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

Attached files

file	filename
8-K - 8-K - Merck & Co., Inc.	a12-25094_18k.htm
EX-99.1 - EX-99.1 - Merck & Co., Inc.	a12-25094_1ex99d1.htm

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

	2012												2011																		% Change
	1Q			2Q			3Q			Sep YTD			1Q			2Q			3Q			Sep YTD			4Q			Full Year			3Q		Sep YTD
Sales	$	11,731		$	12,311		$	11,488		$	35,530		$	11,580		$	12,151		$	12,022		$	35,753		$	12,294		$	48,047		-4	%	-1	%
Costs, Expenses and Other
Materials and production	4,037			4,112			4,137			12,286			4,059			4,284			4,352			12,695			4,176			16,871			-5	%	-3	%
Marketing and administrative	3,074			3,249			3,063			9,386			3,164			3,525			3,340			10,029			3,704			13,733			-8	%	-6	%
Research and development	1,862			2,165			1,918			5,944			2,158			1,936			1,954			6,048			2,419			8,467			-2	%	-2	%
Restructuring costs	219			144			110			473			(14		)	668			119			773			533			1,306			-8	%	-39	%
Equity income from affiliates	(110		)	(142		)	(158		)	(410		)	(138		)	(55		)	(161		)	(354		)	(257		)	(610		)	-2	%	16	%
Other (income) expense, net	142			103			200			446			622			121			66			809			139			946			*		-45	%

Income Before Taxes	2,507			2,680			2,218			7,405			1,729			1,672			2,352			5,753			1,580			7,334			-6	%	29	%
Income Tax Provision (Benefit)	740			860			455			2,055			658			(382		)	628			904			37			942
Net Income	1,767			1,820			1,763			5,350			1,071			2,054			1,724			4,849			1,543			6,392			2	%	10	%
Less: Net Income Attributable to Noncontrolling Interests	29			27			34			89			28			30			32			89			31			120
Net Income Attributable to Merck & Co., Inc.	$	1,738		$	1,793		$	1,729		$	5,261		$	1,043		$	2,024		$	1,692		$	4,760		$	1,512		$	6,272		2	%	11	%
Earnings per Common Share Assuming Dilution	$	0.56		$	0.58		$	0.56		$	1.71		$	0.34		$	0.65		$	0.55		$	1.53		$	0.49		$	2.02		2	%	12	%

Average Shares Outstanding Assuming Dilution	3,074			3,072			3,079			3,077			3,104			3,110			3,091			3,102			3,069			3,094
Tax Rate	29.5		%	32.1		%	20.5		%	27.8		%	38.1		%	-22.8		%	26.7		%	15.7		%	2.3		%	12.8		%

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

*100% or greater

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

THIRD QUARTER 2011

(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	$	12,022								$	—		$	12,022
Costs, Expenses and Other
Materials and production	4,352			1,284		99				1,383			2,969
Marketing and administrative	3,340			57		31				88			3,252
Research and development	1,954			22		28				50			1,904
Restructuring costs	119					119				119			—
Equity income from affiliates	(161		)							—			(161		)
Other (income) expense, net	66							(137	)	(137		)	203
Income Before Taxes	2,352			(1,363	)	(277	)	137		(1,503		)	3,855
Taxes on Income	628									(287		)(4)	915
Net Income	1,724									(1,216		)	2,940
Less: Net Income Attributable to Noncontrolling Interests	32									—			32
Net Income Attributable to Merck & Co., Inc.	$	1,692								$	(1,216	)	$	2,908
Earnings per Common Share Assuming Dilution	$	0.55											$	0.94	(5)
Average Shares Outstanding Assuming Dilution	3,091												3,091
Tax Rate	26.7		%										23.7		%

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 mergers and acquisitions. Amounts included in marketing and administrative expenses reflect integration costs, as well as other costs associated with mergers and acquisitions, such as severance costs which are not part of the company’s formal restructuring programs. 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 closed or divested related to actions under the company’s formal restructuring programs.

(3) Reflects the gain on the divestiture of the company’s interest in the Johnson & JohnsonºMerck Consumer Pharmaceuticals Company joint venture.

(4) Represent 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 $2,903 million for the third quarter of 2011.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

NINE MONTHS ENDED SEPTEMBER 30, 2011

(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	$	35,753								$	—		$	35,753
Costs, Expenses and Other
Materials and production	12,695			3,925		280				4,205			8,490
Marketing and administrative	10,029			192		77				269			9,760
Research and development	6,048			343		89				432			5,616
Restructuring costs	773					773				773			—
Equity income from affiliates	(354		)							—			(354		)
Other (income) expense, net	809							236		236			573
Income Before Taxes	5,753			(4,460	)	(1,219	)	(236	)	(5,915		)	11,668
Taxes on Income	904									(1,955		)(4)	2,859
Net Income	4,849									(3,960		)	8,809
Less: Net Income Attributable to Noncontrolling Interests	89									—			89
Net Income Attributable to Merck & Co., Inc.	$	4,760								$	(3,960	)	$	8,720
Earnings per Common Share Assuming Dilution	$	1.53											$	2.80	(5)
Average Shares Outstanding Assuming Dilution	3,102												3,102
Tax Rate	15.7		%										24.5		%

(1) Amounts included in materials and production costs reflect expenses of $3.8 billion for the amortization of intangible assets and the amortization of purchase accounting adjustments to inventories recognized as a result of mergers and acquisitions, as well as $118 million of impairment charges on product intangibles. Amounts included in marketing and administrative expenses reflect integration costs, as well as other costs associated with mergers and acquisitions, such as severance costs which are not part of the company’s formal restructuring programs. Amounts included in research and development expenses represent in-process research and development (“IPR&D”) impairment charges.

(3) Included in other (income) expense, net is a $500 million charge related to the resolution of the arbitration proceeding with Johnson & Johnson, a $136 million gain on the divestiture of the company’s interest in the Johnson & JohnsonºMerck Consumer Pharmaceuticals Company joint venture and a $127 million gain on the sale of certain manufacturing facilities and related assets.

(4) Includes a net benefit of approximately $700 million relating to the settlement of the company’s 2002-2005 federal income tax audit, the favorable impact of certain foreign and state tax rate changes that resulted in a net $230 million reduction of deferred tax liabilities on intangibles established in purchase accounting, as well as the estimated tax impact on the reconciling items.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

THIRD QUARTER 2012

(AMOUNTS IN MILLIONS)

Table 3a

	Global					U.S.					International
	3Q12		3Q11		% Change	3Q12		3Q11		% Change	3Q12		3Q11		% Change
TOTAL SALES (1)	$	11,488	$	12,022	-4	$	5,112	$	5,345	-4	$	6,377	$	6,677	-5

PHARMACEUTICAL	9,875		10,354		-5	4,304		4,515		-5	5,571		5,839		-5

Primary Care and Women’s Health

Cardiovascular
Zetia	645		614		5	348		306		14	297		308		-4
Vytorin	423		469		-10	193		213		-9	229		256		-10

Diabetes & Obesity
Januvia	975		846		15	546		473		15	429		373		15
Janumet	405		350		16	216		183		18	189		167		13

Respiratory
Singulair	602		1,336		-55	249		901		-72	353		435		-19
Nasonex	292		266		10	156		135		15	136		130		4
Clarinex	64		128		-50	17		46		-62	46		82		-43
Asmanex	42		42		—	38		38		1	4		4		-15
Dulera	52		22		*	50		22		*	2				*

Women’s Health & Endocrine
Fosamax	152		215		-29	6		10		-38	146		205		-29
NuvaRing	156		159		-2	93		90		3	64		68		-7
Follistim AQ	111		129		-14	39		45		-14	72		84		-14
Implanon	93		80		16	34		34		-1	59		45		30
Cerazette	64		74		-14						64		74		-14

Other
Maxalt	166		156		7	136		105		30	31		51		-40
Arcoxia	109		108		2						109		108		2
Avelox	30		59		-50	27		49		-44	2		10		-80

Hospital and Specialty
Immunology
Remicade	490		561		-13						490		561		-13
Simponi	86		74		15						86		74		15

Infectious Disease
Isentress	399		343		16	219		168		31	180		175		3
PegIntron	165		163		1	22		19		19	143		144		-1
Cancidas	163		150		8	8		14		-41	155		136		13
Victrelis	149		31		*	79		21		*	70		10		*
Invanz	118		107		10	60		55		10	58		52		11
Primaxin	109		124		-12	6		21		-70	103		103		-1
Noxafil	66		61		9	19		17		12	47		44		7

Oncology
Temodar	227		223		2	111		100		11	116		123		-6
Emend	111		98		12	67		60		11	44		38		14

Other
Cosopt / Trusopt	102		124		-18	3		4		-22	99		121		-18
Bridion	68		52		29						68		52		29
Integrilin	48		53		-9	44		47		-7	4		5		-28

Diversified Brands
Cozaar / Hyzaar	295		404		-27	3		36		-92	292		368		-21
Propecia	104		112		-7	30		33		-9	74		78		-6
Zocor	86		110		-22	7		7		-10	79		103		-23
Claritin Rx	47		55		-14						47		55		-14
Remeron	52		65		-19	1		1		-34	51		63		-19
Proscar	55		58		-6	1		1		-29	54		56		-5
Vasotec / Vaseretic	42		57		-27						42		57		-27

Vaccines
Gardasil	581		445		31	412		330		25	169		115		46
ProQuad, M-M-R II and Varivax	396		391		1	366		369		-1	29		22		33
RotaTeq	150		184		-19	108		133		-19	41		51		-19
Zostavax	202		108		87	191		105		83	10		4		*
Pneumovax	160		133		20	139		107		30	21		26		-21

Other Pharmaceutical (2)	1,023		1,015		1	258		217		19	767		798		-4

ANIMAL HEALTH	815		826		-1	211		194		9	604		631		-4

CONSUMER CARE	451		421		7	290		265		10	161		156		3
Claritin OTC	118		118			81		79		2	37		39		-5

Other Revenues (3)	347		421		-17	306		370		-17	41		50		-18
Astra	255		299		-15	255		299		-15

* 100% or greater

(1) Only select products are shown.

(2) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $116 million and $100 million on a global basis for third quarter 2012 and 2011, respectively.

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

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SEPTEMBER YEAR-TO-DATE 2012

(AMOUNTS IN MILLIONS)

Table 3b

	Global					U.S.					International
	Sep YTD 2012		Sep YTD 2011		% Change	Sep YTD 2012		Sep YTD 2011		% Change	Sep YTD 2012		Sep YTD 2011		% Change
TOTAL SALES (1)	$	35,530	$	35,753	-1	$	15,676	$	15,199	3	$	19,853	$	20,554	-3

PHARMACEUTICAL	30,517		30,534		—	13,127		12,511		5	17,390		18,023		-4

Primary Care and Women’s Health

Cardiovascular
Zetia	1,891		1,788		6	987		896		10	904		892		1
Vytorin	1,312		1,407		-7	578		675		-14	734		733		—

Diabetes & Obesity
Januvia	2,952		2,364		25	1,571		1,322		19	1,382		1,042		33
Janumet	1,207		977		24	628		518		21	580		458		27

Respiratory
Singulair	3,373		4,018		-16	2,127		2,579		-18	1,245		1,439		-13
Nasonex	960		962		—	459		440		4	501		521		-4
Clarinex	337		492		-32	122		146		-16	215		347		-38
Asmanex	141		149		-6	128		134		-5	13		15		-11
Dulera	140		59		*	135		58		*	6		1		*

Women’s Health & Endocrine
Fosamax	522		644		-19	22		38		-41	500		606		-18
NuvaRing	459		455		1	268		267		—	191		188		1
Follistim AQ	352		404		-13	124		121		2	228		283		-19
Implanon	254		220		15	104		92		13	150		128		17
Cerazette	202		199		2						202		199		2

Other
Maxalt	476		460		3	363		319		14	113		141		-20
Arcoxia	338		321		5						338		321		5
Avelox	146		227		-35	140		201		-31	7		25		-74

Hospital and Specialty
Immunology
Remicade	1,527		2,156		-29						1,527		2,156		-29
Simponi	236		203		16						236		203		16

Infectious Disease
Isentress	1,133		972		17	608		488		25	525		484		9
PegIntron	510		482		6	79		46		71	431		436		-1
Cancidas	474		476		—	23		32		-30	451		443		2
Victrelis	387		53		*	215		39		*	172		14		*
Invanz	329		296		11	166		150		11	163		146		11
Primaxin	301		397		-24	17		72		-76	284		324		-13
Noxafil	191		171		12	54		44		23	136		127		8

Oncology
Temodar	688		704		-2	322		298		8	366		407		-10
Emend	358		305		17	202		171		18	156		134		16

Other
Cosopt / Trusopt	331		360		-8	10		12		-18	321		348		-8
Bridion	186		141		32						186		141		32
Integrilin	160		172		-7	147		158		-6	13		15		-12

Diversified Brands
Cozaar / Hyzaar	969		1,236		-22	16		87		-81	953		1,149		-17
Propecia	312		330		-5	95		98		-3	218		232		-6
Zocor	285		345		-17	20		24		-19	265		320		-17
Claritin Rx	181		240		-25						181		240		-25
Remeron	175		181		-3	4		5		-24	171		176		-3
Proscar	160		171		-6	3		4		-27	157		167		-6
Vasotec / Vaseretic	144		173		-17						144		173		-17

Vaccines
Gardasil	1,189		935		27	809		679		19	379		256		48
ProQuad, M-M-R II and Varivax	967		927		4	880		865		2	87		62		40
RotaTeq	433		457		-5	317		360		-12	116		96		20
Zostavax	426		254		68	396		247		60	30		7		*
Pneumovax	372		276		35	297		214		39	76		62		22

Other Pharmaceutical (2)	3,031		2,975		2	691		612		13	2,337		2,361		-1

ANIMAL HEALTH	2,501		2,385		5	643		519		24	1,859		1,867		—

CONSUMER CARE	1,557		1,479		5	1,056		986		7	501		493		2
Claritin OTC	432		419		3	318		304		5	114		115		—

Other Revenues (3)	955		1,355		-30	851		1,184		-28	104		172		-39
Astra	664		928		-28	664		928		-28

* 100% or greater

(1) Only select products are shown.

(2) Includes Pharmaceutical products not individually shown above. Other Vaccines sales included in Other Pharmaceutical were $251 million and $221 million on a global basis for September YTD 2012 and 2011, respectively.

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

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

Table 3c

	1Q12			2Q12			3Q12			Sep YTD 12			1Q11			2Q11			3Q11			Sep YTD 11			4Q11			Full Year			% Change 3Q	% Change YTD

TOTAL PHARMACEUTICAL	$	10,082		$	10,560		$	9,875		$	30,517		$	9,820		$	10,360		$	10,354		$	30,534		$	10,755		$	41,289		-5	—

United States	4,189			4,633			4,304			13,127			3,907			4,088			4,515			12,511			4,606			17,117			-5	5
% Pharmaceutical Sales	41.6		%	43.9		%	43.6		%	43.0		%	39.8		%	39.5		%	43.6		%	41.0		%	42.8		%	41.5		%

Europe (1)	2,558			2,540			2,210			7,309			2,587			2,827			2,588			8,002			2,621			10,623			-15	-9
% Pharmaceutical Sales	25.4		%	24.1		%	22.4		%	24.0		%	26.3		%	27.3		%	25.0		%	26.2		%	24.4		%	25.7		%

Japan	1,267			1,199			1,124			3,590			1,164			1,104			1,114			3,382			1,327			4,709			1	6
% Pharmaceutical Sales	12.6		%	11.4		%	11.4		%	11.8		%	11.8		%	10.7		%	10.8		%	11.1		%	12.3		%	11.4		%

Latin America	627			668			715			2,010			700			743			667			2,109			747			2,857			7	-5
% Pharmaceutical Sales	6.2		%	6.3		%	7.2		%	6.6		%	7.1		%	7.2		%	6.4		%	6.9		%	6.9		%	6.9		%

Asia Pacific	762			787			846			2,394			699			779			763			2,241			736			2,977			11	7
% Pharmaceutical Sales	7.6		%	7.4		%	8.6		%	7.8		%	7.1		%	7.5		%	7.4		%	7.3		%	6.8		%	7.2		%

China	221			262			262			746			187			206			220			613			221			834			19	22

Eastern Europe/Middle East Africa	361			441			366			1,168			358			369			371			1,097			378			1,476			-1	6
% Pharmaceutical Sales	3.6		%	4.2		%	3.7		%	3.8		%	3.6		%	3.6		%	3.6		%	3.6		%	3.5		%	3.6		%

Canada	264			236			257			758			360			399			285			1,044			279			1,323			-10	-27
% Pharmaceutical Sales	2.6		%	2.2		%	2.6		%	2.5		%	3.7		%	3.9		%	2.8		%	3.4		%	2.6		%	3.2		%

Other	53			56			52			161			45			51			51			147			61			208			2	10
% Pharmaceutical Sales	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.5		%	0.6		%	0.5		%

(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 2012

Table 4

EQUITY INCOME FROM AFFILIATES (millions of dollars)

	3Q12		3Q11		YTD 2012		YTD 2011
ASTRAZENECA LP	$	134	$	141	$	387	$	318
Other (1)	24		20		23		36
TOTAL	$	158	$	161	$	410	$	354

(1) Includes results for Sanofi Pasteur MSD.

SANOFI PASTEUR MSD JOINT VENTURE SALES DETAIL (millions of dollars)

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

	3Q12		3Q11		YTD 2012		YTD 2011
GARDASIL	$	82	$	59	$	197	$	183
FLU VACCINES	82		128		82		129
OTHER VIRAL VACCINES	26		29		81		77
ROTATEQ	12		12		35		32
HEPATITIS VACCINES	7		9		24		29
Other Vaccines	127		138		352		355
TOTAL SANOFI PASTEUR MSD SALES	$	336	$	375	$	771	$	805

OTHER (INCOME) EXPENSE, NET (millions of dollars)

	3Q12			3Q11			YTD 2012			YTD 2011
INTEREST INCOME (1)	$	(47	)	$	(32	)	$	(177	)	$	(102	)
INTEREST EXPENSE (1)	178			176			524			522
EXCHANGE LOSSES	50			59			130			102
Other, net (2)	19			(137		)	(31		)	287
TOTAL	$	200		$	66		$	446		$	809

(1) Prior period amounts reflect reclassifications to conform to the current period presentation.

(2) 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.

Attached files

Merck & Co., Inc. Reports

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