EX-99.2 3 tm2328962d1_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			3Q			Sep YTD			1Q			2Q			3Q			Sep YTD			4Q			Full Year			3Q			Sep YTD
Sales	$	14,487		$	15,035		$	15,962		$	45,485		$	15,901		$	14,593		$	14,959		$	45,453		$	13,830		$	59,283			7	%		–

Costs, Expenses and Other
Cost of sales		3,926			4,024			4,264			12,214			5,380			4,216			3,934			13,530			3,881			17,411			8	%		-10	%
Selling, general and administrative		2,479			2,702			2,519			7,700			2,323			2,512			2,520			7,355			2,687			10,042			–			5	%
Research and development		4,276			13,321			3,307			20,904			2,576			2,798			4,399			9,773			3,775			13,548			-25	%		*
Restructuring costs		67			151			126			344			53			142			94			288			49			337			34	%		19	%
Other (income) expense, net		89			172			126			388			708			438			429			1,576			(75	)		1,501			-71	%		-75	%
Income (Loss) Before Taxes		3,650			(5,335	)		5,620			3,935			4,861			4,487			3,583			12,931			3,513			16,444			57	%		-70	%
Income Tax Provision		825			637			870			2,332			554			538			330			1,423			495			1,918
Net Income (Loss)		2,825			(5,972	)		4,750			1,603			4,307			3,949			3,253			11,508			3,018			14,526			46	%		-86	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests		4			3			5			12			(3	)		5			5			6			1			7
Net Income (Loss) Attributable to Merck & Co., Inc.	$	2,821		$	(5,975	)	$	4,745		$	1,591		$	4,310		$	3,944		$	3,248		$	11,502		$	3,017		$	14,519			46	%		-86	%

Earnings (Loss) per Common Share Assuming Dilution ⁽¹⁾	$	1.11		$	(2.35	)	$	1.86		$	0.62		$	1.70		$	1.55		$	1.28		$	4.53		$	1.18		$	5.71			45	%		-86	%

Average Shares Outstanding Assuming Dilution ⁽¹⁾		2,551			2,539			2,546			2,549			2,537			2,540			2,542			2,540			2,548			2,542
Tax Rate		22.6	%		-11.9	%		15.5	%		59.3	%		11.4	%		12.0	%		9.2	%		11.0	%		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 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 NINE MONTHS ENDED SEPTEMBER 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
Third Quarter
Cost of sales	$	3,934			446			54						500		$	3,434
Selling, general and administrative		2,520			22			26						48			2,472
Research and development		4,399			902			1						903			3,496
Restructuring costs		94						94						94			–
Other (income) expense, net		429			(26	)					350			324			105
Income Before Taxes		3,583			(1,344	)		(175	)		(350	)		(1,869	)		5,452
Income Tax Provision (Benefit)		330			(302	)⁽³⁾		(35	)⁽³⁾		(77	)⁽³⁾		(414	)		744
Net Income		3,253			(1,042	)		(140	)		(273	)		(1,455	)		4,708
Net Income Attributable to Merck & Co., Inc.		3,248			(1,042	)		(140	)		(273	)		(1,455	)		4,703
Earnings per Common Share Assuming Dilution	$	1.28			(0.40	)		(0.06	)		(0.11	)		(0.57	)	$	1.85

Tax Rate		9.2	%														13.6	%

Sep YTD
Cost of sales	$	13,530			1,577			167						1,744		$	11,786
Selling, general and administrative		7,355			137			74						211			7,144
Research and development		9,773			936			30						966			8,807
Restructuring costs		288						288						288			–
Other (income) expense, net		1,576			(138	)					1,268			1,130			446
Income Before Taxes		12,931			(2,512	)		(559	)		(1,268	)		(4,339	)		17,270
Income Tax Provision (Benefit)		1,423			(587	)⁽³⁾		(97	)⁽³⁾		(281	)⁽³⁾		(965	)		2,388
Net Income		11,508			(1,925	)		(462	)		(987	)		(3,374	)		14,882
Net Income Attributable to Merck & Co., Inc.		11,502			(1,925	)		(462	)		(987	)		(3,374	)		14,876
Earnings per Common Share Assuming Dilution	$	4.53			(0.76	)		(0.18	)		(0.39	)		(1.33	)	$	5.86

Tax Rate		11.0	%														13.8	%

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 for the three and nine month periods primarily reflect $887 million of intangible asset impairment charges largely related to nemtabrutinib, which was obtained as part of the 2020 ArQule, Inc. acquisition, and expenses for the amortization of intangible assets. Amounts included in other (income) expense, net, for the three and nine month periods 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

THIRD QUARTER 2023

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global					U.S.						International
	3Q 2023		3Q 2022		% Change	3Q 2023		3Q 2022		% Change		3Q 2023		3Q 2022		% Change
TOTAL SALES ⁽¹⁾	$	15,962	$	14,959	7	$	7,715	$	7,322		5	$	8,247	$	7,637		8
PHARMACEUTICAL		14,263		12,963	10		7,153		6,620		8		7,110		6,343		12
Oncology
Keytruda		6,338		5,426	17		3,795		3,331		14		2,543		2,095		21
Alliance Revenue – Lynparza ⁽²⁾		299		284	5		153		144		7		146		140		4
Alliance Revenue – Lenvima ⁽²⁾		260		202	29		160		142		13		100		60		67
Welireg		54		38	43		51		38		35		3				-
Alliance Revenue – Reblozyl		52		39	35		43		32		34		10		7		42
Vaccines ⁽³⁾
Gardasil / Gardasil 9		2,585		2,294	13		838		957		-12		1,746		1,337		31
ProQuad / M-M-R II / Varivax		713		668	7		567		532		7		146		136		7
Vaxneuvance		214		16	*		182		15		*		33		1		*
RotaTeq		156		256	-39		108		154		-30		48		102		-53
Pneumovax 23		140		131	6		42		68		-39		98		63		55
Vaqta		69		64	8		32		27		18		37		36		1
Hospital Acute Care
Bridion		424		423	-		265		233		14		159		190		-17
Prevymis		157		114	38		70		49		43		87		64		35
Dificid		74		77	-4		69		72		-3		5		6		-20
Zerbaxa		53		43	23		29		24		19		24		19		27
Noxafil		51		62	-18		4		13		-71		47		49		-3
Primaxin		41		63	-35						N/M		41		63		-35
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁴⁾		92		88	5		96		85		13		-4		3		*
Adempas ⁽⁵⁾		65		57	15								65		57		15
Virology
Lagevrio		640		436	47								640		436		47
Isentress / Isentress HD		119		161	-27		58		68		-15		61		93		-35
Neuroscience
Belsomra		58		62	-6		23		20		12		35		42		-15
Immunology
Simponi		179		173	3								179		173		3
Remicade		45		49	-8								45		49		-8
Diabetes ⁽⁶⁾
Januvia		581		717	-19		328		332		-1		252		385		-34
Janumet		255		417	-39		43		90		-52		211		327		-35
Other Pharmaceutical ⁽⁷⁾		549		603	-9		197		194		2		353		410		-14
ANIMAL HEALTH		1,400		1,371	2		462		475		-3		938		896		5
Livestock		874		829	5		205		186		10		669		643		4
Companion Animal		526		542	-3		257		289		-11		269		253		6
Other Revenues ⁽⁸⁾		299		625	-52		100		227		-56		199		398		-50

*200% or greater

N/M - Not Meaningful

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 $4,002 million in the third quarter of 2023 and $3,552 million in the third 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 $924 million in the third quarter of 2023 and $1,231 million in the third 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 $65 million in the third quarter of 2023 and $10 million in the third quarter of 2022.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SEPTEMBER YEAR-TO-DATE 2023

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	Global					U.S.						International
	Sep YTD 2023		Sep YTD 2022		% Change	Sep YTD 2023		Sep YTD 2022		% Change		Sep YTD 2023		Sep YTD 2022		% Change
TOTAL SALES ⁽¹⁾	$	45,485	$	45,453	-	$	21,393	$	20,927		2	$	24,092	$	24,526		-2
PHARMACEUTICAL		40,442		39,826	2		19,840		19,119		4		20,602		20,707		-1
Oncology
Keytruda		18,403		15,487	19		11,142		9,307		20		7,261		6,180		17
Alliance Revenue – Lynparza ⁽²⁾		884		825	7		439		427		3		445		397		12
Alliance Revenue – Lenvima ⁽²⁾		734		660	11		476		426		12		258		235		10
Welireg		146		83	77		141		83		70		6				-
Alliance Revenue – Reblozyl ⁽³⁾		142		124	14		108		87		24		33		37		-10
Vaccines ⁽⁴⁾
Gardasil / Gardasil 9		7,015		5,428	29		1,718		1,803		-5		5,297		3,624		46
ProQuad / M-M-R II / Varivax		1,823		1,716	6		1,435		1,337		7		388		379		2
RotaTeq		584		644	-9		381		427		-11		203		218		-7
Vaxneuvance		488		32	*		423		31		*		65		1		*
Pneumovax 23		327		457	-28		105		280		-63		223		177		26
Vaqta		151		134	12		91		72		25		60		62		-3
Hospital Acute Care
Bridion		1,413		1,244	14		841		665		27		572		579		-1
Prevymis		430		310	39		186		136		37		244		174		40
Dificid		215		196	10		199		184		8		16		12		33
Primaxin		174		185	-6		2		1		69		173		185		-6
Noxafil		167		180	-7		29		39		-26		138		141		-2
Zerbaxa		157		120	31		86		64		33		71		55		29
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁵⁾		259		258	-		249		244		2		10		14		-28
Adempas ⁽⁶⁾		189		181	5								189		181		5
Virology
Lagevrio		1,236		4,859	-75				1,523		-100		1,236		3,336		-63
Isentress / Isentress HD		377		466	-19		165		196		-16		212		270		-21
Neuroscience
Belsomra		176		199	-11		60		60		-		117		139		-16
Immunology
Simponi		539		540	-								539		540		-
Remicade		144		163	-12								144		163		-12
Diabetes ⁽⁷⁾
Januvia		1,642		2,252	-27		842		958		-12		800		1,294		-38
Janumet		937		1,347	-30		182		258		-30		755		1,089		-31
Other Pharmaceutical ⁽⁸⁾		1,690		1,736	-3		540		511		6		1,147		1,225		-6
ANIMAL HEALTH		4,347		4,320	1		1,418		1,425		-1		2,929		2,894		1
Livestock		2,530		2,486	2		543		521		4		1,987		1,965		1
Companion Animal		1,817		1,834	-1		875		904		-3		942		929		1
Other Revenues ⁽⁹⁾		696		1,307	-47		135		383		-65		561		925		-39

*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 $10,692 million and $8,743 million on a global share basis for September 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 $2,826 million and $3,836 million on a global share basis for September 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 $118 million and $156 million on a global share basis for September YTD 2023 and 2022, respectively.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

	2023												2022																		% Change
	1Q			2Q			3Q			Sep YTD			1Q			2Q			3Q			Sep YTD			4Q			Full Year			3Q		Sep YTD
TOTAL PHARMACEUTICAL	$	12,721		$	13,457		$	14,263		$	40,442		$	14,107		$	12,756		$	12,963		$	39,826		$	12,180		$	52,005			10		2
United States		6,117			6,570			7,153			19,840			6,773			5,726			6,620			19,119			5,871			24,989			8		4
% Pharmaceutical Sales		48.1	%		48.8	%		50.1	%		49.1	%		48.0	%		44.9	%		51.1	%		48.0	%		48.2	%		48.1	%
Europe ⁽¹⁾		2,326			2,401			2,497			7,224			3,309			2,677			2,427			8,412			2,494			10,906			3		-14
% Pharmaceutical Sales		18.3	%		17.8	%		17.5	%		17.9	%		23.5	%		21.0	%		18.7	%		21.1	%		20.5	%		21.0	%
China		1,694			1,887			1,674			5,255			1,113			1,355			1,419			3,887			1,216			5,102			18		35
% Pharmaceutical Sales		13.3	%		14.0	%		11.7	%		13.0	%		7.9	%		10.6	%		10.9	%		9.8	%		10.0	%		9.8	%
Japan		737			652			1,062			2,451			965			1,092			653			2,710			832			3,542			63		-10
% Pharmaceutical Sales		5.8	%		4.8	%		7.4	%		6.1	%		6.8	%		8.6	%		5.0	%		6.8	%		6.8	%		6.8	%
Asia Pacific (other than China and Japan)		703			705			636			2,045			786			854			702			2,342			691			3,034			-9		-13
% Pharmaceutical Sales		5.5	%		5.2	%		4.5	%		5.1	%		5.6	%		6.7	%		5.4	%		5.9	%		5.7	%		5.8	%
Latin America		470			566			696			1,731			435			453			511			1,399			472			1,871			36		24
% Pharmaceutical Sales		3.7	%		4.2	%		4.9	%		4.3	%		3.1	%		3.6	%		3.9	%		3.5	%		3.9	%		3.6	%
Eastern Europe/Middle East/Africa		381			370			301			1,052			450			339			360			1,149			320			1,469			-16		-8
% Pharmaceutical Sales		3.0	%		2.7	%		2.1	%		2.6	%		3.2	%		2.7	%		2.8	%		2.9	%		2.6	%		2.8	%
Canada		141			127			133			401			189			166			166			521			158			678			-20		-23
% Pharmaceutical Sales		1.1	%		0.9	%		0.9	%		1.0	%		1.3	%		1.3	%		1.3	%		1.3	%		1.3	%		1.3	%
Other		152			179			111			443			87			94			105			287			126			414			6		54
% Pharmaceutical Sales		1.2	%		1.6	%		0.9	%		0.9	%		0.6	%		0.6	%		0.9	%		0.7	%		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

		3Q23			3Q22			Sep YTD 2023			Sep YTD 2022
Interest income	$	(73	)	$	(40	)	$	(295	)	$	(62	)
Interest expense		317			244			836			727
Exchange losses		85			96			208			220
Loss (income) from investments in equity securities, net ⁽¹⁾		33			371			(240	)		1,361
Net periodic defined benefit plan (credit) cost other than service cost		(138	)		(60	)		(364	)		(208	)
Other, net		(98	)		(182	)		243			(462	)
Total	$	126		$	429		$	388		$	1,576

⁽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.