EX-99.2 3 tm2322190d1_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

	2023									2022																		% Change
	1Q			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Full Year			2Q			June YTD
Sales	$	14,487		$	15,035		$	29,522		$	15,901		$	14,593		$	30,494		$	14,959		$	13,830		$	59,283			3	%		-3	%

Costs, Expenses and Other
Cost of sales		3,926			4,024			7,951			5,380			4,216			9,596			3,934			3,881			17,411			-5	%		-17	%
Selling, general and administrative		2,479			2,702			5,182			2,323			2,512			4,834			2,520			2,687			10,042			8	%		7	%
Research and development		4,276			13,321			17,597			2,576			2,798			5,374			4,399			3,775			13,548			*			*
Restructuring costs		67			151			218			53			142			194			94			49			337			6	%		12	%
Other (income) expense, net		89			172			259			708			438			1,148			429			(75	)		1,501			-61	%		-77	%
Income (Loss) Before Taxes		3,650			(5,335	)		(1,685	)		4,861			4,487			9,348			3,583			3,513			16,444			*			*
Income Tax Provision		825			637			1,462			554			538			1,092			330			495			1,918
Net Income (Loss)		2,825			(5,972	)		(3,147	)		4,307			3,949			8,256			3,253			3,018			14,526			*			*
Less: Net Income (Loss) Attributable to Noncontrolling Interests		4			3			7			(3	)		5			2			5			1			7
Net Income (Loss) Attributable to Merck & Co., Inc.	$	2,821		$	(5,975	)	$	(3,154	)	$	4,310		$	3,944		$	8,254		$	3,248		$	3,017		$	14,519			*			*

Earnings (Loss) per Common Share Assuming Dilution ⁽¹⁾	$	1.11		$	(2.35	)	$	(1.24	)	$	1.70		$	1.55		$	3.25		$	1.28		$	1.18		$	5.71			*			*

Average Shares Outstanding Assuming Dilution ⁽¹⁾		2,551			2,539			2,539			2,537			2,540			2,538			2,542			2,548			2,542
Tax Rate from Continuing Operations		22.6	%		-11.9	%		-86.8	%		11.4	%		12.0	%		11.7	%		9.2	%		14.1	%		11.7	%

* 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 quarter and first six months 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.

THREE AND SIX MONTHS ENDED JUNE 30, 2022 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			Adjustment Subtotal			Non-GAAP
Second Quarter
Cost of sales	$	4,216			451			67						518		$	3,698
Selling, general and administrative		2,512			65			27						92			2,420
Research and development		2,798			12			22						34			2,764
Restructuring costs		142						142						142			-
Other (income) expense, net		438			2						234			236			202
Income Before Taxes		4,487			(530	)		(258	)		(234	)		(1,022	)		5,509
Income Tax Provision (Benefit)		538			(131	)⁽³⁾		(40	)⁽³⁾		(52	)⁽³⁾		(223	)		761
Net Income		3,949			(399	)		(218	)		(182	)		(799	)		4,748
Net Income Attributable to Merck & Co., Inc.		3,944			(399	)		(218	)		(182	)		(799	)		4,743
Earnings per Common Share Assuming Dilution	$	1.55			(0.16	)		(0.09	)		(0.07	)		(0.32	)	$	1.87

Tax Rate		12.0	%														13.8	%

June YTD
Cost of sales	$	9,596			1,131			113						1,244		$	8,352
Selling, general and administrative		4,834			115			48						163			4,671
Research and development		5,374			34			29						63			5,311
Restructuring costs		194						194						194			-
Other (income) expense, net		1,148			(112	)					918			806			342
Income Before Taxes		9,348			(1,168	)		(384	)		(918	)		(2,470	)		11,818
Income Tax Provision (Benefit)		1,092			(286	)⁽³⁾		(62	)⁽³⁾		(204	)⁽³⁾		(552	)		1,644
Net Income		8,256			(882	)		(322	)		(714	)		(1,918	)		10,174
Net Income Attributable to Merck & Co., Inc.		8,254			(882	)		(322	)		(714	)		(1,918	)		10,172
Earnings per Common Share Assuming Dilution	$	3.25			(0.35	)		(0.13	)		(0.28	)		(0.76	)	$	4.01

Tax Rate		11.7	%														13.9	%

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, senior management’s annual 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 expenses for the amortization of intangible assets. Amounts included in other (income) expense, net, for the six-month period primarily reflect royalty income and a decrease in the estimated fair value measurement of liabilities for contingent consideration related to the prior 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 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

SECOND QUARTER 2023

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global						U.S.						International
	2Q 2023		2Q 2022		% Change		2Q 2023		2Q 2022		% Change		2Q 2023		2Q 2022		% Change
TOTAL SALES ⁽¹⁾	$	15,035	$	14,593		3	$	7,018	$	6,238		12	$	8,018	$	8,355		-4
PHARMACEUTICAL		13,457		12,756		6		6,570		5,726		15		6,887		7,030		-2
Oncology
Keytruda		6,271		5,252		19		3,863		3,197		21		2,408		2,055		17
Alliance Revenue – Lynparza ⁽²⁾		310		275		13		144		143		1		166		132		26
Alliance Revenue – Lenvima ⁽²⁾		242		231		5		163		128		28		79		103		-24
Welireg		50		27		89		49		27		84		2				*
Alliance Revenue – Reblozyl		47		33		41		36		28		26		11		5		123
Vaccines ⁽³⁾
Gardasil / Gardasil 9		2,458		1,674		47		464		428		8		1,994		1,245		60
ProQuad / M-M-R II / Varivax		582		578		1		447		434		3		135		143		-6
Vaxneuvance		168		12		*		147		11		*		20				*
RotaTeq		131		173		-25		93		98		-5		37		75		-50
Pneumovax 23		92		153		-40		23		94		-76		69		59		17
Vaqta		42		35		20		29		16		76		13		19		-29
Hospital Acute Care
Bridion		502		426		18		299		237		27		203		190		7
Prevymis		143		103		39		61		47		31		82		56		46
Dificid		76		66		14		68		63		8		8		3		144
Noxafil		55		60		-8		11		16		-32		45		45		-
Zerbaxa		54		46		17		30		22		36		24		24		-1
Primaxin		53		64		-16		-2				*		56		64		-13
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁴⁾		68		98		-31		70		88		-21		-2		10		-119
Adempas ⁽⁵⁾		65		63		3								65		63		3
Virology
Lagevrio		203		1,177		-83		2				*		201		1,177		-83
Isentress / Isentress HD		136		147		-7		56		67		-16		80		80		1
Neuroscience
Belsomra		63		69		-9		21		19		10		42		50		-16
Immunology
Simponi		180		181		-1								180		181		-1
Remicade		48		53		-11								48		53		-11
Diabetes ⁽⁶⁾
Januvia		511		756		-33		243		301		-19		267		455		-41
Janumet		354		476		-26		82		105		-22		272		371		-27
Other Pharmaceutical ⁽⁷⁾		553		528		5		171		157		9		382		372		3
ANIMAL HEALTH		1,456		1,467		-1		475		477		-1		982		990		-1
Livestock		807		826		-2		165		164		1		643		662		-3
Companion Animal		649		641		1		310		313		-1		339		328		4
Other Revenues ⁽⁸⁾		122		370		-67		-27		35		-177		149		335		-56

*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⁾Total Vaccines sales were $3,557 million in the second quarter of 2023 and $2,709 million in the second quarter of 2022.

⁽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 $951 million in the second quarter of 2023 and $1,300 million in the second quarter of 2022.

⁽⁷⁾Includes Pharmaceutical products not individually shown above.

⁽⁸⁾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 $3 million in the second quarter of 2023 and $32 million in the second quarter of 2022.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

JUNE YEAR-TO-DATE 2023

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	Global						U.S.						International
	June YTD 2023		June YTD 2022		% Change		June YTD 2023		June YTD 2022		% Change		June YTD 2023		June YTD 2022		% Change
TOTAL SALES ⁽¹⁾	$	29,522	$	30,494		-3	$	13,676	$	13,577		1	$	15,846	$	16,917		-6
PHARMACEUTICAL		26,179		26,863		-3		12,688		12,498		2		13,491		14,364		-6
Oncology
Keytruda		12,065		10,061		20		7,348		5,976		23		4,718		4,085		15
Alliance Revenue – Lynparza ⁽²⁾		585		541		8		286		283		1		299		257		16
Alliance Revenue – Lenvima ⁽²⁾		474		459		3		316		284		11		158		175		-10
Welireg		92		45		105		90		45		99		3				*
Alliance Revenue – Reblozyl ⁽³⁾		90		86		4		66		55		19		24		30		-22
Vaccines ⁽⁴⁾
Gardasil / Gardasil 9		4,430		3,133		41		880		846		4		3,550		2,287		55
ProQuad / M-M-R II / Varivax		1,109		1,047		6		868		805		8		242		243		-
RotaTeq		428		389		10		273		273		-		155		116		34
Vaxneuvance		274		16		*		241		16		*		33		1		*
Pneumovax 23		188		325		-42		63		212		-70		125		114		10
Vaqta		82		71		16		59		45		30		23		25		-8
Hospital Acute Care
Bridion		989		821		21		576		432		33		413		389		6
Prevymis		273		197		39		116		87		34		157		110		43
Dificid		141		119		19		130		113		15		11		6		80
Primaxin		133		122		9		2		1		128		132		122		8
Noxafil		116		118		-2		25		25		-2		91		92		-2
Zerbaxa		104		76		36		57		40		42		47		36		29
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁵⁾		167		170		-2		153		159		-4		14		11		24
Adempas ⁽⁶⁾		125		124		-								125		124		-
Virology
Lagevrio		595		4,424		-87				1,523		-100		595		2,901		-79
Isentress / Isentress HD		259		305		-15		108		128		-16		151		177		-15
Neuroscience
Belsomra		119		137		-14		37		39		-6		82		98		-17
Immunology
Simponi		359		366		-2								359		366		-2
Remicade		99		114		-13								99		114		-13
Diabetes ⁽⁷⁾
Januvia		1,062		1,535		-31		514		626		-18		548		909		-40
Janumet		683		931		-27		138		168		-18		544		762		-29
Other Pharmaceutical ⁽⁸⁾		1,138		1,131		1		342		317		8		793		814		-3
ANIMAL HEALTH		2,947		2,949		-		956		951		1		1,991		1,998		-
Livestock		1,656		1,658		-		338		335		1		1,318		1,322		-
Companion Animal		1,291		1,291		-		618		616		-		673		676		-
Other Revenues ⁽⁹⁾		396		682		-42		32		128		-75		364		555		-34

*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 and a milestone payment of $20 million received in the first quarter of 2022.

⁽⁴⁾Total Vaccines sales were $6,690 million and $5,191 million on a global share basis for June YTD 2023 and 2022, respectively.

⁽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 $1,901 million and $2,605 million on a global share basis for June YTD 2023 and 2022, respectively.

⁽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 $54 million and $146 million on a global share basis for June YTD 2023 and 2022, respectively.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

	2023									2022																		% Change
	1Q			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Full Year			2Q		June YTD
TOTAL PHARMACEUTICAL	$	12,721		$	13,457		$	26,179		$	14,107		$	12,756		$	26,863		$	12,963		$	12,180		$	52,005			6		-3

United States		6,117			6,570			12,688			6,773			5,726			12,499			6,620			5,871			24,989			15		2
% Pharmaceutical Sales		48.1	%		48.8	%		48.5	%		48.0	%		44.9	%		46.5	%		51.1	%		48.2	%		48.1	%
Europe ⁽¹⁾		2,326			2,401			4,727			3,309			2,677			5,986			2,427			2,494			10,906			-10		-21
% Pharmaceutical Sales		18.3	%		17.8	%		18.1	%		23.5	%		21.0	%		22.3	%		18.7	%		20.5	%		21.0	%
China		1,694			1,887			3,581			1,113			1,355			2,468			1,419			1,216			5,102			39		45
% Pharmaceutical Sales		13.3	%		14.0	%		13.7	%		7.9	%		10.6	%		9.2	%		10.9	%		10.0	%		9.8	%
Asia Pacific (other than China and Japan)		703			705			1,409			786			854			1,640			702			691			3,034			-17		-14
% Pharmaceutical Sales		5.5	%		5.2	%		5.4	%		5.6	%		6.7	%		6.1	%		5.4	%		5.7	%		5.8	%
Japan		737			652			1,390			965			1,092			2,057			653			832			3,542			-40		-32
% Pharmaceutical Sales		5.8	%		4.8	%		5.3	%		6.8	%		8.6	%		7.7	%		5.0	%		6.8	%		6.8	%
Latin America		470			566			1,036			435			453			888			511			472			1,871			25		17
% Pharmaceutical Sales		3.7	%		4.2	%		4.0	%		3.1	%		3.6	%		3.3	%		3.9	%		3.9	%		3.6	%
Eastern Europe/Middle East/Africa		381			370			751			450			339			789			360			320			1,469			9		-5
% Pharmaceutical Sales		3.0	%		2.7	%		2.9	%		3.2	%		2.7	%		2.9	%		2.8	%		2.6	%		2.8	%
Canada		141			127			268			189			166			354			166			158			678			-23		-24
% Pharmaceutical Sales		1.1	%		0.9	%		1.0	%		1.3	%		1.3	%		1.3	%		1.3	%		1.3	%		1.3	%
Other		152			179			329			87			94			182			105			126			414			90		81
% Pharmaceutical Sales		1.2	%		1.6	%		1.1	%		0.6	%		0.6	%		0.7	%		0.9	%		1.0	%		0.8	%

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

	2Q23			2Q22			June YTD 2023			June YTD 2022
Interest income	$	(109	)	$	(15	)	$	(221	)	$	(22	)
Interest expense		277			240			519			483
Exchange losses		62			86			122			124
Loss (income) from investments in equity securities, net ⁽¹⁾		175			284			(274	)		991
Net periodic defined benefit plan (credit) cost other than service cost		(111	)		(27	)		(226	)		(148	)
Other, net		(122	)		(130	)		339			(280	)
Total	$	172		$	438		$	259		$	1,148

⁽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.