |
|
-37 |
% | ||||||
Other (income) expense, net |
|
(291 |
) |
(71 |
) |
(73 |
) |
(207 |
) |
(149 |
) |
(500 |
) |
* |
| ||||||
Income Before Taxes |
|
1,345 |
|
2,003 |
|
2,439 |
|
200 |
|
1,879 |
|
6,521 |
|
-33 |
% | ||||||
Taxes on Income |
|
604 |
|
447 |
|
488 |
|
251 |
|
2,917 |
|
4,103 |
|
|
| ||||||
Net Income (Loss) |
|
741 |
|
1,556 |
|
1,951 |
|
(51 |
) |
(1,038 |
) |
2,418 |
|
-52 |
% | ||||||
Less: Net Income Attributable to Noncontrolling Interests |
|
5 |
|
5 |
|
5 |
|
5 |
|
8 |
|
24 |
|
|
| ||||||
Net Income (Loss) Attributable to Merck & Co., Inc. |
|
$ |
736 |
|
$ |
1,551 |
|
$ |
1,946 |
|
$ |
(56 |
) |
$ |
(1,046 |
) |
$ |
2,394 |
|
-53 |
% |
Earnings (Loss) per Common Share Assuming Dilution (1) |
|
$ |
0.27 |
|
$ |
0.56 |
|
$ |
0.71 |
|
$ |
(0.02 |
) |
$ |
(0.39 |
) |
$ |
0.87 |
|
-52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Average Shares Outstanding Assuming Dilution (1) |
|
2,710 |
|
2,766 |
|
2,752 |
|
2,727 |
|
2,715 |
|
2,748 |
|
|
| ||||||
Tax Rate |
|
44.9 |
% |
22.3 |
% |
20.0 |
% |
125.5 |
% |
155.2 |
% |
62.9 |
% |
|
|
* 100% or greater
Sum of quarterly amounts may not equal year-to-date amounts due to rounding.
On January 1, 2018, the company adopted a new accounting standard related to defined benefit plans that requires the components of net benefit cost/credit (other than service costs) be presented in the statement of income outside of operating expenses. Upon adoption, net periodic benefit cost/credit other than service cost was reclassified to Other (income) expense, net from the previous classifications within Materials and production costs, Marketing and administrative expenses and Research and development costs. Previously reported amounts have been reclassified to conform to the new presentation. There was no impact to net income as a result of adopting the new standard.
(1) Because the company recorded a net loss in the third and fourth quarters of 2017, no potential dilutive common shares were used in the computations of loss per common share assuming dilution as the effects would have been anti-dilutive.
MERCK & CO., INC.
GAAP TO NON-GAAP RECONCILIATION
FIRST QUARTER 2017
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 2b
|
|
GAAP |
|
Acquisition and |
|
Restructuring |
|
Certain Other |
|
Adjustment |
|
Non-GAAP |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Materials and production |
|
$ |
3,049 |
|
855 |
|
63 |
|
|
|
918 |
|
$ |
2,131 |
|
Marketing and administrative |
|
2,472 |
|
20 |
|
1 |
|
|
|
21 |
|
2,451 |
| ||
Research and development |
|
1,830 |
|
11 |
|
|
|
|
|
11 |
|
1,819 |
| ||
Restructuring costs |
|
151 |
|
|
|
151 |
|
|
|
151 |
|
|
| ||
Other (income) expense, net |
|
(71 |
) |
(3 |
) |
|
|
(9 |
) |
(12 |
) |
(59 |
) | ||
Income Before Taxes |
|
2,003 |
|
(883 |
) |
(215 |
) |
9 |
|
(1,089 |
) |
3,092 |
| ||
Income Tax Provision (Benefit) |
|
447 |
|
(158 |
)(3) |
(48 |
)(3) |
3 |
(3) |
(203 |
) |
650 |
| ||
Net Income |
|
1,556 |
|
(725 |
) |
(167 |
) |
6 |
|
(886 |
) |
2,442 |
| ||
Net Income Attributable to Merck & Co., Inc. |
|
1,551 |
|
(725 |
) |
(167 |
) |
6 |
|
(886 |
) |
2,437 |
| ||
Earnings per Common Share Assuming Dilution |
|
$ |
0.56 |
|
(0.26 |
) |
(0.06 |
) |
|
|
(0.32 |
) |
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Tax Rate |
|
22.3 |
% |
|
|
|
|
|
|
|
|
21.0 |
% |
Only the line items that are affected by non-GAAP adjustments are shown.
Merck is providing certain 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 companys results as it permits investors to understand how management assesses performance. Management uses these measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. Senior managements annual compensation is derived in part using non-GAAP income and non-GAAP EPS. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.
(1) Amounts included in materials and production costs primarily reflect $773 million of expenses for the amortization of intangible assets recognized as a result of acquisitions, as well as intangible asset impairment charges of $76 million. Amounts included in marketing and administrative expenses reflect integration, transaction and certain other costs related to business acquisitions and divestitures. Amounts included in research and development expenses primarily reflect changes in the estimated fair value measurement of liabilities for contingent consideration.
(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the companys formal restructuring programs.
(3) Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.
MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES
FIRST QUARTER 2018
(AMOUNTS IN MILLIONS)
Table 3a
|
|
Global |
|
U.S. |
|
International |
| ||||||||||||||||||
|
|
1Q 2018 |
|
1Q 2017 |
|
% Change |
|
1Q 2018 |
|
1Q 2017 |
|
% Change |
|
1Q 2018 |
|
1Q 2017 |
|
% Change |
| ||||||
TOTAL SALES (1) |
|
$ |
10,037 |
|
$ |
9,434 |
|
6 |
|
$ |
4,133 |
|
$ |
4,195 |
|
-1 |
|
$ |
5,904 |
|
$ |
5,239 |
|
13 |
|
PHARMACEUTICAL |
|
8,919 |
|
8,185 |
|
9 |
|
3,716 |
|
3,761 |
|
-1 |
|
5,202 |
|
4,424 |
|
18 |
| ||||||
Oncology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Keytruda |
|
1,464 |
|
584 |
|
151 |
|
838 |
|
361 |
|
132 |
|
626 |
|
223 |
|
181 |
| ||||||
Emend |
|
125 |
|
133 |
|
-5 |
|
79 |
|
86 |
|
-8 |
|
46 |
|
47 |
|
-1 |
| ||||||
Temodar |
|
57 |
|
66 |
|
-13 |
|
1 |
|
1 |
|
23 |
|
56 |
|
65 |
|
-14 |
| ||||||
Alliance Revenue - Lynparza |
|
33 |
|
|
|
|
|
24 |
|
|
|
|
|
9 |
|
|
|
|
| ||||||
Vaccines (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Gardasil / Gardasil 9 |
|
660 |
|
532 |
|
24 |
|
380 |
|
398 |
|
-4 |
|
280 |
|
134 |
|
109 |
| ||||||
ProQuad / M-M-R II / Varivax |
|
392 |
|
355 |
|
10 |
|
312 |
|
298 |
|
5 |
|
80 |
|
57 |
|
41 |
| ||||||
RotaTeq |
|
193 |
|
224 |
|
-14 |
|
151 |
|
178 |
|
-16 |
|
42 |
|
45 |
|
-7 |
| ||||||
Pneumovax 23 |
|
179 |
|
163 |
|
9 |
|
112 |
|
114 |
|
-1 |
|
66 |
|
49 |
|
35 |
| ||||||
Zostavax |
|
65 |
|
154 |
|
-58 |
|
16 |
|
109 |
|
-85 |
|
48 |
|
45 |
|
9 |
| ||||||
Hospital Acute Care |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Bridion |
|
204 |
|
148 |
|
38 |
|
80 |
|
45 |
|
76 |
|
124 |
|
102 |
|
21 |
| ||||||
Noxafil |
|
176 |
|
141 |
|
24 |
|
81 |
|
65 |
|
25 |
|
94 |
|
76 |
|
24 |
| ||||||
Invanz |
|
151 |
|
136 |
|
11 |
|
91 |
|
82 |
|
10 |
|
60 |
|
54 |
|
11 |
| ||||||
Cubicin |
|
98 |
|
96 |
|
2 |
|
47 |
|
54 |
|
-14 |
|
51 |
|
41 |
|
23 |
| ||||||
Cancidas |
|
91 |
|
121 |
|
-25 |
|
3 |
|
5 |
|
-33 |
|
88 |
|
116 |
|
-25 |
| ||||||
Primaxin |
|
72 |
|
62 |
|
15 |
|
5 |
|
|
|
* |
|
67 |
|
62 |
|
8 |
| ||||||
Immunology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Simponi |
|
231 |
|
184 |
|
26 |
|
|
|
|
|
|
|
231 |
|
184 |
|
26 |
| ||||||
Remicade |
|
167 |
|
229 |
|
-27 |
|
|
|
|
|
|
|
167 |
|
229 |
|
-27 |
| ||||||
Neuroscience |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Belsomra |
|
54 |
|
42 |
|
31 |
|
23 |
|
20 |
|
14 |
|
31 |
|
21 |
|
47 |
| ||||||
Virology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Isentress / Isentress HD |
|
281 |
|
305 |
|
-8 |
|
128 |
|
143 |
|
-10 |
|
152 |
|
162 |
|
-6 |
| ||||||
Zepatier |
|
131 |
|
378 |
|
-65 |
|
|
|
200 |
|
-100 |
|
131 |
|
178 |
|
-27 |
| ||||||
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Zetia |
|
305 |
|
334 |
|
-9 |
|
17 |
|
111 |
|
-84 |
|
287 |
|
222 |
|
29 |
| ||||||
Vytorin |
|
167 |
|
241 |
|
-31 |
|
8 |
|
90 |
|
-91 |
|
158 |
|
151 |
|
5 |
| ||||||
Atozet |
|
73 |
|
49 |
|
47 |
|
|
|
|
|
|
|
73 |
|
49 |
|
47 |
| ||||||
Adempas |
|
68 |
|
84 |
|
-19 |
|
|
|
|
|
|
|
68 |
|
84 |
|
-19 |
| ||||||
Diabetes (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Januvia |
|
880 |
|
839 |
|
5 |
|
465 |
|
507 |
|
-8 |
|
416 |
|
332 |
|
25 |
| ||||||
Janumet |
|
544 |
|
496 |
|
10 |
|
192 |
|
195 |
|
-1 |
|
352 |
|
302 |
|
17 |
| ||||||
Womens Health |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NuvaRing |
|
216 |
|
160 |
|
36 |
|
171 |
|
113 |
|
52 |
|
46 |
|
47 |
|
-3 |
| ||||||
Implanon / Nexplanon |
|
174 |
|
170 |
|
2 |
|
128 |
|
132 |
|
-2 |
|
46 |
|
39 |
|
19 |
| ||||||
Diversified Brands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Singulair |
|
175 |
|
186 |
|
-6 |
|
6 |
|
6 |
|
-1 |
|
170 |
|
180 |
|
-6 |
| ||||||
Nasonex |
|
122 |
|
139 |
|
-12 |
|
1 |
|
18 |
|
-92 |
|
121 |
|
121 |
|
|
| ||||||
Cozaar / Hyzaar |
|
120 |
|
112 |
|
7 |
|
7 |
|
3 |
|
132 |
|
113 |
|
109 |
|
4 |
| ||||||
Arcoxia |
|
83 |
|
103 |
|
-20 |
|
|
|
|
|
|
|
83 |
|
103 |
|
-20 |
| ||||||
Follistim AQ |
|
67 |
|
81 |
|
-17 |
|
29 |
|
42 |
|
-30 |
|
39 |
|
40 |
|
-3 |
| ||||||
Dulera |
|
57 |
|
82 |
|
-31 |
|
50 |
|
75 |
|
-34 |
|
7 |
|
7 |
|
3 |
| ||||||
Fosamax |
|
55 |
|
61 |
|
-9 |
|
(2 |
) |
1 |
|
* |
|
57 |
|
60 |
|
-5 |
| ||||||
Other Pharmaceutical (4) |
|
989 |
|
995 |
|
-1 |
|
273 |
|
309 |
|
-12 |
|
717 |
|
688 |
|
4 |
| ||||||
ANIMAL HEALTH |
|
1,065 |
|
939 |
|
13 |
|
307 |
|
283 |
|
9 |
|
758 |
|
656 |
|
16 |
| ||||||
Livestock |
|
652 |
|
578 |
|
13 |
|
124 |
|
119 |
|
4 |
|
529 |
|
459 |
|
15 |
| ||||||
Companion Animals |
|
413 |
|
361 |
|
14 |
|
183 |
|
164 |
|
12 |
|
229 |
|
197 |
|
16 |
| ||||||
Other Revenues (5) |
|
53 |
|
310 |
|
-83 |
|
110 |
|
151 |
|
-27 |
|
(56 |
) |
159 |
|
-135 |
| ||||||
* 200% or greater
(1) Only select products are shown.
(2) Total Vaccines sales were $1,561 million and $1,516 million on a global basis for first quarter 2018 and 2017, respectively.
(3) Total Diabetes sales were $1,433 million and $1,338 million on a global basis for first quarter 2018 and 2017, respectively.
(4) Includes Pharmaceutical products not individually shown above.
(5) Other Revenues are comprised primarily of Healthcare Services segment revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.
MERCK & CO., INC.
PHARMACEUTICAL GEOGRAPHIC SALES
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3b
|
|
2018 |
|
2017 |
|
% Change |
| ||||||||||||||
|
|
1Q |
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
Full Year |
|
1Q |
| ||||||
TOTAL PHARMACEUTICAL |
|
$ |
8,919 |
|
$ |
8,185 |
|
$ |
8,759 |
|
$ |
9,156 |
|
$ |
9,290 |
|
$ |
35,390 |
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
United States |
|
3,716 |
|
3,761 |
|
3,929 |
|
4,197 |
|
3,967 |
|
15,854 |
|
-1 |
| ||||||
% Pharmaceutical Sales |
|
41.7 |
% |
45.9 |
% |
44.9 |
% |
45.8 |
% |
42.7 |
% |
44.8 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Europe (1) |
|
2,402 |
|
1,977 |
|
2,082 |
|
2,174 |
|
2,290 |
|
8,522 |
|
21 |
| ||||||
% Pharmaceutical Sales |
|
26.9 |
% |
24.2 |
% |
23.8 |
% |
23.7 |
% |
24.7 |
% |
24.1 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Japan |
|
718 |
|
688 |
|
818 |
|
756 |
|
780 |
|
3,043 |
|
4 |
| ||||||
% Pharmaceutical Sales |
|
8.1 |
% |
8.4 |
% |
9.3 |
% |
8.3 |
% |
8.4 |
% |
8.6 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Asia Pacific |
|
1,112 |
|
889 |
|
946 |
|
994 |
|
1,054 |
|
3,883 |
|
25 |
| ||||||
% Pharmaceutical Sales |
|
12.5 |
% |
10.9 |
% |
10.8 |
% |
10.9 |
% |
11.3 |
% |
11.0 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
China |
|
459 |
|
328 |
|
353 |
|
377 |
|
439 |
|
1,497 |
|
40 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Latin America |
|
398 |
|
375 |
|
462 |
|
451 |
|
547 |
|
1,836 |
|
6 |
| ||||||
% Pharmaceutical Sales |
|
4.5 |
% |
4.6 |
% |
5.3 |
% |
4.9 |
% |
5.9 |
% |
5.2 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Eastern Europe/Middle East Africa |
|
335 |
|
255 |
|
314 |
|
349 |
|
397 |
|
1,314 |
|
31 |
| ||||||
% Pharmaceutical Sales |
|
3.8 |
% |
3.1 |
% |
3.6 |
% |
3.8 |
% |
4.3 |
% |
3.7 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Canada |
|
196 |
|
182 |
|
171 |
|
193 |
|
193 |
|
739 |
|
8 |
| ||||||
% Pharmaceutical Sales |
|
2.2 |
% |
2.2 |
% |
2.0 |
% |
2.1 |
% |
2.1 |
% |
2.1 |
% |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other |
|
42 |
|
58 |
|
37 |
|
42 |
|
62 |
|
199 |
|
-28 |
| ||||||
% Pharmaceutical Sales |
|
0.5 |
% |
0.7 |
% |
0.4 |
% |
0.5 |
% |
0.7 |
% |
0.6 |
% |
|
| ||||||
(1) Europe primarily represents all European Union countries and the European Union accession markets.
MERCK & CO., INC.
OTHER (INCOME) EXPENSE, NET - GAAP
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 4
OTHER (INCOME) EXPENSE, NET
|
|
1Q18 |
|
1Q17 |
| ||
Interest income |
|
$ |
(85 |
) |
$ |
(97 |
) |
Interest expense |
|
185 |
|
182 |
| ||
Exchange losses (gains) |
|
7 |
|
(8 |
) | ||
Equity losses from affiliates |
|
52 |
|
13 |
| ||
Net periodic defined benefit plan (credit) cost other than service cost |
|
(135 |
) |
(129 |
) | ||
Other, net |
|
(315 |
) |
(32 |
) | ||
Total |
|
$ |
(291 |
) |
$ |
(71 |
) |
On January 1, 2018, the company adopted a new accounting standard related to defined benefit plans that requires the components of net benefit cost/credit (other than service costs) be presented in the statement of income outside of operating expenses. Upon adoption, net periodic benefit cost/credit other than service cost was reclassified to Other (income) expense, net from the previous classifications within Materials and production costs, Marketing and administrative expenses and Research and development costs. Previously reported amounts have been reclassified to conform to the new presentation. There was no impact to net income as a result of adopting the new standard.