Exhibit 99.2
MERCK & CO., INC.
CONSOLIDATED STATEMENT OF INCOME - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1a
|
| 2016 |
| 2015 |
| % Change |
| ||||||||||||||
|
| 1Q |
| 1Q |
| 2Q |
| 3Q |
| 4Q |
| Dec YTD |
| 1Q |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Sales |
| $ | 9,312 |
| $ | 9,425 |
| $ | 9,785 |
| $ | 10,073 |
| $ | 10,215 |
| $ | 39,498 |
| -1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Costs, Expenses and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Materials and production |
| 3,572 |
| 3,569 |
| 3,754 |
| 3,761 |
| 3,850 |
| 14,934 |
| — |
| ||||||
Marketing and administrative |
| 2,318 |
| 2,601 |
| 2,624 |
| 2,472 |
| 2,615 |
| 10,313 |
| -11 | % | ||||||
Research and development |
| 1,659 |
| 1,737 |
| 1,670 |
| 1,500 |
| 1,797 |
| 6,704 |
| -4 | % | ||||||
Restructuring costs |
| 91 |
| 82 |
| 191 |
| 113 |
| 233 |
| 619 |
| 11 | % | ||||||
Other (income) expense, net |
| 48 |
| 55 |
| 739 |
| (170 | ) | 905 |
| 1,527 |
| -13 | % | ||||||
Income Before Taxes |
| 1,624 |
| 1,381 |
| 807 |
| 2,397 |
| 815 |
| 5,401 |
| 18 | % | ||||||
Income Tax Provision (Benefit) |
| 494 |
| 423 |
| 119 |
| 566 |
| (166 | ) | 942 |
|
|
| ||||||
Net Income |
| 1,130 |
| 958 |
| 688 |
| 1,831 |
| 981 |
| 4,459 |
| 18 | % | ||||||
Less: Net Income Attributable to Noncontrolling Interests |
| 5 |
| 5 |
| 1 |
| 5 |
| 5 |
| 17 |
|
|
| ||||||
Net Income Attributable to Merck & Co., Inc. |
| $ | 1,125 |
| $ | 953 |
| $ | 687 |
| $ | 1,826 |
| $ | 976 |
| $ | 4,442 |
| 18 | % |
Earnings per Common Share Assuming Dilution |
| $ | 0.40 |
| $ | 0.33 |
| $ | 0.24 |
| $ | 0.64 |
| $ | 0.35 |
| $ | 1.56 |
| 21 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Average Shares Outstanding Assuming Dilution |
| 2,795 |
| 2,865 |
| 2,850 |
| 2,836 |
| 2,813 |
| 2,841 |
|
|
| ||||||
Tax Rate |
| 30.4 | % | 30.6 | % | 14.7 | % | 23.6 | % | -20.4 | % | 17.4 | % |
|
|
Sum of quarterly amounts may not equal year-to-date amounts due to rounding.
MERCK & CO., INC.
CONSOLIDATED STATEMENT OF INCOME
GAAP TO NON-GAAP RECONCILIATION
FIRST QUARTER 2015
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 2b
|
| GAAP |
| Acquisition and |
| Restructuring |
| Adjustment |
| Non-GAAP |
| ||
Sales |
| $ | 9,425 |
|
|
|
|
|
|
| $ | 9,425 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Costs, Expenses and Other |
|
|
|
|
|
|
|
|
|
|
| ||
Materials and production |
| 3,569 |
| 1,250 |
| 105 |
| 1,355 |
| 2,214 |
| ||
Marketing and administrative |
| 2,601 |
| 227 |
| 36 |
| 263 |
| 2,338 |
| ||
Research and development |
| 1,737 |
| 63 |
| 2 |
| 65 |
| 1,672 |
| ||
Restructuring costs |
| 82 |
|
|
| 82 |
| 82 |
| — |
| ||
Other (income) expense, net |
| 55 |
| (14 | ) |
|
| (14 | ) | 69 |
| ||
Income Before Taxes |
| 1,381 |
| (1,526 | ) | (225 | ) | (1,751 | ) | 3,132 |
| ||
Taxes on Income |
| 423 |
|
|
|
|
| (278 | )(3) | 701 |
| ||
Net Income |
| 958 |
|
|
|
|
| (1,473 | ) | 2,431 |
| ||
Less: Net Income Attributable to Noncontrolling Interests |
| 5 |
|
|
|
|
|
|
| 5 |
| ||
Net Income Attributable to Merck & Co., Inc. |
| $ | 953 |
|
|
|
|
| (1,473 | ) | $ | 2,426 |
|
Earnings per Common Share Assuming Dilution |
| $ | 0.33 |
|
|
|
|
|
|
| $ | 0.85 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Average Shares Outstanding Assuming Dilution |
| 2,865 |
|
|
|
|
|
|
| 2,865 |
| ||
Tax Rate |
| 30.6 | % |
|
|
|
|
|
| 22.4 | % |
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 $1.2 billion of expenses for the amortization of intangible assets recognized as a result of acquisitions, as well as $20 million of amortization of purchase accounting adjustments to inventories as a result of the Cubist Pharmaceuticals, Inc. acquisition. Amounts included in marketing and administrative expenses reflect integration, transaction and certain other costs related to business acquisitions, including severance costs which are not part of the company’s formal restructuring programs, as well as transaction and certain other costs related to divestitures. Amounts included in research and development expenses reflect $61 million of charges to increase the fair value of liabilities for contingent consideration, as well as $2 million of 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 activities under the company’s formal restructuring programs.
(3) Represents the estimated tax impact on the reconciling items.
MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES
FIRST QUARTER 2016
(AMOUNTS IN MILLIONS)
Table 3a
|
| Global |
| U.S. |
| International |
| ||||||||||||||||||
|
| 1Q 2016 |
| 1Q 2015 |
| % Change |
| 1Q 2016 |
| 1Q 2015 |
| % Change |
| 1Q 2016 |
| 1Q 2015 |
| % Change |
| ||||||
TOTAL SALES (1) |
| $ | 9,312 |
| $ | 9,425 |
| -1 |
| $ | 4,222 |
| $ | 3,953 |
| 7 |
| $ | 5,090 |
| $ | 5,472 |
| -7 |
|
PHARMACEUTICAL |
| 8,104 |
| 8,266 |
| -2 |
| 3,913 |
| 3,637 |
| 8 |
| 4,191 |
| 4,629 |
| -9 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Primary Care and Women’s Health |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Zetia |
| 612 |
| 568 |
| 8 |
| 386 |
| 345 |
| 12 |
| 226 |
| 223 |
| 2 |
| ||||||
Vytorin |
| 277 |
| 320 |
| -13 |
| 109 |
| 111 |
| -1 |
| 168 |
| 209 |
| -20 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diabetes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Januvia |
| 906 |
| 884 |
| 2 |
| 549 |
| 501 |
| 10 |
| 357 |
| 383 |
| -7 |
| ||||||
Janumet |
| 506 |
| 509 |
| -1 |
| 226 |
| 212 |
| 7 |
| 280 |
| 297 |
| -6 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
General Medicine & Women’s Health |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
NuvaRing |
| 175 |
| 166 |
| 6 |
| 128 |
| 112 |
| 14 |
| 48 |
| 54 |
| -11 |
| ||||||
Implanon / Nexplanon |
| 134 |
| 137 |
| -2 |
| 99 |
| 84 |
| 18 |
| 35 |
| 53 |
| -34 |
| ||||||
Dulera |
| 113 |
| 130 |
| -13 |
| 107 |
| 125 |
| -14 |
| 6 |
| 5 |
| 11 |
| ||||||
Follistim AQ |
| 94 |
| 82 |
| 16 |
| 53 |
| 34 |
| 55 |
| 42 |
| 47 |
| -13 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hospital and Specialty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hepatitis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Zepatier |
| 50 |
|
|
| * |
| 49 |
|
|
| * |
| 1 |
|
|
| * |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
HIV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Isentress |
| 340 |
| 385 |
| -12 |
| 162 |
| 187 |
| -13 |
| 178 |
| 198 |
| -11 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Hospital Acute Care |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cubicin(2) |
| 292 |
| 187 |
| 56 |
| 255 |
| 166 |
| 54 |
| 37 |
| 21 |
| 74 |
| ||||||
Noxafil |
| 145 |
| 111 |
| 31 |
| 71 |
| 45 |
| 57 |
| 74 |
| 66 |
| 13 |
| ||||||
Cancidas |
| 133 |
| 163 |
| -19 |
| 4 |
| 6 |
| -34 |
| 128 |
| 157 |
| -18 |
| ||||||
Invanz |
| 114 |
| 132 |
| -14 |
| 65 |
| 67 |
| -2 |
| 49 |
| 65 |
| -25 |
| ||||||
Bridion |
| 90 |
| 85 |
| 6 |
| 5 |
|
|
| * |
| 86 |
| 85 |
| 1 |
| ||||||
Primaxin |
| 73 |
| 65 |
| 13 |
| 1 |
| 3 |
| -73 |
| 73 |
| 62 |
| 17 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Immunology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Remicade |
| 349 |
| 501 |
| -30 |
|
|
|
|
|
|
| 349 |
| 501 |
| -30 |
| ||||||
Simponi |
| 188 |
| 158 |
| 19 |
|
|
|
|
|
|
| 188 |
| 158 |
| 19 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Oncology |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Keytruda |
| 249 |
| 83 |
| * |
| 133 |
| 66 |
| * |
| 116 |
| 16 |
| * |
| ||||||
Emend |
| 126 |
| 122 |
| 3 |
| 82 |
| 78 |
| 4 |
| 44 |
| 43 |
| 1 |
| ||||||
Temodar |
| 66 |
| 74 |
| -12 |
| 4 |
|
|
| * |
| 62 |
| 74 |
| -17 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Diversified Brands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Respiratory |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Singulair |
| 237 |
| 245 |
| -3 |
| 17 |
| 6 |
| * |
| 220 |
| 240 |
| -8 |
| ||||||
Nasonex |
| 229 |
| 289 |
| -21 |
| 112 |
| 143 |
| -22 |
| 117 |
| 146 |
| -20 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cozaar / Hyzaar |
| 126 |
| 185 |
| -32 |
| 6 |
| 8 |
| -25 |
| 121 |
| 177 |
| -32 |
| ||||||
Arcoxia |
| 111 |
| 123 |
| -10 |
|
|
|
|
|
|
| 111 |
| 123 |
| -10 |
| ||||||
Fosamax |
| 75 |
| 94 |
| -20 |
| 1 |
| 3 |
| -76 |
| 74 |
| 91 |
| -19 |
| ||||||
Zocor |
| 46 |
| 49 |
| -7 |
| 4 |
| 5 |
| -28 |
| 42 |
| 44 |
| -4 |
| ||||||
Vaccines |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Gardasil / Gardasil 9 |
| 378 |
| 359 |
| 5 |
| 320 |
| 295 |
| 8 |
| 58 |
| 64 |
| -9 |
| ||||||
ProQuad, M-M-R II and Varivax |
| 357 |
| 348 |
| 3 |
| 310 |
| 308 |
| 1 |
| 47 |
| 40 |
| 19 |
| ||||||
RotaTeq |
| 188 |
| 192 |
| -2 |
| 149 |
| 157 |
| -5 |
| 39 |
| 35 |
| 11 |
| ||||||
Zostavax |
| 125 |
| 175 |
| -28 |
| 109 |
| 151 |
| -28 |
| 16 |
| 24 |
| -33 |
| ||||||
Pneumovax 23 |
| 107 |
| 110 |
| -3 |
| 67 |
| 77 |
| -13 |
| 40 |
| 33 |
| 21 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other Pharmaceutical (3) |
| 1,093 |
| 1,235 |
| -12 |
| 330 |
| 342 |
| -4 |
| 759 |
| 895 |
| -15 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
ANIMAL HEALTH |
| 829 |
| 829 |
|
|
| 233 |
| 203 |
| 15 |
| 596 |
| 626 |
| -5 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other Revenues (4) |
| 379 |
| 330 |
| 15 |
| 76 |
| 113 |
| -33 |
| 303 |
| 217 |
| 40 |
| ||||||
* 100% or greater
(1) Only select products are shown.
(2) First quarter of 2015 reflects approximately two months of sales following the acquisition of Cubist Pharmaceuticals, Inc. by Merck on Jan. 21, 2015. Percentages reflect comparison to full quarter of sales in 2016.
(3) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $103 million and $78 million on a global basis for first quarter 2016 and 2015, respectively.
(4) Other revenues are comprised primarily of alliance revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.
MERCK & CO., INC.
PHARMACEUTICAL GEOGRAPHIC SALES
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3b
|
| 2016 |
| 2015 |
| % Change |
| ||||||||||||||
|
| 1Q |
| 1Q |
| 2Q |
| 3Q |
| 4Q |
| Full Year |
| 1Q |
| ||||||
TOTAL PHARMACEUTICAL |
| $ | 8,104 |
| $ | 8,266 |
| $ | 8,564 |
| $ | 8,925 |
| $ | 9,027 |
| $ | 34,782 |
| -2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
United States |
| 3,913 |
| 3,637 |
| 3,934 |
| 4,382 |
| 4,285 |
| 16,238 |
| 8 |
| ||||||
% Pharmaceutical Sales |
| 48.3 | % | 44.0 | % | 45.9 | % | 49.1 | % | 47.5 | % | 46.7 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Europe (1) |
| 1,914 |
| 2,024 |
| 1,896 |
| 1,920 |
| 1,873 |
| 7,714 |
| -5 |
| ||||||
% Pharmaceutical Sales |
| 23.6 | % | 24.5 | % | 22.1 | % | 21.5 | % | 20.8 | % | 22.2 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Japan |
| 620 |
| 627 |
| 629 |
| 564 |
| 785 |
| 2,605 |
| -1 |
| ||||||
% Pharmaceutical Sales |
| 7.7 | % | 7.6 | % | 7.3 | % | 6.3 | % | 8.7 | % | 7.5 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Asia Pacific |
| 806 |
| 809 |
| 822 |
| 854 |
| 946 |
| 3,431 |
| 0 |
| ||||||
% Pharmaceutical Sales |
| 9.9 | % | 9.8 | % | 9.6 | % | 9.6 | % | 10.5 | % | 9.9 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
China |
| 337 |
| 318 |
| 335 |
| 353 |
| 339 |
| 1,344 |
| 6 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Latin America |
| 359 |
| 630 |
| 676 |
| 585 |
| 512 |
| 2,403 |
| -43 |
| ||||||
% Pharmaceutical Sales |
| 4.4 | % | 7.6 | % | 7.9 | % | 6.5 | % | 5.7 | % | 6.9 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Eastern Europe/Middle East Africa |
| 272 |
| 321 |
| 372 |
| 380 |
| 402 |
| 1,476 |
| -15 |
| ||||||
% Pharmaceutical Sales |
| 3.4 | % | 3.9 | % | 4.3 | % | 4.3 | % | 4.5 | % | 4.2 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Canada |
| 147 |
| 170 |
| 167 |
| 159 |
| 172 |
| 668 |
| -13 |
| ||||||
% Pharmaceutical Sales |
| 1.8 | % | 2.1 | % | 2.0 | % | 1.8 | % | 1.9 | % | 1.9 | % |
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other |
| 73 |
| 48 |
| 68 |
| 81 |
| 52 |
| 247 |
| 52 |
| ||||||
% Pharmaceutical Sales |
| 0.9 | % | 0.6 | % | 0.8 | % | 0.9 | % | 0.6 | % | 0.7 | % |
|
| ||||||
(1) Europe primarily represents all European Union countries and the European Union accession markets.
MERCK & CO., INC.
FIRST QUARTER 2016
OTHER (INCOME) EXPENSE, NET - GAAP
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 4
|
OTHER (INCOME) EXPENSE, NET
|
| 1Q16 |
| 1Q15 |
| ||
INTEREST INCOME |
| $ | (79 | ) | $ | (74 | ) |
INTEREST EXPENSE |
| 172 |
| 164 |
| ||
EXCHANGE LOSSES |
| 38 |
| 95 |
| ||
EQUITY INCOME FROM AFFILIATES |
| (34 | ) | (145 | ) | ||
Other, net |
| (49 | ) | 15 |
| ||
TOTAL |
| $ | 48 |
| $ | 55 |
|