EX-99.2 3 a15-9874_1ex99d2.htm EX-99.2

Exhibit 99.2

 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

 

 

 

2015

 

2014

 

% Change

 

 

 

1Q

 

1Q

 

2Q

 

3Q

 

4Q

 

Dec YTD

 

1Q

 

Sales

 

$

9,425

 

$

10,264

 

$

10,934

 

$

10,557

 

$

10,482

 

$

42,237

 

-8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

3,569

 

3,903

 

4,893

 

4,223

 

3,749

 

16,768

 

-9

%

Marketing and administrative

 

2,601

 

2,734

 

2,973

 

2,975

 

2,924

 

11,606

 

-5

%

Research and development

 

1,737

 

1,574

 

1,664

 

1,659

 

2,283

 

7,180

 

10

%

Restructuring costs

 

82

 

125

 

163

 

376

 

349

 

1,013

 

-34

%

Other (income) expense, net (1)

 

55

 

(163

)

(650

)

(166

)

(10,634

)

(11,613

)

*

 

Income Before Taxes

 

1,381

 

2,091

 

1,891

 

1,490

 

11,811

 

17,283

 

-34

%

Income Tax Provision (Benefit)

 

423

 

360

 

(142

)

648

 

4,484

 

5,349

 

 

 

Net Income

 

958

 

1,731

 

2,033

 

842

 

7,327

 

11,934

 

-45

%

Less: Net Income (Loss) Attributable to Noncontrolling Interests

 

5

 

26

 

29

 

(53

)

11

 

14

 

 

 

Net Income Attributable to Merck & Co., Inc.

 

$

953

 

$

1,705

 

$

2,004

 

$

895

 

$

7,316

 

$

11,920

 

-44

%

Earnings per Common Share Assuming Dilution

 

$

0.33

 

$

0.57

 

$

0.68

 

$

0.31

 

$

2.54

 

$

4.07

 

-42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

2,865

 

2,971

 

2,949

 

2,911

 

2,880

 

2,928

 

 

 

Tax Rate

 

30.6

%

17.2

%

-7.5

%

43.5

%

38.0

%

30.9

%

 

 

 

* 100% or greater

 

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

 

(1) Other (income) expense, net includes equity income from affiliates.  Prior periods have been reclassified to conform to the current presentation.

 



 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME

GAAP TO NON-GAAP RECONCILIATION

FIRST QUARTER 2014

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

 

 

 

 

 

Acquisition and

 

 

 

 

 

 

 

 

 

 

 

Divestiture-

 

Restructuring

 

Adjustment

 

 

 

 

 

GAAP

 

Related Costs (1)

 

Costs (2)

 

Subtotal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

10,264

 

 

 

 

 

 

 

$

10,264

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

3,903

 

1,126

 

119

 

1,245

 

2,658

 

Marketing and administrative

 

2,734

 

11

 

31

 

42

 

2,692

 

Research and development

 

1,574

 

 

 

51

 

51

 

1,523

 

Restructuring costs

 

125

 

 

 

125

 

125

 

 

Other (income) expense, net (4)

 

(163

)

 

 

 

 

 

 

(163

)

Income Before Taxes

 

2,091

 

(1,137

)

(326

)

(1,463

)

3,554

 

Taxes on Income

 

360

 

 

 

 

 

(567

)(3)

927

 

Net Income

 

1,731

 

 

 

 

 

(896

)

2,627

 

Less: Net Income Attributable to Noncontrolling Interests

 

26

 

 

 

 

 

 

 

26

 

Net Income Attributable to Merck & Co., Inc.

 

$

1,705

 

 

 

 

 

(896

)

$

2,601

 

Earnings per Common Share Assuming Dilution

 

$

0.57

 

 

 

 

 

 

 

$

0.88

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

2,971

 

 

 

 

 

 

 

2,971

 

Tax Rate

 

17.2

%

 

 

 

 

 

 

26.1

%

 

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 acquisitions. Amounts included in marketing and administrative expenses reflect integration costs.

 

(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, as well as a benefit of approximately $300 million associated with a capital loss generated in the quarter.

 

(4) Other (income) expense, net includes equity income from affiliates.

 



 

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

FIRST QUARTER 2015

(AMOUNTS IN MILLIONS)

Table 3a

 

 

 

Global

 

U.S.

 

International

 

 

 

1Q 2015

 

1Q 2014

 

% Change

 

1Q 2015

 

1Q 2014

 

% Change

 

1Q 2015

 

1Q 2014

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL SALES (1)

 

$

9,425

 

$

10,264

 

-8

 

$

3,953

 

$

4,146

 

-5

 

$

5,472

 

$

6,119

 

-11

 

PHARMACEUTICAL

 

8,266

 

8,451

 

-2

 

3,637

 

3,130

 

16

 

4,629

 

5,321

 

-13

 

Primary Care and Women’s Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cardiovascular

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zetia

 

568

 

611

 

-7

 

345

 

323

 

7

 

223

 

288

 

-23

 

Vytorin

 

320

 

361

 

-11

 

111

 

120

 

-8

 

209

 

241

 

-13

 

Diabetes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Januvia

 

884

 

858

 

3

 

501

 

474

 

6

 

383

 

384

 

 

 

Janumet

 

509

 

476

 

7

 

212

 

213

 

 

 

297

 

263

 

13

 

General Medicine & Women’s Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NuvaRing

 

166

 

168

 

-1

 

112

 

103

 

9

 

54

 

65

 

-17

 

Implanon / Nexplanon

 

137

 

102

 

35

 

84

 

60

 

41

 

53

 

42

 

26

 

Dulera

 

130

 

102

 

28

 

125

 

97

 

29

 

5

 

5

 

8

 

Follistim AQ

 

82

 

110

 

-26

 

34

 

34

 

 

 

47

 

76

 

-38

 

Hospital and Specialty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hepatitis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PegIntron

 

56

 

112

 

-50

 

 

 

4

 

*

 

56

 

108

 

-48

 

HIV

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Isentress

 

385

 

390

 

-1

 

187

 

190

 

-2

 

198

 

199

 

 

 

Hospital Acute Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cubicin(2)

 

187

 

5

 

*

 

166

 

 

 

 

 

21

 

5

 

*

 

Cancidas

 

163

 

166

 

-2

 

6

 

7

 

-10

 

157

 

159

 

-2

 

Invanz

 

132

 

114

 

15

 

67

 

60

 

12

 

65

 

55

 

19

 

Noxafil

 

111

 

74

 

50

 

45

 

20

 

*

 

66

 

55

 

21

 

Bridion

 

85

 

73

 

17

 

 

 

 

 

 

 

85

 

73

 

17

 

Primaxin

 

65

 

71

 

-8

 

3

 

3

 

-12

 

62

 

68

 

-8

 

Immunology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remicade

 

501

 

604

 

-17

 

 

 

 

 

 

 

501

 

604

 

-17

 

Simponi

 

158

 

157

 

1

 

 

 

 

 

 

 

158

 

157

 

1

 

Oncology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emend

 

122

 

122

 

 

 

78

 

70

 

12

 

43

 

52

 

-16

 

Keytruda

 

83

 

 

 

*

 

66

 

 

 

*

 

16

 

 

 

*

 

Temodar

 

74

 

83

 

-10

 

 

 

 

 

 

 

74

 

83

 

-10

 

Diversified Brands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respiratory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nasonex

 

289

 

312

 

-7

 

143

 

133

 

7

 

146

 

179

 

-18

 

Singulair

 

245

 

271

 

-9

 

6

 

5

 

22

 

240

 

266

 

-10

 

Clarinex

 

51

 

62

 

-18

 

5

 

6

 

-19

 

46

 

55

 

-17

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cozaar / Hyzaar

 

185

 

205

 

-10

 

8

 

6

 

33

 

177

 

199

 

-11

 

Arcoxia

 

123

 

128

 

-4

 

 

 

 

 

 

 

123

 

128

 

-4

 

Fosamax

 

94

 

123

 

-24

 

3

 

4

 

-25

 

91

 

119

 

-24

 

Propecia

 

53

 

74

 

-28

 

4

 

5

 

-17

 

49

 

69

 

-28

 

Zocor

 

49

 

64

 

-24

 

5

 

5

 

7

 

44

 

60

 

-26

 

Vaccines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gardasil / Gardasil 9

 

359

 

383

 

-6

 

295

 

271

 

9

 

64

 

113

 

-43

 

ProQuad, M-M-R II and Varivax

 

348

 

280

 

24

 

308

 

240

 

28

 

40

 

39

 

1

 

RotaTeq

 

192

 

169

 

14

 

157

 

130

 

21

 

35

 

39

 

-9

 

Zostavax

 

175

 

142

 

23

 

151

 

129

 

17

 

24

 

13

 

84

 

Pneumovax 23

 

110

 

101

 

9

 

77

 

83

 

-7

 

33

 

18

 

89

 

Other Pharmaceutical (3)

 

1,075

 

1,378

 

-22

 

333

 

335

 

-1

 

742

 

1,042

 

-29

 

ANIMAL HEALTH

 

829

 

813

 

2

 

203

 

177

 

15

 

626

 

636

 

-2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSUMER CARE (4)

 

2

 

546

 

*

 

0

 

390

 

*

 

2

 

156

 

-99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Revenues (5)

 

328

 

454

 

-28

 

113

 

448

 

-75

 

215

 

6

 

*

 

 

* 100% or greater

 

(1) Only select products are shown.

 

(2) Cubicin results for the first quarter 2015 represent sales for the two months following Merck’s acquisition of Cubist. Cubicin sales for 2014 represent the previous licensing agreement in Japan prior to the acquisition.

 

(3) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $78 million and $98 million on a global basis for first quarter 2015 and 2014, respectively.

 

(4) On October 1, 2014, the company divested the Consumer Care business to Bayer.

 

(5) Other revenues are comprised primarily of alliance revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities. Other revenues in 2014 include $232 million of revenue recognized in connection with the sale of U.S. Saphris rights. On June 30, 2014, AstraZeneca exercised its option to buy Merck’s interest in a subsidiary and through it, Merck’s interest in Nexium and Prilosec. As a result, the company no longer records supply sales for these products.

 



 

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

 

 

 

2015

 

2014

 

% Change

 

 

 

1Q

 

1Q

 

2Q

 

3Q

 

4Q

 

Full Year

 

1Q

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL PHARMACEUTICAL

 

$

8,266

 

$

8,451

 

$

9,087

 

$

9,134

 

$

9,370

 

$

36,042

 

-2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

3,637

 

3,130

 

3,462

 

3,837

 

3,786

 

14,214

 

16

 

% Pharmaceutical Sales

 

44.0

%

37.0

%

38.1

%

42.0

%

40.4

%

39.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe (1)

 

2,024

 

2,478

 

2,537

 

2,297

 

2,269

 

9,581

 

-18

 

% Pharmaceutical Sales

 

24.5

%

29.3

%

27.9

%

25.2

%

24.2

%

26.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Japan

 

627

 

835

 

859

 

730

 

965

 

3,389

 

-25

 

% Pharmaceutical Sales

 

7.6

%

9.9

%

9.5

%

8.0

%

10.3

%

9.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

809

 

809

 

840

 

878

 

910

 

3,438

 

0

 

% Pharmaceutical Sales

 

9.8

%

9.6

%

9.2

%

9.6

%

9.7

%

9.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

China

 

318

 

282

 

309

 

318

 

332

 

1,242

 

13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

630

 

538

 

668

 

673

 

678

 

2,557

 

17

 

% Pharmaceutical Sales

 

7.6

%

6.4

%

7.3

%

7.4

%

7.2

%

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eastern Europe/Middle East Africa

 

321

 

415

 

459

 

443

 

500

 

1,817

 

-23

 

% Pharmaceutical Sales

 

3.9

%

4.9

%

5.1

%

4.9

%

5.3

%

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada

 

170

 

200

 

218

 

218

 

218

 

854

 

-15

 

% Pharmaceutical Sales

 

2.1

%

2.4

%

2.4

%

2.4

%

2.3

%

2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

48

 

46

 

44

 

58

 

44

 

192

 

4

 

% Pharmaceutical Sales

 

0.6

%

0.5

%

0.5

%

0.6

%

0.5

%

0.5

%

 

 

 

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

 



 

MERCK & CO., INC.

FIRST QUARTER 2015

OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

 

 

OTHER (INCOME) EXPENSE, NET

 

 

 

1Q15

 

1Q14

 

INTEREST INCOME

 

$

(74

)

$

(61

)

INTEREST EXPENSE

 

164

 

188

 

EXCHANGE LOSSES

 

95

 

34

 

EQUITY INCOME FROM AFFILIATES (1)

 

(145

)

(124

)

Other, net

 

15

 

(200

)

TOTAL

 

$

55

 

$

(163

)

 

(1) Includes the performance of the company’s joint ventures and other equity method affiliates, including the Sanofi Pasteur MSD partnership, certain investment funds, as well as AstraZeneca LP until the termination of that relationship on June 30, 2014. Equity income from AstraZeneca LP was $98 million in the first quarter of 2014.