EX-99.2 3 tm222755d1_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

	2021															2020															% Change
	1Q			2Q			3Q			4Q			Full Year			1Q			2Q			3Q			4Q			Full Year			4Q			Full Year
Sales	$	10,627		$	11,402		$	13,154		$	13,521		$	48,704		$	10,288		$	9,353		$	10,929		$	10,948		$	41,518			24	%		17	%

Costs, Expenses and Other
Cost of sales		3,199			3,104			3,450			3,873			13,626			2,829			2,747			3,013			5,029			13,618			-23	%		0	%
Selling, general and administrative		2,187			2,281			2,336			2,830			9,634			2,191			2,085			2,060			2,619			8,955			8	%		8	%
Research and development		2,412			4,321			2,445			3,068			12,245			2,175			2,085			3,349			5,788			13,397			-47	%		-9	%
Restructuring costs		297			82			107			174			661			70			82			113			310			575			-44	%		15	%
Other (income) expense, net		(455	)		(103	)		(450	)		(333	)		(1,341	)		62			(387	)		(312	)		(253	)		(890	)		32	%		51	%
Income (Loss) from Continuing Operations Before Taxes		2,987			1,717			5,266			3,909			13,879			2,961			2,741			2,706			(2,545	)		5,863			*			*
Income Tax Provision		238			503			695			85			1,521			495			396			380			69			1,340
Net Income (Loss) from Continuing Operations		2,749			1,214			4,571			3,824			12,358			2,466			2,345			2,326			(2,614	)		4,523			*			*
Less: Net Income (Loss) Attributable to Noncontrolling Interests		4			1			4			4			13			(5	)		4			2			3			4
Net Income (Loss) from Continuing Operations Attributable to Merck & Co., Inc.		2,745			1,213			4,567			3,820			12,345			2,471			2,341			2,324			(2,617	)		4,519			*			*
Income (Loss) from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests		434			332			-			(62	)		704			748			661			617			523			2,548			*			-72	%
Net Income (Loss) Attributable to Merck & Co., Inc.	$	3,179		$	1,545		$	4,567		$	3,758		$	13,049		$	3,219		$	3,002		$	2,941		$	(2,094	)	$	7,067			*			85	%

Basic Earnings (Loss) per Common Share Attributable to Merck & Co., Inc. Common Shareholders:
Income (Loss) from Continuing Operations	$	1.08		$	0.48		$	1.81		$	1.51		$	4.88		$	0.98		$	0.93		$	0.92		$	(1.03	)	$	1.79			*			*
Income (Loss) from Discontinued Operations		0.17			0.13			-			(0.02	)		0.28			0.30			0.26			0.24			0.21			1.01			*			-72	%
Net Income (Loss)	$	1.26		$	0.61		$	1.81		$	1.49		$	5.16		$	1.27		$	1.19		$	1.16		$	(0.83	)	$	2.79			*			85	%

Earnings (Loss) per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:
Income (Loss) from Continuing Operations	$	1.08		$	0.48		$	1.80		$	1.51		$	4.86		$	0.97		$	0.92		$	0.92		$	(1.03	)	$	1.78			*			*
Income (Loss) from Discontinued Operations		0.17			0.13			-			(0.02	)		0.28			0.29			0.26			0.24			0.21			1.00			*			-72	%
Net Income (Loss)	$	1.25		$	0.61		$	1.80		$	1.48		$	5.14		$	1.26		$	1.18		$	1.16		$	(0.83	)	$	2.78			*			85	%

Average Shares Outstanding		2,531			2,533			2,530			2,527			2,530			2,533			2,527			2,529			2,530			2,530
Average Shares Outstanding Assuming Dilution ⁽¹⁾		2,541			2,540			2,536			2,535			2,538			2,547			2,536			2,538			2,530			2,541
Tax Rate from Continuing Operations		8.0	%		29.3	%		13.2	%		2.2	%		11.0	%		16.7	%		14.4	%		14.0	%		-2.7	%		22.9	%

* 100% or greater

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

⁽¹⁾Because the company recorded a net loss in the fourth quarter of 2020, no potential dilutive common shares were used in the computation of loss per common share assuming dilution as the effect would have been anti-dilutive. Income from discontinued operations was also computed using average common shares outstanding.

MERCK & CO., INC.

FOURTH QUARTER AND FULL YEAR 2020 GAAP TO NON-GAAP RECONCILIATION - CONTINUING OPERATIONS

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

The table below reflects a reconciliation of GAAP to non-GAAP financial information on a continuing operations basis. As Organon results are reflected within discontinued operations, they are excluded from the financial information provided below.

	GAAP			Acquisition and Divestiture- Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			(Income) Loss from Investments in Equity Securities			Certain Other Items			Adjustment Subtotal			Non-GAAP
Fourth Quarter
Cost of sales	$	5,029			1,986			44						260	⁽⁵⁾		2,290		$	2,739
Selling, general and administrative		2,619			42			10									52			2,567
Research and development		5,788			16			16						3,161	⁽³⁾		3,193			2,595
Restructuring costs		310						310									310			-
Other (income) expense, net		(253	)		(2	)					(348	)		(3	)		(353	)		100
(Loss) Income From Continuing Operations Before Taxes		(2,545	)		(2,042	)		(380	)		348			(3,418	)		(5,492	)		2,947
Income Tax Provision (Benefit)		69			(378	)⁽⁴⁾		(21	)⁽⁴⁾		77	⁽⁴⁾		(61	)⁽⁴⁾		(383	)		452
Net (Loss) Income from Continuing Operations		(2,614	)		(1,664	)		(359	)		271			(3,357	)		(5,109	)		2,495
Net (Loss) Income from Continuing Operations Attributable to Merck & Co., Inc.		(2,617	)		(1,664	)		(359	)		271			(3,357	)		(5,109	)		2,492
(Loss) Earnings per Common Share Assuming Dilution from Continuing Operations	$	(1.03	)		(0.66	)		(0.14	)		0.11			(1.32	)		(2.01	)	$	0.98

Tax Rate		-2.7	%																	15.3	%

Full Year
Cost of sales	$	13,618			3,355			175						260	⁽⁵⁾		3,790		$	9,828
Selling, general and administrative		8,955			225			47									272			8,683
Research and development		13,397			12			83						4,243	⁽³⁾		4,338			9,059
Restructuring costs		575						575									575			-
Other (income) expense, net		(890	)		50						(1,292	)		(20	)		(1,262	)		372
Income From Continuing Operations Before Taxes		5,863			(3,642	)		(880	)		1,292			(4,483	)		(7,713	)		13,576
Income Tax Provision (Benefit)		1,340			(627	)⁽⁴⁾		(80	)⁽⁴⁾		284	⁽⁴⁾		(303	)⁽⁴⁾		(726	)		2,066
Net Income from Continuing Operations		4,523			(3,015	)		(800	)		1,008			(4,180	)		(6,987	)		11,510
Net Income from Continuing Operations Attributable to Merck & Co., Inc.		4,519			(3,015	)		(800	)		1,008			(4,180	)		(6,987	)		11,506
Earnings per Common Share Assuming Dilution from Continuing Operations	$	1.78			(1.19	)		(0.31	)		0.40			(1.65	)		(2.75	)	$	4.53

Tax Rate		22.9	%																	15.2	%

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⁾Amounts included in cost of sales primarily reflect a $1.6 billion intangible asset impairment charge related to ZERBAXA and expenses for the amortization of intangible assets. Amounts included in selling, general and administrative expenses reflect acquisition and divestiture-related costs, including $95 million of transaction costs related to the acquisition of Arqule, Inc. for the full year. Amounts included in other (income) expense, net, primarily reflect costs related to increases 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.

⁽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⁾ Amounts for the fourth quarter and full year primarily include charges of $2.7 billion for the acquisition of VelosBio Inc., $462 million for the acquisition of OncoImmune and $45 million for the discontinuation of COVID-19 development programs. Additionally, the full year includes $1.1 billion of charges for upfront payments related to license and collaboration agreements.

⁽⁴⁾ Represent the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. Acquisition and divestiture-related costs also includes a tax cost of $67 million, representing an adjustment to the tax benefits recorded in conjunction with the 2015 Cubist Pharmaceuticals, Inc. acquisition.

⁽⁵⁾ Represents charges for the discontinuation of COVID-19 development programs.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS

FOURTH QUARTER 2021

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global							U.S.							International
	4Q 2021		4Q 2020			% Change		4Q 2021			4Q 2020		% Change		4Q 2021		4Q 2020			% Change
TOTAL SALES ⁽¹⁾	$	13,521	$	10,948			24	$	6,259		$	5,288		18	$	7,262	$	5,660			28
PHARMACEUTICAL		12,039		9,813			23		5,790			4,903		18		6,249		4,910			27
Oncology
Keytruda		4,577		3,993			15		2,657			2,246		18		1,920		1,747			10
Alliance Revenue - Lynparza ⁽²⁾		268		206			30		144			120		20		123		85			44
Alliance Revenue - Lenvima ⁽²⁾		206		158			30		131			90		46		75		69			10
Vaccines ⁽³⁾
Gardasil / Gardasil 9		1,528		998			53		275			546		-50		1,253		452			177
ProQuad / M-M-R II / Varivax		509		488			4		374			345		8		135		144			-6
Pneumovax 23		292		339			-14		193			249		-22		99		90			10
RotaTeq		213		196			9		109			131		-17		105		65			61
Vaqta		41		31			31		20			25		-19		21		7			*
Hospital Acute Care
Bridion		436		355			23		218			172		27		218		183			19
Prevymis		100		80			25		42			32		30		58		48			21
Noxafil		62		82			-25		11			15		-25		50		67			-25
Primaxin		65		62			5		1					*		64		62			4
Cancidas		45		65			-31					5		-98		45		60			-25
Invanz		45		53			-15		(3	)		2		*		48		50			-5
Zerbaxa		10		19			-47		9			17		-44		1		2			-68
Immunology
Simponi		206		223			-8									206		223			-8
Remicade		67		88			-24									67		88			-24
Neuroscience
Belsomra		80		83			-4		22			14		58		58		69			-16
Virology
Molnupiravir		952					*		632					*		320					*
Isentress / Isentress HD		178		211			-15		72			83		-12		106		128			-17
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁴⁾		94		65			45		90			58		55		4		7			-42
Adempas ⁽⁵⁾		63		53			19									63		53			19
Diabetes ⁽⁶⁾
Januvia		878		857			3		407			360		13		472		497			-5
Janumet		514		472			9		123			115		7		391		356			10
Other Pharmaceutical ⁽⁷⁾		610		636			-4		263			278		-5		347		358			-3

ANIMAL HEALTH		1,261		1,168			8		395			361		10		866		807			7
Livestock		791		794					158			165		-4		633		629			1
Companion Animals		470		374			26		237			196		21		233		178			31

Other Revenues ⁽⁸⁾		221		(33	)		*		74			24		*		147		(57	)		*

* 200% or greater

Sum of U.S. plus international may not equal global due to rounding.

⁽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 $2,715 million in the fourth quarter of 2021 and $2,163 million in the fourth quarter of 2020.

⁽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 $1,475 million in the fourth quarter of 2021 and $1,412 million in the fourth quarter of 2020.

⁽⁷⁾ Includes Pharmaceutical products not individually shown above.

⁽⁸⁾ Other Revenues are comprised primarily of third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS

FULL YEAR 2021

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	Global							U.S.							International
	Full Year 2021			Full Year 2020		% Change		Full Year 2021			Full Year 2020		% Change		Full Year 2021			Full Year 2020		% Change
TOTAL SALES ⁽¹⁾	$	48,704		$	41,518		17	$	22,425		$	19,588		14	$	26,279		$	21,930		20
PHARMACEUTICAL		42,754			36,610		17		20,401			18,010		13		22,353			18,600		20
Oncology
Keytruda		17,186			14,380		20		9,765			8,352		17		7,421			6,028		23
Alliance Revenue - Lynparza ⁽²⁾		989			725		36		515			417		24		473			308		54
Alliance Revenue - Lenvima ⁽²⁾		704			580		21		417			359		16		287			220		30
Vaccines ⁽³⁾
Gardasil / Gardasil 9		5,673			3,938		44		1,881			1,755		7		3,792			2,184		74
ProQuad / M-M-R II / Varivax		2,135			1,878		14		1,629			1,378		18		506			500		1
Pneumovax 23		893			1,087		-18		547			727		-25		346			359		-4
RotaTeq		807			797		1		473			486		-3		334			311		7
Vaqta		179			170		5		100			103		-3		79			67		18
Hospital Acute Care
Bridion		1,532			1,198		28		762			583		31		770			615		25
Prevymis		370			281		32		153			119		28		218			162		35
Noxafil		259			329		-21		60			42		42		199			287		-30
Primaxin		259			251		3		2			2		-36		258			248		4
Cancidas		212			213				4			7		-42		208			207		1
Invanz		202			211		-4		(5	)		9		-157		207			202		3
Zerbaxa		(1	)		130		-101		4			74		-94		(5	)		56		-110
Immunology
Simponi		825			838		-2									825			838		-2
Remicade		299			330		-9									299			330		-9
Neuroscience
Belsomra		318			327		-3		78			81		-4		241			247		-2
Virology
Molnupiravir		952					*		632					*		320					*
Isentress / Isentress HD		769			857		-10		294			326		-10		474			531		-11
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁴⁾		342			281		22		312			259		21		30			22		35
Adempas ⁽⁵⁾		252			220		14									252			220		14
Diabetes ⁽⁶⁾
Januvia		3,324			3,306		1		1,404			1,470		-4		1,920			1,836		5
Janumet		1,964			1,971		-		367			477		-23		1,597			1,494		7
Other Pharmaceutical ⁽⁷⁾		2,310			2,312		-		1,007			984		2		1,302			1,328		-2

ANIMAL HEALTH		5,568			4,703		18		1,758			1,484		18		3,810			3,219		18
Livestock		3,295			2,939		12		667			612		9		2,628			2,327		13
Companion Animals		2,273			1,764		29		1,091			872		25		1,182			892		32

Other Revenues ⁽⁸⁾		382			205		86		266			94		184		116			111		4

* 200% or greater

Sum of U.S. plus international may not equal global due to rounding.

⁽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 $10,132 million and $8,258 million on a global basis for December YTD 2021 and 2020, 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 $5,584 million and $5,588 million on a global basis for December YTD 2021 and 2020, respectively.

⁽⁷⁾Includes Pharmaceutical products not individually shown above.

⁽⁸⁾Other Revenues are comprised primarily of third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities. Other Revenues for December YTD include $185 million related to the receipt of milestone payments for an out-licensed product.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES - CONTINUING OPERATIONS

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

	2021															2020															% Change
	1Q			2Q			3Q			4Q			Full Year			1Q			2Q			3Q			4Q			Full Year			4Q		Full Year
TOTAL PHARMACEUTICAL	$	9,238		$	9,980		$	11,496		$	12,039		$	42,754		$	8,905		$	8,178		$	9,714		$	9,813		$	36,610			23		17

United States		4,294			4,647			5,670			5,790			20,401			4,308			3,958			4,842			4,903			18,010			18		13
% Pharmaceutical Sales		46.5	%		46.6	%		49.3	%		48.1	%		47.7	%		48.4	%		48.4	%		49.8	%		50.0	%		49.2	%

Europe ⁽¹⁾		2,276			2,404			2,445			2,655			9,780			2,116			1,855			2,171			2,314			8,455			15		16
% Pharmaceutical Sales		24.6	%		24.1	%		21.3	%		22.1	%		22.9	%		23.8	%		22.7	%		22.3	%		23.6	%		23.1	%

China		688			944			1,278			1,352			4,262			628			600			764			670			2,661			102		60
% Pharmaceutical Sales		7.4	%		9.5	%		11.1	%		11.2	%		10.0	%		7.1	%		7.3	%		7.9	%		6.8	%		7.3	%

Japan		607			637			614			771			2,629			561			601			648			704			2,514			10		5
% Pharmaceutical Sales		6.6	%		6.4	%		5.3	%		6.4	%		6.1	%		6.3	%		7.3	%		6.7	%		7.2	%		6.9	%

Asia Pacific (other than China and Japan)		437			442			450			488			1,817			411			377			411			414			1,614			18		13
% Pharmaceutical Sales		4.7	%		4.4	%		3.9	%		4.1	%		4.2	%		4.6	%		4.6	%		4.2	%		4.2	%		4.4	%

Latin America		353			379			434			421			1,587			314			312			372			371			1,369			13		16
% Pharmaceutical Sales		3.8	%		3.8	%		3.8	%		3.5	%		3.7	%		3.5	%		3.8	%		3.8	%		3.8	%		3.7	%

Eastern Europe/Middle East/Africa		357			318			362			278			1,315			353			309			289			251			1,199			11		10
% Pharmaceutical Sales		3.9	%		3.2	%		3.1	%		2.3	%		3.1	%		4.0	%		3.8	%		3.0	%		2.6	%		3.3	%

Canada		160			157			164			167			650			159			121			169			149			599			12		9
% Pharmaceutical Sales		1.7	%		1.6	%		1.4	%		1.4	%		1.5	%		1.8	%		1.5	%		1.7	%		1.5	%		1.6	%

Other		66			52			79			117			313			55			45			48			37			189			216		66
% Pharmaceutical Sales		0.8	%		0.4	%		0.8	%		0.9	%		0.8	%		0.5	%		0.6	%		0.6	%		0.3	%		0.5	%

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

⁽¹⁾ Europe represents all European Union countries, the European Union accession markets and the United Kingdom.

MERCK & CO., INC.

OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

OTHER (INCOME) EXPENSE, NET

		4Q21			4Q20			Full Year 2021			Full Year 2020
Interest income	$	(9	)	$	(11	)	$	(36	)	$	(59	)
Interest expense		208			206			806			831
Exchange losses		95			56			297			145
Income from investments in equity securities, net ⁽¹⁾		(403	)		(375	)		(1,940	)		(1,338	)
Net periodic defined benefit plan cost (credit) other than service cost		(53	)		(80	)		(212	)		(339	)
Other, net		(171	)		(49	)		(256	)		(130	)
Total	$	(333	)	$	(253	)	$	(1,341	)	$	(890	)

⁽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.