Merck & Co. 8K Merck Announces First-Quarter 2021 Financial Results | MRK 29 Apr 21

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			1Q			2Q			3Q			4Q			Full Year			1Q
Sales	$	12,080		$	12,057		$	10,872		$	12,551		$	12,514		$	47,994			0	%

Costs, Expenses and Other
Cost of sales		3,670			3,312			3,159			3,481			5,532			15,485			11	%
Selling, general and administrative		2,633			2,555			2,378			2,450			3,086			10,468			3	%
Research and development		2,465			2,209			2,123			3,390			5,838			13,558			12	%
Restructuring costs		298			72			83			114			309			578			*
Other (income) expense, net		(448	)		71			(390	)		(312	)		(258	)		(886	)		*
Income (Loss) Before Taxes		3,462			3,838			3,519			3,428			(1,993	)		8,791			-10	%
Taxes on Income		276			619			509			483			99			1,709
Net Income (Loss)		3,186			3,219			3,010			2,945			(2,092	)		7,082			-1	%
Less: Net Income Attributable to Noncontrolling Interests		7			-			8			4			2			15
Net Income (Loss) Attributable to Merck & Co., Inc.	$	3,179		$	3,219		$	3,002		$	2,941		$	(2,094	)	$	7,067			-1	%
Earnings (Loss) per Common Share Assuming Dilution ⁽¹⁾	$	1.25		$	1.26		$	1.18		$	1.16		$	(0.83	)	$	2.78			-1	%

Average Shares Outstanding Assuming Dilution ⁽¹⁾		2,541			2,547			2,536			2,538			2,530			2,541
Tax Rate		8.0	%		16.1	%		14.5	%		14.1	%		-5.0	%		19.4	%

* 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.

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATION*

FIRST QUARTER 2020

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

	GAAP			Acquisition and Divestiture-Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			(Income) Loss from Investments in Equity Securities			Adjustment Subtotal			Non-GAAP
Cost of sales	$	3,312			407			68						475		$	2,837
Selling, general and administrative		2,555			278			11						289			2,266
Research and development		2,209			40			17						57			2,152
Restructuring costs		72						72						72			-
Other (income) expense, net		71			(11	)					(87	)		(98	)		169
Income Before Taxes		3,838			(714	)		(168	)		87			(795	)		4,633
Income Tax Provision (Benefit)		619			(175	)⁽³⁾		(7	)⁽³⁾		19	⁽³⁾		(163	)		782
Net Income		3,219			(539	)		(161	)		68			(632	)		3,851
Net Income Attributable to Merck & Co., Inc.		3,219			(539	)		(161	)		68			(632	)		3,851
Earnings per Common Share Assuming Dilution	$	1.26			(0.21	)		(0.06	)		0.02			(0.25	)	$	1.51

Tax Rate		16.1	%														17.0	%

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.

*As previously disclosed, beginning in 2021, the Company has changed the treatment of certain items for purposes of its non-GAAP reporting. Historically, Merck’s non-GAAP results excluded the amortization of intangible assets recognized in connection with business acquisitions, but did not exclude the amortization of intangibles originating from collaborations, asset acquisitions or licensing arrangements. In 2021, Merck’s non-GAAP results no longer differentiate between the nature of intangibles amortization and exclude all amortization of intangible assets. Also, beginning in 2021, Merck’s non-GAAP results exclude realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. These amounts are difficult to predict and can fluctuate significantly period to period affecting comparability of results. Non-GAAP results for the comparable periods of 2020 have been recast to conform to the new presentation.

⁽¹⁾Amount included in cost of sales primarily reflects expenses for the amortization of intangible assets. Amount included in selling, general and administrative expenses reflects approximately $165 million of expenses related to the company's planned spin-off of Organon & Co., approximately $95 million of costs related to the acquisition of ArQule, Inc., and other acquisition and divestiture-related costs. Amount included in research and development expenses primarily reflects expenses related to a net increase in the estimated fair value measurement of liabilities for contingent consideration. Amount included in other (income) expense, net, primarily reflects royalty income, partially offset by an increase in the estimated fair value measurement of liabilities for contingent consideration 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⁾ Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

FIRST QUARTER 2021

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global							U.S.								International
	1Q 2021			1Q 2020		% Change		1Q 2021			1Q 2020			% Change		1Q 2021			1Q 2020		% Change
TOTAL SALES ⁽¹⁾	$	12,080		$	12,057		-	$	5,136		$	5,137			-	$	6,943		$	6,920		-
PHARMACEUTICAL		10,675			10,655		-		4,641			4,714			-2		6,034			5,941		2
Oncology
Keytruda		3,899			3,284		19		2,181			1,906			14		1,718			1,378		25
Alliance Revenue - Lynparza ⁽²⁾		228			145		57		118			85			39		110			60		81
Alliance Revenue - Lenvima ⁽²⁾		130			128		1		85			90			-5		44			38		17
Vaccines ⁽³⁾
Gardasil / Gardasil 9		917			1,097		-16		313			461			-32		604			636		-5
ProQuad / M-M-R II / Varivax		449			435		3		333			333			-		117			102		14
Pneumovax 23		171			256		-33		73			182			-60		99			75		32
RotaTeq		158			222		-29		118			140			-16		41			82		-50
Vaqta		34			60		-43		25			30			-17		9			30		-70
Hospital Acute Care
Bridion		340			299		14		167			143			17		173			157		10
Prevymis		82			60		37		35			26			33		47			33		41
Noxafil		67			94		-29		15			8			96		52			87		-40
Primaxin		65			51		26								-97		65			51		27
Cancidas		57			55		4		3			3			-4		55			52		5
Invanz		57			64		-12		4			6			-26		52			59		-11
Zerbaxa		(8	)		37		-121		(2	)		20			-110		(6	)		16		-135
Immunology
Simponi		214			215		-										214			215		-
Remicade		85			88		-3										85			88		-3
Neuroscience
Belsomra		79			79		-		18			27			-33		61			53		17
Virology
Isentress / Isentress HD		209			245		-15		71			75			-6		138			170		-19
Cardiovascular
Zetia		92			145		-37		2			(2	)		-199		90			147		-39
Vytorin		41			53		-23		2			3			-29		38			50		-23
Atozet		112			122		-9										112			122		-9
Alliance Revenue - Adempas ⁽⁴⁾		74			53		38		68			49			40		6			5		22
Adempas ⁽⁵⁾		55			56		-2										55			56		-2
Diabetes ⁽⁶⁾
Januvia		809			774		5		348			355			-2		461			419		10
Janumet		486			503		-3		84			113			-26		401			390		3
Women's Health
Implanon / Nexplanon		183			195		-6		141			149			-6		42			45		-6
NuvaRing		45			63		-28		21			26			-20		24			37		-34
Diversified Brands
Singulair		107			155		-31		4			5			-8		102			151		-32
Cozaar / Hyzaar		90			102		-12		3			7			-56		87			95		-8
Arcoxia		56			70		-20										56			70		-20
Follistim AQ		52			41		25		25			21			23		27			21		28
Nasonex		43			71		-39		2			6			-65		41			65		-37
Other Pharmaceutical ⁽⁷⁾		1,197			1,338		-11		384			447			-14		814			886		-8

ANIMAL HEALTH		1,418			1,214		17		437			384			14		981			830		18
Livestock		819			739		11		157			162			-3		662			577		15
Companion Animals		599			475		26		280			222			26		319			253		26

Other Revenues ⁽⁸⁾		(13	)		188		-107		58			39			51		(72	)		149		-149

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 $1,809 million and $2,155 million on a global basis in the first quarter of 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 $1,363 million and $1,353 million on a global basis in the first quarter of 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.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	2021			2020															% Change
	1Q			1Q			2Q			3Q			4Q			Full Year			1Q
TOTAL PHARMACEUTICAL	$	10,675		$	10,655		$	9,679		$	11,320		$	11,367		$	43,021			-

United States		4,641			4,714			4,270			5,218			5,247			19,449			-2
% Pharmaceutical Sales		43.5	%		44.2	%		44.1	%		46.1	%		46.2	%		45.2	%
Europe ⁽¹⁾		2,663			2,543			2,196			2,549			2,709			9,997			5
% Pharmaceutical Sales		24.9	%		23.9	%		22.7	%		22.5	%		23.8	%		23.2	%
China		894			846			811			990			888			3,534			6
% Pharmaceutical Sales		8.4	%		7.9	%		8.4	%		8.7	%		7.8	%		8.2	%
Japan		708			789			847			805			847			3,288			-10
% Pharmaceutical Sales		6.6	%		7.4	%		8.8	%		7.1	%		7.5	%		7.6	%
Asia Pacific (other than China and Japan)		614			613			555			601			603			2,372			-
% Pharmaceutical Sales		5.8	%		5.8	%		5.7	%		5.3	%		5.3	%		5.5	%
Eastern Europe/Middle East/Africa		463			490			416			419			365			1,689			-5
% Pharmaceutical Sales		4.3	%		4.6	%		4.3	%		3.7	%		3.2	%		3.9	%
Latin America		422			419			399			477			474			1,768			1
% Pharmaceutical Sales		4.0	%		3.9	%		4.1	%		4.2	%		4.2	%		4.1	%
Canada		203			212			160			216			194			782			-4
% Pharmaceutical Sales		1.9	%		2.0	%		1.7	%		1.9	%		1.7	%		1.8	%
Other		67			29			25			45			40			142			131
% Pharmaceutical Sales		0.6	%		0.3	%		0.3	%		0.4	%		0.4	%		0.3	%

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

⁽¹⁾ Europe primarily 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

		1Q21			1Q20
Interest income	$	(11	)	$	(25	)
Interest expense		200			212
Exchange losses		47			54
Income from investments in equity securities, net ⁽¹⁾		(574	)		(52	)
Net periodic defined benefit plan (credit) cost other than service cost		(89	)		(90	)
Other, net		(21	)		(28	)
Total	$	(448	)	$	71

⁽¹⁾Includes 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.

Merck & Co. (MRK) 8-KMerck Announces First-Quarter 2021 Financial Results