Merck & Co. (MRK) 8-K Results of Operations and Financial Condition

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			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Dec YTD			2Q		June YTD
Sales	$	9,425		$	9,785		$	19,210		$	10,264		$	10,934		$	21,198		$	10,557		$	10,482		$	42,237		-11	%	-9	%
Costs, Expenses and Other
Materials and production	3,569			3,754			7,323			3,903			4,893			8,796			4,223			3,749			16,768			-23	%	-17	%
Marketing and administrative	2,601			2,624			5,226			2,734			2,973			5,707			2,975			2,924			11,606			-12	%	-8	%
Research and development	1,737			1,670			3,407			1,574			1,664			3,238			1,659			2,283			7,180			—		5	%
Restructuring costs	82			191			273			125			163			288			376			349			1,013			17	%	-5	%
Other (income) expense, net (1)	55			739			793			(163		)	(650		)	(813		)	(166		)	(10,634		)	(11,613		)	*		*
Income Before Taxes	1,381			807			2,188			2,091			1,891			3,982			1,490			11,811			17,283			-57	%	-45	%
Income Tax Provision (Benefit)	423			119			542			360			(142		)	218			648			4,484			5,349
Net Income	958			688			1,646			1,731			2,033			3,764			842			7,327			11,934			-66	%	-56	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests	5			1			7			26			29			55			(53		)	11			14
Net Income Attributable to Merck & Co., Inc.	$	953		$	687		$	1,639		$	1,705		$	2,004		$	3,709		$	895		$	7,316		$	11,920		-66	%	-56	%
Earnings per Common Share Assuming Dilution	$	0.33		$	0.24		$	0.57		$	0.57		$	0.68		$	1.25		$	0.31		$	2.54		$	4.07		-65	%	-54	%
Average Shares Outstanding Assuming Dilution	2,865			2,850			2,856			2,971			2,949			2,957			2,911			2,880			2,928
Tax Rate	30.6		%	14.7		%	24.8		%	17.2		%	-7.5		%	5.5		%	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

SECOND QUARTER 2014

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c

				Acquisition and
				Divestiture-		Restructuring		Certain Other		Adjustment
	GAAP			Related Costs (1)		Costs (2)		Items (3)		Subtotal		Non-GAAP
Sales	$	10,934										$	10,934
Costs, Expenses and Other
Materials and production	4,893			1,724		171				1,895		2,998
Marketing and administrative	2,973			32		44				76		2,897
Research and development	1,664					43				43		1,621
Restructuring costs	163					163				163		—
Other (income) expense, net	(650		)					(741	)	(741	)	91
Income Before Taxes	1,891			(1,756	)	(421	)	741		(1,436	)	3,327
Taxes on Income	(142		)							(947	)(4)	805
Net Income	2,033									(489	)	2,522
Less: Net Income Attributable to Noncontrolling Interests	29											29
Net Income Attributable to Merck & Co., Inc.	$	2,004								(489	)	$	2,493
Earnings per Common Share Assuming Dilution	$	0.68										$	0.85
Average Shares Outstanding Assuming Dilution		2,949										2,949
Tax Rate	-7.5		%									24.2		%

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 of $1.1 billion for the amortization of intangible assets recognized as a result of mergers and acquisitions, as well as $660 million of impairment charges on product intangibles. Amounts included in marketing and administrative expenses reflect merger integration costs, as well as transaction and certain other costs related to business acquisitions and divestitures.

(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 a gain related to AstraZeneca’s option exercise.

(4) Represents the estimated tax impact on the reconciling items, including a net benefit of $517 million recorded in connection with AstraZeneca’s option exercise.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME

GAAP TO NON-GAAP RECONCILIATION

SIX MONTHS ENDED JUNE 30, 2014

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2d

				Acquisition and
				Divestiture-		Restructuring		Certain Other		Adjustment
	GAAP			Related Costs (1)		Costs (2)		Items (3)		Subtotal		Non-GAAP
Sales	$	21,198										$	21,198
Costs, Expenses and Other
Materials and production	8,796			2,850		290				3,140		5,656
Marketing and administrative	5,707			43		75				118		5,589
Research and development	3,238					94				94		3,144
Restructuring costs	288					288				288		—
Other (income) expense, net	(813		)					(741	)	(741	)	(72		)
Income Before Taxes	3,982			(2,893	)	(747	)	741		(2,899	)	6,881
Taxes on Income	218									(1,514	)(4)	1,732
Net Income	3,764									(1,385	)	5,149
Less: Net Income Attributable to Noncontrolling Interests	55											55
Net Income Attributable to Merck & Co., Inc.	$	3,709								(1,385	)	$	5,094
Earnings per Common Share Assuming Dilution	$	1.25										$	1.72
Average Shares Outstanding Assuming Dilution	2,957											2,957
Tax Rate	5.5		%									25.2		%

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 of $2.2 billion for the amortization of intangible assets recognized as a result of mergers and acquisitions, as well as $660 million of impairment charges on product intangibles. Amounts included in marketing and administrative expenses reflect merger integration costs, as well as transaction and certain other costs related to business acquisitions and divestitures.

(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 a gain related to AstraZeneca’s option exercise.

(4) Represents the estimated tax impact on the reconciling items, including a net benefit of $517 million recorded in connection with AstraZeneca’s option exercise, as well as a benefit of approximately $300 million associated with a capital loss generated in the first quarter.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SECOND QUARTER 2015

(AMOUNTS IN MILLIONS)

Table 3a

	Global					U.S.					International
	2Q 2015		2Q 2014		% Change	2Q 2015		2Q 2014		% Change	2Q 2015		2Q 2014		% Change
TOTAL SALES (1)	$	9,785	$	10,934	-11	$	4,265	$	4,429	-4	$	5,520	$	6,505	-15
PHARMACEUTICAL	8,564		9,087		-6	3,934		3,462		14	4,631		5,625		-18
Primary Care and Women’s Health
Cardiovascular
Zetia	635		717		-11	409		408			226		309		-27
Vytorin	320		417		-23	123		158		-22	197		259		-24
Diabetes
Januvia	1,044		1,058		-1	648		566		14	396		492		-20
Janumet	554		519		7	263		235		12	292		284		3
General Medicine & Women’s Health
NuvaRing	182		178		2	126		112		13	56		66		-16
Implanon / Nexplanon	124		119		4	74		67		10	50		52		-3
Dulera	120		103		17	116		98		18	5		5		-10
Follistim AQ	111		102		9	52		30		71	60		72		-17
Hospital and Specialty
Hepatitis
PegIntron	52		103		-50			8		*	52		95		-46
HIV
Isentress	375		453		-17	212		228		-7	163		225		-27
Hospital Acute Care
Cubicin(2)	293		6		*	266					27		6		*
Cancidas	134		156		-14	7		4		57	127		152		-16
Invanz	139		134		4	79		64		24	60		71		-15
Noxafil	117		98		19	50		35		43	67		63		6
Bridion	87		82		6						87		82		6
Primaxin	88		81		9	1				*	87		81		7
Immunology
Remicade	455		607		-25						455		607		-25
Simponi	169		174		-3						169		174		-3
Oncology
Emend	134		144		-7	79		78		1	55		66		-17
Keytruda	110				*	86				*	24				*
Temodar	80		93		-14	2		5		-57	78		88		-11
Diversified Brands
Respiratory
Nasonex	215		258		-16	124		141		-12	91		117		-22
Singulair	212		284		-25	10		8		19	201		275		-27
Clarinex	55		69		-20	6		5		27	49		64		-24
Other
Cozaar / Hyzaar	189		214		-12	9		8		6	180		206		-12
Arcoxia	115		141		-18						115		141		-18
Fosamax	96		121		-21	3		6		-44	93		116		-20
Zocor	63		69		-9	5		5		-7	58		63		-9
Propecia	39		58		-32	4		5		-23	35		53		-33
Vaccines
Gardasil / Gardasil 9	427		409		4	308		294		5	118		115		3
ProQuad, M-M-R II and Varivax	358		326		10	301		276		9	57		50		13
Zostavax	149		156		-4	107		116		-8	43		40		5
RotaTeq	89		147		-40	48		101		-53	41		46		-11
Pneumovax 23	106		102		4	70		85		-17	35		17		*
Other Pharmaceutical (3)	1,128		1,389		-19	346		316		9	782		1,073		-27
ANIMAL HEALTH	840		872		-4	215		185		16	625		687		-9
CONSUMER CARE (4)	0		583		*	0		406		*	0		177		*
Other Revenues (5)	381		392		-3	117		376		-69	264		16		*

* 100% or greater

(1)  Only select products are shown.

(2)  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 $76 million on a global basis for both second quarter 2015 and 2014.

(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. 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.

FRANCHISE / KEY PRODUCT SALES

JUNE YEAR-TO-DATE 2015

(AMOUNTS IN MILLIONS)

Table 3b

	Global					U.S.					International
	June YTD 15		June YTD 14		% Change	June YTD 15		June YTD 14		% Change	June YTD 15		June YTD 14		% Change
TOTAL SALES (1)	$	19,210	$	21,198	-9	$	8,218	$	8,574	-4	$	10,992	$	12,624	-13
PHARMACEUTICAL	16,830		17,538		-4	7,571		6,592		15	9,259		10,946		-15
Primary Care and Women’s Health
Cardiovascular
Zetia	1,202		1,328		-9	754		732		3	448		596		-25
Vytorin	640		777		-18	234		277		-16	406		500		-19
Diabetes
Januvia	1,928		1,916		1	1,149		1,040		10	779		876		-11
Janumet	1,063		995		7	475		448		6	589		547		8
General Medicine & Women’s Health
NuvaRing	348		346		1	238		215		11	110		131		-16
Implanon / Nexplanon	261		221		18	158		127		25	103		94		10
Dulera	251		205		22	241		194		24	10		10		-1
Follistim AQ	193		213		-9	86		64		33	107		148		-28
Hospital and Specialty
Hepatitis
PegIntron	108		216		-50			12		*	108		203		-47
HIV
Isentress	760		843		-10	399		419		-5	362		424		-15
Hospital Acute Care
Cubicin(2)	480		11		*	432					48		11		*
Cancidas	297		322		-8	13		11		16	284		311		-9
Invanz	271		249		9	146		123		18	125		125
Noxafil	228		172		32	95		55		74	133		118		13
Bridion	172		155		11						172		155		11
Primaxin	153		151		1	4		3		33	149		148
Immunology
Remicade	956		1,211		-21						956		1,211		-21
Simponi	327		330		-1						327		330		-1
Oncology
Emend	255		266		-4	157		148		6	98		118		-17
Keytruda	192				*	152				*	40				*
Temodar	155		176		-12			4		*	155		172		-10
Diversified Brands
Respiratory
Nasonex	504		570		-11	267		274		-3	237		295		-20
Singulair	457		554		-18	16		13		20	441		541		-19
Clarinex	106		131		-19	12		11		1	95		120		-21
Other
Cozaar / Hyzaar	374		419		-11	17		14		17	357		405		-12
Arcoxia	238		268		-11						238		268		-11
Fosamax	190		245		-22	6		9		-36	184		235		-22
Zocor	112		133		-16	10		10		-1	102		123		-17
Propecia	92		131		-30	8		10		-20	85		122		-30
Vaccines
Gardasil / Gardasil 9	785		792		-1	603		564		7	182		228		-20
ProQuad, M-M-R II and Varivax	705		606		16	609		517		18	96		89		8
Zostavax	324		298		9	257		245		5	67		53		25
RotaTeq	281		316		-11	205		231		-11	76		85		-10
Pneumovax 23	216		203		7	147		168		-12	69		35		97
Other Pharmaceutical (3)	2,206		2,769		-20	681		654		4	1,524		2,119		-28
ANIMAL HEALTH	1,669		1,685		-1	417		362		15	1,251		1,323		-5
CONSUMER CARE (4)	2		1,130		*	0		796		*	2		334		-99
Other Revenues (5)	709		845		-16	230		825		-72	479		20		*

* 100% or greater

(1)  Only select products are shown.

(2)  Cubicin results for the June YTD 2015 period represent sales for the five 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 $156 million and $175 million on a global basis for June YTD 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 3c

	2015									2014																		% Change	% Change
	1Q 2015			2Q 2015			June YTD			1Q 2014			2Q 2014			June YTD			3Q 2014			4Q 2014			Full Year			2Q	June YTD
TOTAL PHARMACEUTICAL	$	8,266		$	8,564		$	16,830		$	8,451		$	9,087		$	17,538		$	9,134		$	9,370		$	36,042		-6	-4
United States	3,637			3,934			7,571			3,130			3,462			6,592			3,837			3,786			14,214			14	15
% Pharmaceutical Sales	44.0		%	45.9		%	45.0		%	37.0		%	38.1		%	37.6		%	42.0		%	40.4		%	39.4		%
Europe (1)	2,024			1,896			3,920			2,478			2,537			5,015			2,297			2,269			9,581			-25	-22
% Pharmaceutical Sales	24.5		%	22.1		%	23.3		%	29.3		%	27.9		%	28.6		%	25.2		%	24.2		%	26.6		%
Japan	627			629			1,256			835			859			1,694			730			965			3,389			-27	-26
% Pharmaceutical Sales	7.6		%	7.3		%	7.5		%	9.9		%	9.5		%	9.7		%	8.0		%	10.3		%	9.4		%
Asia Pacific	809			822			1,630			809			840			1,650			878			910			3,438			-2	-1
% Pharmaceutical Sales	9.8		%	9.6		%	9.7		%	9.6		%	9.2		%	9.4		%	9.6		%	9.7		%	9.5		%
China	318			335			653			282			309			592			318			332			1,242			8	10
Latin America	630			676			1,306			538			668			1,205			673			678			2,557			1	8
% Pharmaceutical Sales	7.6		%	7.9		%	7.8		%	6.4		%	7.3		%	6.9		%	7.4		%	7.2		%	7.1		%
Eastern Europe/Middle East Africa	321			372			693			415			459			874			443			500			1,817			-19	-21
% Pharmaceutical Sales	3.9		%	4.3		%	4.1		%	4.9		%	5.1		%	5.0		%	4.9		%	5.3		%	5.0		%
Canada	170			167			337			200			218			418			218			218			854			-23	-19
% Pharmaceutical Sales	2.1		%	2.0		%	2.0		%	2.4		%	2.4		%	2.4		%	2.4		%	2.3		%	2.4		%
Other	48			68			117			46			44			90			58			44			192			55	30
% Pharmaceutical Sales	0.6		%	0.8		%	0.7		%	0.5		%	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.

SECOND QUARTER 2015

OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

OTHER (INCOME) EXPENSE, NET

							June YTD			June YTD
	2Q15			2Q14			2015			2014
INTEREST INCOME	$	(71	)	$	(59	)	$	(146	)	$	(121	)
INTEREST EXPENSE	174			188			338			376
EXCHANGE LOSSES (1)	716			20			810			53
EQUITY INCOME FROM AFFILIATES (2)	(2		)	(92		)	(147		)	(217		)
Other, net (3)	(78		)	(707		)	(62		)	(904		)
TOTAL	$	739		$	(650	)	$	793		$	(813	)

(1) Includes foreign exchange losses of $715 million in the second quarter and first six months of 2015 recorded in connection with the revaluation of the company’s net monetary assets in Venezuela.

(2) 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 $94 million and $192 million in the second quarter and first six months of 2014, respectively.

(3) Other, net in the second quarter and first six months of 2014 includes a $741 million gain on AstraZeneca’s option exercise.