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

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - Merck & Co., Inc.	tm2026006d1_ex99-1.htm
8-K - FORM 8-K - Merck & Co., Inc.	tm2026006-1_8k.htm

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

	2020									2019																		% Change
	1Q			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Full Year			2Q			June YTD
Sales	$	12,057		$	10,872		$	22,929		$	10,816		$	11,760		$	22,575		$	12,397		$	11,868		$	46,840			-8	%		2	%

Costs, Expenses and Other
Cost of sales		3,312			3,159			6,471			3,052			3,401			6,453			3,990			3,669			14,112			-7	%		0	%
Selling, general and administrative		2,555			2,378			4,933			2,425			2,712			5,138			2,589			2,888			10,615			-12	%		-4	%
Research and development		2,209			2,123			4,331			1,931			2,189			4,119			3,204			2,548			9,872			-3	%		5	%
Restructuring costs		72			83			155			153			59			212			232			194			638			41	%		-27	%
Other (income) expense, net		71			(390	)		(318	)		188			140			327			35			(223	)		139			*			*
Income Before Taxes		3,838			3,519			7,357			3,067			3,259			6,326			2,347			2,792			11,464			8	%		16	%
Taxes on Income		619			509			1,128			205			615			820			440			428			1,687
Net Income		3,219			3,010			6,229			2,862			2,644			5,506			1,907			2,364			9,777			14	%		13	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests		-			8			8			(53	)		(26	)		(79	)		6			7			(66	)
Net Income Attributable to Merck & Co., Inc.	$	3,219		$	3,002		$	6,221		$	2,915		$	2,670		$	5,585		$	1,901		$	2,357		$	9,843			12	%		11	%
Earnings per Common Share Assuming Dilution	$	1.26		$	1.18		$	2.45		$	1.12		$	1.03		$	2.15		$	0.74		$	0.92		$	3.81			15	%		14	%

Average Shares Outstanding Assuming Dilution		2,547			2,536			2,542			2,603			2,588			2,596			2,572			2,559			2,580
Tax Rate		16.1	%		14.5	%		15.3	%		6.7	%		18.9	%		13.0	%		18.7	%		15.3	%		14.7	%

* 100% or greater

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

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATION

SECOND QUARTER 2019

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c

	GAAP			Acquisition and Divestiture-Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items			Adjustment Subtotal			Non-GAAP
Cost of sales	$	3,401			447			65						512		$	2,889
Selling, general and administrative		2,712			61			32						93			2,619
Research and development		2,189			4			3						7			2,182
Restructuring costs		59						59						59			-
Other (income) expense, net		140			148						48			196			(56	)
Income Before Taxes		3,259			(660	)		(159	)		(48	)		(867	)		4,126
Income Tax Provision (Benefit)		615			(109	)⁽³⁾		(25	)⁽³⁾		(11	)⁽³⁾		(145	)		760
Net Income		2,644			(551	)		(134	)		(37	)		(722	)		3,366
Less: Net (Loss) Income Attributable to Noncontrolling Interests		(26	)		(36	)								(36	)		10
Net Income Attributable to Merck & Co., Inc.		2,670			(515	)		(134	)		(37	)		(686	)		3,356
Earnings per Common Share Assuming Dilution	$	1.03			(0.20	)		(0.05	)		(0.02	)		(0.27	)	$	1.30

Tax Rate		18.9	%														18.4	%

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 company’s 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. In addition, senior management’s annual compensation is derived in part using non-GAAP pretax income. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

⁽¹⁾Amount included in cost of sales primarily reflects $373 million of expenses for the amortization of intangible assets recognized as a result of business acquisitions, as well as $69 million of intangible asset impairment charges. Amount included in selling, general and administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures, including costs related to the acquisition of Antelliq Corporation. Amount included in other (income) expense, net primarily reflects goodwill impairment charges related to certain businesses in the Healthcare Services segment and expenses related to an increase in the estimated fair value of liabilities for contingent consideration related to the termination of the Sanofi-Pasteur MSD joint venture.

⁽²⁾Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's 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.

GAAP TO NON-GAAP RECONCILIATION

SIX MONTHS ENDED JUNE 30, 2019

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2d

	GAAP			Acquisition and Divestiture-Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items			Adjustment Subtotal			Non-GAAP
Cost of sales	$	6,453			860			99						959		$	5,494
Selling, general and administrative		5,138			60			32						92			5,046
Research and development		4,119			(27	)		3						(24	)		4,143
Restructuring costs		212						212						212			-
Other (income) expense, net		327			315						48			363			(36	)
Income Before Taxes		6,326			(1,208	)		(346	)		(48	)		(1,602	)		7,928
Income Tax Provision (Benefit)		820			(207	)⁽³⁾		(56	)⁽³⁾		(304	)⁽⁴⁾		(567	)		1,387
Net Income		5,506			(1,001	)		(290	)		256			(1,035	)		6,541
Less: Net (Loss) Income Attributable to Noncontrolling Interests		(79	)		(89	)								(89	)		10
Net Income Attributable to Merck & Co., Inc.		5,585			(912	)		(290	)		256			(946	)		6,531
Earnings per Common Share Assuming Dilution	$	2.15			(0.36	)		(0.11	)		0.10			(0.37	)	$	2.52

Tax Rate		13.0	%														17.5	%

Only the line items that are affected by non-GAAP adjustments are shown.

⁽¹⁾Amount included in cost of sales primarily reflects $771 million of expenses for the amortization of intangible assets recognized as a result of business acquisitions, as well as $81 million of intangible asset impairment charges. Amount included in selling, general and administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures, including costs related to the acquisition of Antelliq Corporation. Amount included in research and development expenses primarily reflects a reduction in expenses related to a decrease in the estimated fair value measurement of liabilities for contingent consideration. Amount included in other (income) expense, net, primarily reflects goodwill and intangible asset impairment charges related to certain businesses in the Healthcare Services segment and expenses related to an increase in the estimated fair value measurement of liabilities for contingent consideration, partially offset by royalty income related to the termination of the Sanofi-Pasteur MSD joint venture.

⁽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.

⁽⁴⁾Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. Also includes a $360 million net tax benefit related to the settlement of certain federal income tax matters and a $67 million tax charge related to the finalization of treasury regulations associated with the 2017 enactment of U.S. tax legislation.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SECOND QUARTER 2020

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global						U.S.								International
	2Q 2020		2Q 2019		% Change		2Q 2020			2Q 2019			% Change		2Q 2020		2Q 2019		% Change
TOTAL SALES ⁽¹⁾	$	10,872	$	11,760		-8	$	4,634		$	5,193			-11	$	6,238	$	6,567		-5
PHARMACEUTICAL		9,679		10,460		-7		4,270			4,807			-11		5,409		5,653		-4
Oncology
Keytruda		3,388		2,634		29		2,043			1,498			36		1,345		1,136		18
Alliance Revenue - Lynparza ⁽²⁾		178		111		61		105			66			60		73		45		61
Alliance Revenue - Lenvima ⁽²⁾		151		97		57		98			54			83		53		43		23
Emend		33		121		-72		6			67			-91		27		54		-49
Vaccines ⁽³⁾
Gardasil / Gardasil 9		656		886		-26		168			456			-63		488		430		13
ProQuad / M-M-R II / Varivax		378		675		-44		263			500			-47		115		174		-34
RotaTeq		168		172		-2		100			104			-3		68		68
Pneumovax 23		117		170		-31		21			123			-83		96		47		103
Vaqta		28		58		-52		17			38			-56		11		20		-45
Hospital Acute Care
Bridion		224		278		-19		107			129			-17		117		149		-21
Noxafil		73		193		-62		6			100			-94		67		93		-27
Primaxin		64		71		-10		1						81		63		70		-10
Prevymis		63		38		66		28			19			46		35		18		89
Cancidas		43		67		-36		(2	)		3			-164		45		64		-30
Invanz		43		78		-45					18			-99		43		60		-29
Zerbaxa		32		27		19		17			13			30		15		14		10
Cubicin		32		67		-53		10			22			-53		21		45		-52
Immunology
Simponi		191		214		-11										191		214		-11
Remicade		73		98		-26										73		98		-26
Neuroscience
Belsomra		84		76		10		22			21			4		61		55		12
Virology
Isentress / Isentress HD		196		247		-21		76			94			-19		120		153		-21
Zepatier		39		108		-63		15			39			-62		24		68		-64
Cardiovascular
Zetia		137		156		-12		(1	)		6			-123		138		150		-8
Vytorin		39		76		-49		2			3			-42		37		73		-50
Atozet		115		92		25										115		92		25
Alliance Revenue - Adempas ⁽⁴⁾		79		51		54		73			49			50		6		2		141
Adempas ⁽⁵⁾		57		53		8										57		53		8
Diabetes ⁽⁶⁾
Januvia		854		908		-6		413			471			-12		441		437		1
Janumet		490		533		-8		143			166			-14		348		366		-5
Women's Health
Implanon / Nexplanon		132		183		-28		87			136			-36		44		48		-7
NuvaRing		63		240		-74		35			206			-83		28		34		-18
Diversified Brands
Singulair		100		160		-38		4			8			-45		96		153		-37
Cozaar / Hyzaar		98		109		-10		4			6			-29		94		103		-9
Arcoxia		65		75		-13										65		75		-13
Nasonex		49		72		-32		4			(1	)		*		45		73		-38
Follistim AQ		44		63		-31		20			24			-18		24		39		-39
Other Pharmaceutical ⁽⁷⁾		1,103		1,203		-8		385			369			4		720		837		-14

ANIMAL HEALTH		1,101		1,124		-2		342			335			2		759		789		-4
Livestock		648		671		-3		122			145			-15		526		526
Companion Animals		453		453				220			190			16		233		263		-11

Other Revenues ⁽⁸⁾		92		176		-47		22			51			-57		70		125		-44

* 200% or greater

⁽¹⁾ Only select products are shown.

⁽²⁾ Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.

⁽³⁾ Total Vaccines sales were $1,418 million and $2,037 million on a global basis for second quarter 2020 and 2019, respectively.

⁽⁴⁾ Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

⁽⁵⁾ Net product sales in Merck's marketing territories.

⁽⁶⁾ Total Diabetes sales were $1,418 million and $1,480 million on a global basis for second quarter 2020 and 2019, respectively.

⁽⁷⁾ Includes Pharmaceutical products not individually shown above.

⁽⁸⁾ 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.

FRANCHISE / KEY PRODUCT SALES

JUNE YEAR-TO-DATE 2020

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	Global						U.S.								International
	June YTD 2020		June YTD 2019		% Change		June YTD 2020			June YTD 2019			% Change		June YTD 2020		June YTD 2019		% Change
TOTAL SALES ⁽¹⁾	$	22,929	$	22,575		2	$	9,771		$	9,748				$	13,158	$	12,828		3
PHARMACEUTICAL		20,334		20,123		1		8,984			9,022					11,350		11,101		2
Oncology
Keytruda		6,672		4,903		36		3,949			2,782			42		2,722		2,121		28
Alliance Revenue - Lynparza ⁽²⁾		323		190		70		190			116			64		133		74		81
Alliance Revenue - Lenvima ⁽²⁾		279		171		63		188			104			81		91		67		36
Emend		76		237		-68		11			130			-92		65		107		-39
Vaccines ⁽³⁾
Gardasil / Gardasil 9		1,753		1,724		2		629			818			-23		1,124		906		24
ProQuad / M-M-R II / Varivax		813		1,171		-31		596			843			-29		217		328		-34
RotaTeq		391		383		2		241			258			-7		150		125		20
Pneumovax 23		373		355		5		203			248			-18		170		107		60
Vaqta		88		105		-17		47			67			-30		41		39		7
Hospital Acute Care
Bridion		524		533		-2		250			248			1		274		285		-4
Noxafil		168		383		-56		14			191			-93		154		192		-20
Prevymis		123		70		76		55			37			47		68		33		109
Primaxin		115		130		-11		1			1			81		114		129		-12
Invanz		108		150		-28		6			31			-81		102		118		-14
Cancidas		98		129		-23		1			4			-80		98		125		-22
Cubicin		78		155		-50		25			64			-61		53		91		-42
Zerbaxa		69		53		30		37			25			46		32		28		15
Immunology
Simponi		406		422		-4										406		422		-4
Remicade		160		221		-28										160		221		-28
Neuroscience
Belsomra		163		143		14		49			45			9		114		98		16
Virology
Isentress / Isentress HD		441		502		-12		151			202			-25		290		300		-3
Zepatier		94		221		-57		33			72			-55		62		149		-59
Cardiovascular
Zetia		282		296		-5		(4	)		6			-161		285		290		-1
Vytorin		92		174		-47		5			6			-14		86		167		-48
Atozet		238		186		28										238		186		28
Alliance Revenue - Adempas ⁽⁴⁾		133		94		41		122			89			37		11		5		132
Adempas ⁽⁵⁾		113		100		12										113		100		12
Diabetes ⁽⁶⁾
Januvia		1,628		1,732		-6		768			855			-10		860		877		-2
Janumet		993		1,063		-7		256			333			-23		737		730		1
Women's Health
Implanon / Nexplanon		326		382		-15		237			285			-17		90		98		-8
NuvaRing		126		459		-73		61			391			-84		65		68		-5
Diversified Brands
Singulair		255		352		-27		9			13			-31		246		338		-27
Cozaar / Hyzaar		200		213		-6		12			10			13		189		202		-7
Arcoxia		135		149		-9										135		149		-9
Nasonex		120		168		-29		10			(2	)		*		110		170		-35
Follistim AQ		85		121		-29		40			53			-25		45		67		-33
Other Pharmaceutical ⁽⁷⁾		2,293		2,283				792			697			14		1,500		1,589		-6

ANIMAL HEALTH		2,314		2,149		8		726			628			16		1,588		1,521		4
Livestock		1,386		1,282		8		284			261			9		1,102		1,021		8
Companion Animals		928		867		7		442			367			20		486		500		-3

Other Revenues ⁽⁸⁾		281		303		-8		61			98			-38		220		206		7

* 200% or greater

⁽¹⁾Only select products are shown.

⁽²⁾Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.

⁽³⁾Total Vaccines sales were $3,574 million and $3,924 million on a global basis for June YTD 2020 and 2019, respectively.

⁽⁴⁾Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

⁽⁵⁾Net product sales in Merck's marketing territories.

⁽⁶⁾Total Diabetes sales were $2,772 million and $2,882 million on a global basis for June YTD 2020 and 2019, respectively.

⁽⁷⁾Includes Pharmaceutical products not individually shown above.

⁽⁸⁾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 3c

	2020									2019																		% Change
	1Q			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Full Year			2Q
TOTAL PHARMACEUTICAL	$	10,655		$	9,679		$	20,334		$	9,663		$	10,460		$	20,123		$	11,095		$	10,533		$	41,751			-7

United States ⁽¹⁾		4,714			4,270			8,984			4,215			4,807			9,022			5,180			4,751			18,953			-11
% Pharmaceutical Sales		44.2	%		44.1	%		44.2	%		43.6	%		46.0	%		44.8	%		46.7	%		45.1	%		45.4	%
Europe ⁽²⁾		2,543			2,196			4,739			2,335			2,301			4,636			2,304			2,373			9,314			-5
% Pharmaceutical Sales		23.9	%		22.7	%		23.3	%		24.2	%		22.0	%		23.0	%		20.8	%		22.5	%		22.3	%
China		846			811			1,657			725			745			1,470			898			773			3,141			9
% Pharmaceutical Sales		7.9	%		8.4	%		8.1	%		7.5	%		7.1	%		7.3	%		8.1	%		7.3	%		7.5	%
Japan		789			847			1,636			779			900			1,679			894			921			3,494			-6
% Pharmaceutical Sales		7.4	%		8.8	%		8.0	%		8.1	%		8.6	%		8.3	%		8.1	%		8.7	%		8.4	%
Asia Pacific (other than China and Japan)		613			555			1,168			642			606			1,248			638			614			2,500			-9
% Pharmaceutical Sales		5.8	%		5.7	%		5.7	%		6.6	%		5.8	%		6.2	%		5.8	%		5.8	%		6.0	%
Eastern Europe/Middle East/Africa		490			416			905			343			388			731			423			423			1,577			7
% Pharmaceutical Sales		4.6	%		4.3	%		4.5	%		3.6	%		3.7	%		3.6	%		3.8	%		4.0	%		3.8	%
Latin America		419			399			818			427			523			950			534			429			1,914			-24
% Pharmaceutical Sales		3.9	%		4.1	%		4.0	%		4.4	%		5.0	%		4.7	%		4.8	%		4.1	%		4.6	%
Canada		212			160			372			177			179			356			211			216			783			-11
% Pharmaceutical Sales		2.0	%		1.7	%		1.8	%		1.8	%		1.7	%		1.8	%		1.9	%		2.0	%		1.9	%
Other ⁽¹⁾		29			25			55			20			11			31			13			33			75			127
% Pharmaceutical Sales		0.3	%		0.3	%		0.3	%		0.2	%		0.1	%		0.2	%		0.1	%		0.3	%		0.2	%

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

⁽¹⁾Alliance revenue related to Adempas attributable to the United States has been reclassified from Other.

⁽²⁾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		2Q20		2Q19				June YTD 2020			June YTD 2019
Interest income	$	(14	)	$	(75	)	$	(39	)	$	(164	)
Interest expense		209			233			421			442
Exchange losses		24			27			78			128
Income from investments in equity securities, net ⁽¹⁾		(551	)		(58	)		(603	)		(32	)
Net periodic defined benefit plan (credit) cost other than service cost		(80	)		(140	)		(170	)		(281	)
Other, net		22			153			(5	)		234
Total	$	(390	)	$	140		$	(318	)	$	327

⁽¹⁾ Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while ownership interests in investment funds are accounted for on a one quarter lag.

Merck & Co., Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - July 31, 2020

Attached files

Merck & Co., Inc. Reports