Merck & Co. (MRK) 8-K Merck Announces First-Quarter 2024 Financial Results

Exhibit 99.2 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

	2024			2023															% Change
	1Q			1Q			2Q			3Q			4Q			Full Year			1Q
Sales	$	15,775		$	14,487		$	15,035		$	15,962		$	14,630		$	60,115			9	%
Costs, Expenses and Other
Cost of sales		3,540			3,926			4,024			4,264			3,911			16,126			-10	%
Selling, general and administrative		2,483			2,479			2,702			2,519			2,804			10,504			0	%
Research and development		3,992			4,276			13,321			3,307			9,628			30,531			-7	%
Restructuring costs		123			67			151			126			255			599			84	%
Other (income) expense, net		(33	)		89			172			126			78			466			*
Income (Loss) Before Taxes		5,670			3,650			(5,335	)		5,620			(2,046	)		1,889			55	%
Income Tax Provision (Benefit)		903			825			637			870			(821	)		1,512
Net Income (Loss)		4,767			2,825			(5,972	)		4,750			(1,225	)		377			69	%
Less: Net Income Attributable to Noncontrolling Interests		5			4			3			5			1			12
Net Income (Loss) Attributable to Merck & Co., Inc.	$	4,762		$	2,821		$	(5,975	)	$	4,745		$	(1,226	)	$	365			69	%
Earnings (Loss) per Common Share Assuming Dilution (1)	$	1.87		$	1.11		$	(2.35	)	$	1.86		$	(0.48	)	$	0.14			68	%
Average Shares Outstanding Assuming Dilution (1)		2,544			2,551			2,539			2,546			2,533			2,547
Tax Rate		15.9	%		22.6	%		-11.9	%		15.5	%		40.1	%		80.0	%

* 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 second and fourth quarters of 2023, 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.

FIRST QUARTER 2023 GAAP TO NON-GAAP RECONCILIATION

(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		Certain Other Items		Adjustment Subtotal		Non-GAAP
First Quarter
Cost of sales	$	3,926		545		29						574		$	3,352
Selling, general and administrative		2,479		20		1						21			2,458
Research and development		4,276		10								10			4,266
Restructuring costs		67				67						67			-
Other (income) expense, net		89		15				(429	)	573	(3)	159			(70	)
Income Before Taxes		3,650		(590	)	(97	)	429		(573	)	(831	)		4,481
Income Tax Provision (Benefit)		825		(105	)(4)	(18	)(4)	95	(4)	(60	)(4)	(88	)		913
Net Income		2,825		(485	)	(79	)	334		(513	)	(743	)		3,568
Net Income Attributable to Merck & Co., Inc.		2,821		(485	)	(79	)	334		(513	)	(743	)		3,564
Earnings per Common Share Assuming Dilution	$	1.11		(0.19	)	(0.03	)	0.13		(0.20	)	(0.29	)	$	1.40
Tax Rate		22.6	%												20.4	%

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 non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

⁽¹⁾ Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts included in research and development expenses primarily reflect the amortization of intangible assets. Amounts included in other (income) expense, net, reflect a $37 million loss on the sale of a business and an increase in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture, partially offset by royalty income.  

⁽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⁾ Reflects a charge related to settlements with certain plaintiffs in the Zetia antitrust litigation.

⁽⁴⁾ Represents the estimated tax impacts 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 2024

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global						U.S.						International
	1Q 2024		1Q 2023		% Change		1Q 2024		1Q 2023		% Change		1Q 2024		1Q 2023		% Change
TOTAL SALES (1)	$	15,775	$	14,487		9	$	7,478	$	6,659		12	$	8,297	$	7,828		6
PHARMACEUTICAL		14,006		12,721		10		6,936		6,117		13		7,070		6,604		7
Oncology
Keytruda		6,947		5,795		20		4,119		3,485		18		2,828		2,310		22
Alliance Revenue – Lynparza (2)		292		275		6		135		142		-4		157		133		18
Alliance Revenue – Lenvima (2)		255		232		10		173		153		13		82		79		3
Welireg		85		42		102		77		41		89		7		1		*
Alliance Revenue – Reblozyl (3)		71		43		66		58		30		93		12		12		-
Vaccines (4)
Gardasil/Gardasil 9		2,249		1,972		14		488		416		17		1,761		1,556		13
ProQuad/M-M-R II/Varivax		570		528		8		438		421		4		133		107		24
Vaxneuvance		219		106		106		161		94		72		58		13		*
RotaTeq		216		297		-27		149		180		-17		67		117		-43
Pneumovax 23		61		96		-36		6		40		-85		55		56		-1
Hospital Acute Care
Bridion		440		487		-10		329		276		19		111		210		-47
Prevymis		174		129		35		74		54		37		100		75		33
Dificid		73		65		12		68		62		10		5		3		49
Zerbaxa		56		50		13		33		27		23		23		23		1
Noxafil		56		60		-7		8		14		-43		48		46		4
Cardiovascular
Alliance Revenue - Adempas/Verquvo (5)		98		99		-1		90		83		8		8		16		-51
Adempas (6)		70		59		18								70		59		18
Virology
Lagevrio		350		392		-11		45		-2		*		305		394		-23
Isentress/Isentress HD		111		123		-10		50		52		-3		61		71		-14
Delstrigo		56		44		28		12		11		9		44		33		34
Pifeltro		42		34		23		29		24		22		13		10		25
Neuroscience
Belsomra		46		56		-17		15		16		-9		32		40		-21
Immunology
Simponi		184		180		2								184		180		2
Remicade		39		51		-24								39		51		-24
Diabetes (7)
Januvia		419		551		-24		183		271		-32		236		280		-16
Janumet		251		329		-24		39		56		-32		212		272		-22
Other Pharmaceutical (8)		576		626		-8		157		171		-8		419		457		-8
ANIMAL HEALTH		1,511		1,491		1		474		482		-2		1,037		1,010		3
Livestock		850		849		-		166		174		-5		683		676		1
Companion Animal		661		642		3		308		308		-		354		334		6
Other Revenues (9)		258		275		-6		68		60		13		190		214		-11

*200% or greater

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⁾ Alliance Revenue represents royalties.

⁽⁴⁾ Total Vaccines sales were $3,424 million in the first quarter of 2024 and $3,133 million in the first quarter 2023.

⁽⁵⁾ 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.

⁽⁶⁾ Net product sales in Merck's marketing territories.

⁽⁷⁾ Total Diabetes sales were $745 million in the first quarter of 2024 and $950 million in the first quarter of 2023.

⁽⁸⁾ Includes Pharmaceutical products not individually shown above.

⁽⁹⁾ Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $61 million in the first quarter of 2024 and $51 million in the first quarter of 2023.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	2024			2023															% Change
	1Q			1Q			2Q			3Q			4Q			Full Year			1Q
TOTAL PHARMACEUTICAL	$	14,006		$	12,721		$	13,457		$	14,263		$	13,141		$	53,583			10
United States		6,936			6,117			6,570			7,153			6,698			26,539			13
% Pharmaceutical Sales		49.5	%		48.1	%		48.8	%		50.1	%		51.0	%		49.5	%
Europe (1)		2,555			2,326			2,401			2,497			2,491			9,715			10
% Pharmaceutical Sales		18.2	%		18.3	%		17.8	%		17.5	%		19.0	%		18.1	%
China		1,744			1,694			1,887			1,674			1,456			6,710			3
% Pharmaceutical Sales		12.5	%		13.3	%		14.0	%		11.7	%		11.1	%		12.5	%
Japan		802			737			652			1,062			629			3,081			9
% Pharmaceutical Sales		5.7	%		5.8	%		4.8	%		7.4	%		4.8	%		5.7	%
Latin America		601			470			566			696			596			2,328			28
% Pharmaceutical Sales		4.3	%		3.7	%		4.2	%		4.9	%		4.5	%		4.3	%
Asia Pacific (other than China and Japan)		580			703			705			636			616			2,661			-18
% Pharmaceutical Sales		4.1	%		5.5	%		5.2	%		4.5	%		4.7	%		5.0	%
Eastern Europe/Middle East/Africa		395			381			370			301			299			1,351			3
% Pharmaceutical Sales		2.8	%		3.0	%		2.7	%		2.1	%		2.3	%		2.5	%
Canada		138			141			127			133			138			540			-2
% Pharmaceutical Sales		1.0	%		1.1	%		0.9	%		0.9	%		1.1	%		1.0	%
Other		255			152			179			111			218			658			68
% Pharmaceutical Sales		1.9	%		1.2	%		1.6	%		0.9	%		1.5	%		1.4	%

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

⁽¹⁾ Europe 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

		1Q24			1Q23
Interest income	$	(73	)	$	(112	)
Interest expense		303			242
Exchange losses		83			61
Income from investments in equity securities, net (1)		(143	)		(450	)
Net periodic defined benefit plan (credit) cost other than service cost		(160	)		(115	)
Other, net		(43	)		463
Total	$	(33	)	$	89

⁽¹⁾ Includes net 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 gains and losses from ownership interests in investment funds are accounted for on a one quarter lag.