EX-99.2 3 a14-11297_1ex99d2.htm EX-99.2

Exhibit 99.2

 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

 

 

 

2014

 

2013

 

% Change

 

 

 

1Q

 

1Q

 

2Q

 

3Q

 

4Q

 

Full Year

 

1Q

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

10,264

 

$

10,671

 

$

11,010

 

$

11,032

 

$

11,319

 

$

44,033

 

-4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

3,903

 

3,959

 

4,284

 

4,104

 

4,607

 

16,954

 

-1

%

Marketing and administrative

 

2,734

 

2,987

 

3,140

 

2,803

 

2,982

 

11,911

 

-8

%

Research and development

 

1,574

 

1,907

 

2,101

 

1,660

 

1,836

 

7,503

 

-17

%

Restructuring costs

 

125

 

119

 

155

 

870

 

565

 

1,709

 

5

%

Equity income from affiliates

 

(124

)

(133

)

(116

)

(102

)

(53

)

(404

)

-7

%

Other (income) expense, net

 

(39

)

282

 

201

 

172

 

157

 

815

 

*

 

Income Before Taxes

 

2,091

 

1,550

 

1,245

 

1,525

 

1,225

 

5,545

 

35

%

Income Tax (Benefit) Provision

 

360

 

(66

)

310

 

375

 

410

 

1,028

 

 

 

Net Income

 

1,731

 

1,616

 

935

 

1,150

 

815

 

4,517

 

7

%

Less: Net Income Attributable to Noncontrolling Interests

 

26

 

23

 

29

 

26

 

34

 

113

 

 

 

Net Income Attributable to
Merck & Co., Inc.

 

$

1,705

 

$

1,593

 

$

906

 

$

1,124

 

$

781

 

$

4,404

 

7

%

Earnings per Common Share Assuming Dilution

 

$

0.57

 

$

0.52

 

$

0.30

 

$

0.38

 

$

0.26

 

$

1.47

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

2,971

 

3,053

 

3,010

 

2,960

 

2,959

 

2,996

 

 

 

Tax Rate

 

17.2

%

-4.3

%

24.9

%

24.6

%

33.5

%

18.5

%

 

 

 

* 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

FIRST QUARTER 2013

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

 

 

 

 

 

Acquisition-

 

Restructuring

 

Adjustment

 

 

 

 

 

GAAP

 

Related Costs (1)

 

Costs (2)

 

Subtotal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

10,671

 

 

 

 

 

 

 

$

10,671

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs, Expenses and Other

 

 

 

 

 

 

 

 

 

 

 

Materials and production

 

3,959

 

1,184

 

43

 

1,227

 

2,732

 

Marketing and administrative

 

2,987

 

23

 

17

 

40

 

2,947

 

Research and development

 

1,907

 

30

 

15

 

45

 

1,862

 

Restructuring costs

 

119

 

 

 

119

 

119

 

 

Equity income from affiliates

 

(133

)

 

 

 

 

 

(133

)

Other (income) expense, net

 

282

 

 

 

 

 

 

282

 

Income Before Taxes

 

1,550

 

(1,237

)

(194

)

(1,431

)

2,981

 

Taxes on Income

 

(66

)

 

 

 

 

(439

)(3)

373

 

Net Income

 

1,616

 

 

 

 

 

(992

)

2,608

 

Less: Net Income Attributable to Noncontrolling Interests

 

23

 

 

 

 

 

 

23

 

Net Income Attributable to Merck & Co., Inc.

 

$

1,593

 

 

 

 

 

$

(992

)

$

2,585

 

Earnings per Common Share Assuming Dilution

 

$

0.52

 

 

 

 

 

 

 

$

0.85

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shares Outstanding Assuming Dilution

 

3,053

 

 

 

 

 

 

 

3,053

 

Tax Rate

 

-4.3

%

 

 

 

 

 

 

12.5

%

 

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.

 

(3) Represents the estimated tax impact on the reconciling items, as well as a benefit of approximately $160 million associated with the resolution of a previously disclosed federal income tax issue.

 



 

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

FIRST QUARTER 2014

(AMOUNTS IN MILLIONS)

Table 3a

 

 

 

Global

 

U.S.

 

International

 

 

 

1Q14

 

1Q13

 

% Change

 

1Q14

 

1Q13

 

% Change

 

1Q14

 

1Q13

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL SALES (1)

 

$

10,264

 

$

10,671

 

-4

 

$

4,146

 

$

4,215

 

-2

 

$

6,119

 

$

6,457

 

-5

 

PHARMACEUTICAL

 

8,451

 

8,891

 

-5

 

3,130

 

3,256

 

-4

 

5,321

 

5,635

 

-6

 

Primary Care and Women’s Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cardiovascular

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zetia

 

611

 

629

 

-3

 

323

 

334

 

-3

 

288

 

295

 

-3

 

Vytorin

 

361

 

394

 

-8

 

120

 

156

 

-23

 

241

 

238

 

1

 

Diabetes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Januvia

 

858

 

884

 

-3

 

474

 

462

 

3

 

384

 

422

 

-9

 

Janumet

 

476

 

409

 

16

 

213

 

197

 

8

 

263

 

212

 

24

 

General Medicine & Women’s Health

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NuvaRing

 

168

 

151

 

11

 

103

 

89

 

15

 

65

 

62

 

5

 

Follistim AQ

 

110

 

122

 

-10

 

34

 

41

 

-17

 

76

 

81

 

-6

 

Dulera

 

102

 

68

 

49

 

97

 

66

 

47

 

5

 

3

 

90

 

Implanon

 

102

 

84

 

21

 

60

 

42

 

41

 

42

 

42

 

 

 

Hospital and Specialty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hepatitis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Peglntron

 

112

 

126

 

-11

 

4

 

9

 

-53

 

108

 

117

 

-7

 

Victrelis

 

59

 

110

 

-46

 

5

 

37

 

-87

 

54

 

73

 

-25

 

HIV

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Isentress

 

390

 

362

 

8

 

190

 

187

 

2

 

199

 

175

 

14

 

Hospital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancidas

 

166

 

162

 

3

 

7

 

7

 

4

 

159

 

156

 

2

 

Invanz

 

114

 

110

 

4

 

60

 

54

 

11

 

55

 

57

 

-3

 

Noxafil

 

74

 

65

 

13

 

20

 

18

 

8

 

55

 

47

 

16

 

Bridion

 

73

 

63

 

16

 

 

 

 

 

 

 

73

 

63

 

16

 

Primaxin

 

71

 

84

 

-15

 

3

 

4

 

-10

 

68

 

80

 

-16

 

Immunology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remicade

 

604

 

549

 

10

 

 

 

 

 

 

 

604

 

549

 

10

 

Simponi

 

157

 

108

 

45

 

 

 

 

 

 

 

157

 

108

 

45

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cosopt / Trusopt

 

99

 

105

 

-7

 

1

 

4

 

-76

 

98

 

102

 

-4

 

Oncology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emend

 

122

 

116

 

5

 

70

 

66

 

7

 

52

 

50

 

4

 

Temodar

 

83

 

216

 

-62

 

 

 

108

 

*

 

83

 

108

 

-23

 

Diversified Brands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respiratory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nasonex

 

312

 

385

 

-19

 

133

 

150

 

-11

 

179

 

235

 

-24

 

Singulair

 

271

 

337

 

-20

 

5

 

1

 

*

 

266

 

336

 

-21

 

Clarinex

 

62

 

61

 

2

 

6

 

6

 

11

 

55

 

55

 

1

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cozaar / Hyzaar

 

205

 

267

 

-23

 

6

 

11

 

-47

 

199

 

256

 

-22

 

Arcoxia

 

128

 

121

 

6

 

 

 

 

 

 

 

128

 

121

 

6

 

Fosamax

 

123

 

137

 

-10

 

4

 

5

 

-23

 

119

 

132

 

-9

 

Propecia

 

74

 

68

 

8

 

5

 

6

 

-26

 

69

 

62

 

12

 

Zocor

 

64

 

82

 

-21

 

5

 

6

 

-22

 

60

 

76

 

-21

 

Remeron

 

50

 

52

 

-4

 

1

 

1

 

-35

 

50

 

51

 

-3

 

Vaccines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gardasil

 

383

 

390

 

-2

 

271

 

247

 

10

 

113

 

142

 

-21

 

ProQuad, M-M-R II and Varivax

 

280

 

272

 

3

 

240

 

246

 

-2

 

39

 

26

 

49

 

RotaTeq

 

169

 

162

 

4

 

130

 

130

 

 

 

39

 

32

 

20

 

Zostavax

 

142

 

168

 

-15

 

129

 

152

 

-15

 

13

 

16

 

-18

 

Pneumovax 23

 

101

 

111

 

-9

 

83

 

86

 

-4

 

18

 

25

 

-29

 

Other Pharmaceutical (2)

1,175

 

1,361

 

-14

 

328

 

328

 

 

 

845

 

1,030

 

-18

 

ANIMAL HEALTH

 

813

 

840

 

-3

 

177

 

231

 

-23

 

636

 

609

 

4

 

CONSUMER CARE

 

546

 

571

 

-4

 

390

 

400

 

-2

 

156

 

171

 

-9

 

Claritin OTC

 

170

 

177

 

-4

 

139

 

146

 

-5

 

31

 

31

 

-2

 

Other Revenues (3)

 

454

 

369

 

23

 

448

 

328

 

37

 

6

 

41

 

-85

 

Astra

 

147

 

262

 

-44

 

147

 

262

 

-44

 

 

 

 

 

 

 

 

* 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 $98 million and $53 million on a global basis for first quarter 2014 and 2013, respectively.

(3) Other revenues are comprised primarily of alliance revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities. On October 1, 2013, the company divested a substantial portion of its third-party manufacturing sales. Other revenues in the first quarter of 2014 include $232 million of revenue recognized in connection with the sale of U.S. Saphris rights.

 



 

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

 

1Q14

 

1Q13

 

2Q13

 

3Q13

 

4Q13

 

Full Year

 

1Q

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL PHARMACEUTICAL

 

$

8,451

 

$

8,891

 

$

9,310

 

$

9,475

 

$

9,760

 

$

37,437

 

-5

 

United States

 

3,130

 

3,256

 

3,689

 

4,148

 

3,761

 

14,854

 

-4

 

% Pharmaceutical Sales

 

37.0

%

36.6

%

39.6

%

43.8

%

38.5

%

39.7

%

 

 

Europe (1)

 

2,478

 

2,465

 

2,343

 

2,276

 

2,535

 

9,619

 

1

 

% Pharmaceutical Sales

 

29.3

%

27.7

%

25.2

%

24.0

%

26.0

%

25.7

%

 

 

Japan

 

835

 

1,034

 

948

 

893

 

1,074

 

3,949

 

-19

 

% Pharmaceutical Sales

 

9.9

%

11.6

%

10.2

%

9.4

%

11.0

%

10.5

%

 

 

Latin America

 

538

 

596

 

676

 

628

 

667

 

2,567

 

-10

 

% Pharmaceutical Sales

 

6.4

%

6.7

%

7.3

%

6.6

%

6.8

%

6.9

%

 

 

Asia Pacific

 

809

 

822

 

874

 

799

 

870

 

3,365

 

-1

 

% Pharmaceutical Sales

 

9.6

%

9.2

%

9.4

%

8.4

%

8.9

%

9.0

%

 

 

China

 

282

 

271

 

297

 

242

 

293

 

1,103

 

4

 

Eastern Europe/Middle East Africa

 

415

 

439

 

479

 

431

 

534

 

1,883

 

-5

 

% Pharmaceutical Sales

 

4.9

%

4.9

%

5.1

%

4.5

%

5.5

%

5.0

%

 

 

Canada

 

200

 

245

 

257

 

253

 

276

 

1,030

 

-18

 

% Pharmaceutical Sales

 

2.4

%

2.8

%

2.8

%

2.7

%

2.8

%

2.8

%

 

 

Other

 

46

 

34

 

45

 

47

 

43

 

170

 

34

 

% Pharmaceutical Sales

 

0.5

%

0.4

%

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.

FIRST QUARTER 2014

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

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

 

 

EQUITY INCOME FROM AFFILIATES

 

 

 

1Q14

 

1Q13

 

ASTRAZENECA LP

 

$

98

 

$

125

 

Other (1)

 

26

 

8

 

TOTAL

 

$

124

 

$

133

 

 

 

 

 

 

 

(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.

 

 

 

1Q14

 

1Q13

 

GARDASIL

 

$

64

 

$

73

 

OTHER VIRAL VACCINES

 

25

 

29

 

ROTATEQ

 

17

 

14

 

HEPATITIS VACCINES

 

9

 

8

 

ZOSTAVAX

 

7

 

 

Other Vaccines

 

95

 

106

 

TOTAL SANOFI PASTEUR MSD SALES

 

$

217

 

$

230

 

 

 

OTHER (INCOME) EXPENSE, NET

 

 

 

1Q14

 

1Q13

 

INTEREST INCOME

 

$

(61

)

$

(57

)

INTEREST EXPENSE

 

188

 

184

 

EXCHANGE LOSSES

 

34

 

212

 

Other, net

 

(200

)

(57

)

TOTAL

 

$

(39

)

$

282