Merck & Co., Inc. - FORM 8-K - EX-99.2 - CERTAIN SUPPLEMENTAL INFORMATION

Attached files

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8-K - FORM 8-K - Merck & Co., Inc.	d248171d8k.htm
EX-99.1 - PRESS RELEASE - Merck & Co., Inc.	d248171dex991.htm

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

THIRD QUARTER 2010

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c


	GAAP			Acquisition- Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items ⁽³⁾			Adjustment Subtotal			Non-GAAP

Sales	$	11,125											$	—		$	11,125
Materials and production		4,191			1,351			44						1,395			2,796
Marketing and administrative		3,192			64			130						194			2,998
Research and development		2,322			189			163						352			1,970
Restructuring costs		50						50						50			—
Equity income from affiliates		(236	)											—			(236	)
Other (income) expense, net		1,108									950			950			158
Income Before Taxes		498			(1,604	)		(387	)		(950	)		(2,941	)		3,439
Taxes on Income		126												(638	) ⁽⁴⁾		764
Net Income		372												(2,303	)		2,675
Less: Net Income Attributable to Noncontrolling Interests		30												—			30
Net Income Attributable to Merck & Co., Inc.	$	342											$	(2,303	)	$	2,645
Earnings per Common Share Assuming Dilution	$	0.11														$	0.85	⁽⁵⁾

Average Shares Outstanding Assuming Dilution		3,102															3,102
Tax Rate		25.3	%														22.2	%

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 for the amortization of intangible assets and the amortization of purchase accounting adjustments to inventories recognized as a result of the merger. Amounts included in marketing and administrative expenses reflect transaction and integration costs associated with mergers and acquisitions. Amounts included in research and development expense 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 sold or closed related to actions under the company’s formal restructuring programs.

(3)	Included in other (income) expense, net is a $950 million legal reserve.

(4)	Includes a $380 million tax benefit from changes in a foreign entity’s tax rate, as well as the estimated tax impact on the reconciling items.

(5)

The company calculates earnings per share pursuant to the two-class method which requires the allocation of net income between common shareholders and participating security holders. Net income attributable to Merck & Co., Inc. common shareholders used to calculate non-GAAP earnings per common share assuming dilution was $2,635 million for the third quarter of 2010.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

NINE MONTHS ENDED SEPTEMBER 30, 2010

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2d


	GAAP			Acquisition- Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items ⁽³⁾			Adjustment Subtotal			Non-GAAP

Sales	$	33,893											$	—		$	33,893
Materials and production		13,956			5,360			325						5,685			8,271
Marketing and administrative		9,589			219			130						349			9,240
Research and development		6,552			216			313						529			6,023
Restructuring costs		864						864						864			—
Equity income from affiliates		(417	)											—			(417	)
Other (income) expense, net		995			17						507			524			471
Income Before Taxes		2,354			(5,812	)		(1,632	)		(507	)		(7,951	)		10,305
Taxes on Income		872												(1,384	) ⁽⁴⁾		2,256
Net Income		1,482												(6,567	)		8,049
Less: Net Income Attributable to Noncontrolling Interests		89												—			89
Net Income Attributable to Merck & Co., Inc.	$	1,393											$	(6,567	)	$	7,960
Earnings per Common Share Assuming Dilution	$	0.44														$	2.54	⁽⁵⁾

Average Shares Outstanding Assuming Dilution		3,123															3,123
Tax Rate		37.1	%														21.9	%

(1)

Amounts included in materials and production costs reflect expenses for the amortization of intangible assets and the amortization of purchase accounting adjustments to inventories recognized as a result of the merger. Amounts included in marketing and administrative expenses and other (income) expense, net reflect transaction and integration costs associated with mergers and acquisitions. 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 sold or closed related to actions under the company’s formal restructuring programs.

(3)	Included in other (income) expense, net is a $950 million legal reserve and $443 million of income recognized upon AstraZeneca’s asset option exercise.

(4)	Includes a $380 million tax benefit from changes in a foreign entity’s tax rate, a charge of $147 million associated with a change in tax law enacted as part of U.S. health care reform legislation, as well as the estimated tax impact on the reconciling items.

(5)

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

THIRD QUARTER 2011

(AMOUNTS IN MILLIONS)

Table 3a


	Global						U.S.						International
	3Q11		3Q10		% Change		3Q11		3Q10		% Change		3Q11		3Q10		% Change
TOTAL SALES ⁽¹⁾	$	12,022	$	11,125		8	$	5,345	$	5,139		4	$	6,677	$	5,985		12


PHARMACEUTICAL ⁽²⁾		10,354		9,523		9		4,515		4,265		6		5,839		5,258		11

Cardiovascular
Zetia		614		571		8		306		310		-1		308		261		18
Vytorin		469		485		-3		213		263		-19		256		222		15
Integrilin		53		63		-16		47		57		-17		5		6		-7

Diabetes & Obesity
Januvia		846		600		41		473		405		17		373		195		91
Janumet		350		247		42		183		151		21		167		97		73

Diversified Brands
Cozaar / Hyzaar		404		423		-4		36		37		-2		368		386		-5
Zocor		110		114		-3		7		11		-30		103		103
Propecia		112		109		2		33		37		-10		78		72		8
Claritin Rx		55		53		3								55		53		3
Remeron		65		50		29		1		2		-27		63		49		31
Vasotec / Vaseretic		57		69		-18								57		69		-18
Proscar		58		58				1		2		-23		56		56		1

Infectious Disease
Isentress		343		278		23		168		149		12		175		129		36
PegIntron		163		168		-3		19		12		60		144		157		-8
Cancidas		150		135		11		14		15		-7		136		120		14
Primaxin		124		135		-8		21		27		-25		103		108		-4
Invanz		107		91		17		55		48		13		52		43		22
Avelox		59		59		1		49		54		-9		10		5		*
Noxafil		61		52		17		17		15		12		44		37		19
Crixivan / Stocrin		56		49		16		1		2		-37		55		47		18
Rebetol		38		55		-32				1		*		38		54		-31
Victrelis		31				*		21				*		10				*

Neurosciences & Ophthalmology
Maxalt		156		133		17		105		95		10		51		38		34
Cosopt / Trusopt		124		114		9		4		5		-20		121		110		10

Oncology
Temodar		223		254		-12		100		98		2		123		156		-21
Emend		98		91		8		60		60				38		31		24
Intron A		47		50		-6		23		26		-12		24		24		1

Respiratory & Immunology
Singulair		1,336		1,215		10		901		823		10		435		393		11
Remicade		561		661		-15								561		661		-15
Nasonex		266		259		3		135		142		-4		130		118		11
Clarinex		128		131		-2		46		47		-1		82		84		-3
Arcoxia		108		94		15								108		94		15
Simponi		74		27		*								74		27		*
Asmanex		42		48		-12		38		45		-16		4		3		61
Proventil		38		43		-12		35		41		-13		2		2		-1
Dulera		22		2		*		22		2		*

Vaccines
Gardasil		445		316		41		330		247		34		115		70		66
ProQuad, M-M-R II and Varivax		391		434		-10		369		414		-11		22		21		6
RotaTeq		184		119		55		133		99		35		51		20		*
Pneumovax		133		110		21		107		92		17		26		18		43
Zostavax		108		23		*		105		23		*		4				*

Women’s Health & Endocrine
Fosamax		215		220		-2		10		21		-53		205		198		3
NuvaRing		159		134		18		90		84		7		68		50		38
Follistim AQ		129		119		8		45		43		5		84		76		10
Implanon		80		64		25		34		24		41		45		39		16
Cerazette		74		56		32								74		56		32

Other Pharmaceutical ⁽³⁾		888		942		-6		155		239		-35		734		703		4

ANIMAL HEALTH		826		687		20		194		154		26		631		533		18

CONSUMER CARE ⁽²⁾		421		409		3		265		263		1		156		146		7
Claritin OTC		118		120		-2		79		87		-9		39		33		19

Other Revenues ⁽⁴⁾		421		506		-17		370		458		-19		50		48		4
Astra		299		345		-13		299		345		-13

⁽¹⁾	Only select products are shown.

⁽²⁾

In the first quarter of 2011, Merck changed the reporting for certain over-the-counter products. Sales of these products outside the United States were previously recorded in the Pharmaceutical business, and are now reported in the Consumer Care business. Prior period amounts have been recast on a comparative basis.

⁽³⁾	Includes Pharmaceutical products not individually shown above. Other Vaccine sales included in Other Pharmaceutical were $100 million and $94 million on a global basis for third quarter 2011 and 2010 respectively.

⁽⁴⁾	Other revenues are primarily comprised of alliance revenue, miscellaneous corporate revenues and third party manufacturing sales.

*	100% or over

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SEPTEMBER YEAR-TO-DATE 2011

(AMOUNTS IN MILLIONS)

Table 3b


	Global						U.S.						International
	Sep YTD 2011		Sep YTD 2010		% Change		Sep YTD 2011		Sep YTD 2010		% Change		Sep YTD 2011		Sep YTD 2010		% Change
TOTAL SALES ⁽¹⁾	$	35,753	$	33,893		5	$	15,199	$	15,001		1	$	20,554	$	18,892		9


PHARMACEUTICAL ⁽²⁾		30,534		28,826		6		12,511		12,364		1		18,023		16,462		9

Cardiovascular
Zetia		1,788		1,668		7		896		898				892		770		16
Vytorin		1,407		1,452		-3		675		781		-14		733		671		9
Integrilin		172		203		-15		158		188		-16		15		15		-1

Diabetes & Obesity
Januvia		2,364		1,710		38		1,322		1,138		16		1,042		572		82
Janumet		977		666		47		518		412		26		458		255		80

Diversified Brands
Cozaar / Hyzaar		1,236		1,690		-27		87		391		-78		1,149		1,298		-12
Zocor		345		347		-1		24		30		-18		320		318		1
Propecia		330		322		2		98		109		-10		232		213		9
Claritin Rx		240		210		15								240		210		15
Remeron		181		160		13		5		5		-8		176		155		14
Vasotec / Vaseretic		173		191		-10								173		191		-10
Proscar		171		172		-1		4		5		-24		167		167

Infectious Disease
Isentress		972		777		25		488		391		25		484		386		25
PegIntron		482		539		-11		46		63		-27		436		477		-8
Cancidas		476		437		9		32		44		-27		443		393		13
Primaxin		397		452		-12		72		95		-24		324		357		-9
Invanz		296		249		19		150		130		16		146		119		23
Avelox		227		224		1		201		210		-4		25		14		82
Noxafil		171		150		14		44		42		6		127		109		17
Crixivan / Stocrin		151		148		2		4		6		-33		147		142		3
Rebetol		138		166		-17		1		1		-24		137		165		-17
Victrelis		53				*		39				*		14				*

Neurosciences & Ophthalmology
Maxalt		460		401		15		319		271		18		141		130		9
Cosopt / Trusopt		360		353		2		12		15		-16		348		338		3

Oncology
Temodar		704		799		-12		298		293		1		407		505		-20
Emend		305		268		14		171		166		3		134		102		31
Intron A		143		155		-8		72		86		-16		71		70		2

Respiratory & Immunology
Singulair		4,018		3,638		10		2,579		2,381		8		1,439		1,257		14
Remicade		2,156		2,004		8								2,156		2,004		8
Nasonex		962		917		5		440		493		-11		521		424		23
Clarinex		492		486		1		146		155		-6		347		330		5
Arcoxia		321		284		13								321		284		13
Simponi		203		55		*								203		55		*
Asmanex		149		155		-4		134		148		-10		15		7		*
Proventil		117		155		-24		111		149		-26		7		6		15
Dulera		59		2		*		58		2		*		1				*

Vaccines
Gardasil		935		768		22		679		565		20		256		202		27
ProQuad, M-M-R II and Varivax		927		1,093		-15		865		1,033		-16		62		61		2
RotaTeq		457		350		31		360		290		24		96		60		61
Pneumovax		276		220		25		214		181		18		62		40		57
Zostavax		254		136		86		247		136		81		7				*

Women’s Health & Endocrine
Fosamax		644		692		-7		38		68		-45		606		623		-3
NuvaRing		455		414		10		267		255		4		188		159		19
Follistim AQ		404		389		4		121		127		-4		283		263		8
Implanon		220		165		34		92		62		48		128		103		25
Cerazette		199		160		24								199		160		24

Other Pharmaceutical ⁽³⁾		2,567		2,834		-9		424		550		-23		2,144		2,284		-6

ANIMAL HEALTH		2,385		2,126		12		519		446		16		1,867		1,680		11

CONSUMER CARE ⁽²⁾		1,479		1,442		3		986		981				493		460		7
Claritin OTC		419		423		-1		304		313		-3		115		109		5

Other Revenues ⁽⁴⁾		1,355		1,499		-10		1,184		1,211		-2		172		288		-40
Astra		928		950		-2		928		950		-2

⁽¹⁾	Only select products are shown.

⁽²⁾

⁽³⁾	Includes Pharmaceutical products not individually shown above. Other Vaccine sales included in Other Pharmaceutical were $221 million and $207 million on a global basis for September YTD 2011 and 2010 respectively.

⁽⁴⁾	Other revenues are primarily comprised of alliance revenue, miscellaneous corporate revenues and third party manufacturing sales.

*	100% or over

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

Table 3c


	1Q11			2Q11			3Q11			Sep YTD 11			1Q10			2Q10			3Q10			Sep YTD 10			4Q10			Full Year			% Change 3Q		% Change YTD
TOTAL PHARMACEUTICAL	$	9,820		$	10,360		$	10,354		$	30,534		$	9,665		$	9,638		$	9,523		$	28,826		$	10,441		$	39,267			9		6


United States		3,907			4,088			4,515			12,511			4,072			4,026			4,265			12,364			4,384			16,748			6		1
% Pharmaceutical Sales		39.8	%		39.5	%		43.6	%		41.0	%		42.1	%		41.8	%		44.8	%		42.9	%		42.0	%		42.7	%

Europe ⁽¹⁾		2,587			2,827			2,588			8,002			2,810			2,631			2,342			7,782			2,677			10,459			11		3
% Pharmaceutical Sales		26.3	%		27.3	%		25.0	%		26.2	%		29.1	%		27.3	%		24.6	%		27.0	%		25.6	%		26.6	%

Japan		1,164			1,104			1,114			3,382			811			902			855			2,568			1,077			3,645			30		32
% Pharmaceutical Sales		11.8	%		10.7	%		10.8	%		11.1	%		8.4	%		9.4	%		9.0	%		8.9	%		10.3	%		9.3	%

Latin America		700			743			667			2,109			659			696			699			2,054			778			2,832			-5		3
% Pharmaceutical Sales		7.1	%		7.2	%		6.4	%		6.9	%		6.8	%		7.2	%		7.3	%		7.1	%		7.5	%		7.2	%

Asia Pacific		699			779			763			2,241			561			622			618			1,801			702			2,503			23		24
% Pharmaceutical Sales		7.1	%		7.5	%		7.4	%		7.3	%		5.8	%		6.5	%		6.5	%		6.2	%		6.7	%		6.4	%

China		187			206			220			613			133			159			145			437			173			611			52		40

Eastern Europe/Middle East Africa		358			369			371			1,097			375			395			353			1,123			393			1,516			5		-2
% Pharmaceutical Sales		3.6	%		3.6	%		3.6	%		3.6	%		3.9	%		4.1	%		3.7	%		3.9	%		3.8	%		3.9	%

Canada		360			399			285			1,044			337			328			374			1,039			364			1,403			-24		0
% Pharmaceutical Sales		3.7	%		3.9	%		2.8	%		3.4	%		3.5	%		3.4	%		3.9	%		3.6	%		3.5	%		3.6	%

Other		45			51			51			147			40			37			17			94			67			161			*		56
% Pharmaceutical Sales		0.5	%		0.5	%		0.5	%		0.5	%		0.4	%		0.4	%		0.2	%		0.3	%		0.6	%		0.4	%

*	100% or over

(1)	Europe primarily represents all European Union countries and the European Union accession markets.

MERCK & CO., INC.

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

THIRD QUARTER 2011

AMOUNTS IN MILLIONS

Table 4

EQUITY INCOME FROM AFFILIATES


	3Q11		3Q10		Sep YTD 2011		Sep YTD 2010
ASTRAZENECA LP	$	141	$	192	$	318	$	357
Other ⁽¹⁾		20		44		36		60

TOTAL	$	161	$	236	$	354	$	417

⁽¹⁾	Primarily reflects results for Sanofi Pasteur MSD and Johnson & JohnsonºMerck Consumer Pharmaceuticals (“JJMCP”). In the third quarter of 2011, the company divested its interest in the JJMCP joint venture.

SANOFI PASTEUR MSD JOINT VENTURE SALES DETAIL

All sales reported here are end-market JV sales, presented on a “NET” basis.


	3Q11		3Q10		Sep YTD 2011		Sep YTD 2010
GARDASIL	$	59	$	79	$	183	$	244
FLU VACCINES		128		148		129		158
OTHER VIRAL VACCINES		29		20		77		66
ROTATEQ		12		8		32		33
HEPATITIS VACCINES		9		6		29		18
Other Vaccines		138		121		355		352

TOTAL SANOFI PASTEUR MSD SALES	$	375	$	382	$	805	$	871

OTHER (INCOME) EXPENSE, NET


	3Q11			3Q10			Sep YTD 2011			Sep YTD 2010
INTEREST INCOME	$	(45	)	$	(23	)	$	(137	)	$	(57	)
INTEREST EXPENSE		189			173			557			539
EXCHANGE LOSSES		59			8			102			84
Other, net ⁽¹⁾		(137	)		950			287			429

TOTAL	$	66		$	1,108		$	809		$	995

⁽¹⁾

Other, net in the first nine months of 2011 includes a charge of $500 million related to the resolution of the arbitration proceeding with Johnson & Johnson. Other, net in the third quarter and first nine months of 2010 reflects a $950 million legal reserve. Other, net in the first nine months of 2010 also includes $443 million of income recognized upon AstraZeneca’s asset option exercise.

Merck & Co., Inc. - FORM 8-K - EX-99.2 - CERTAIN SUPPLEMENTAL INFORMATION - October 28, 2011

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Merck & Co., Inc. Reports