Certain supplemental information not included in the press release

EX-99.2 3 d287017dex992.htm CERTAIN SUPPLEMENTAL INFORMATION NOT INCLUDED IN THE PRESS RELEASE Certain supplemental information not included in the press release

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a


	2011															2010															% Change
	1Q			2Q			3Q			4Q			Full Year			1Q			2Q			3Q			4Q			Full Year			4Q			Full Year
Sales	$	11,580		$	12,151		$	12,022		$	12,294		$	48,047		$	11,422		$	11,346		$	11,125		$	12,094		$	45,987			2	%		4	%

Costs, Expenses and Other
Materials and production		4,059			4,284			4,352			4,176			16,871			5,216			4,549			4,191			4,440			18,396			-6	%		-8	%
Marketing and administrative ⁽¹⁾		3,164			3,525			3,340			3,704			13,733			3,222			3,175			3,192			3,537			13,125			5	%		5	%
Research and development ⁽¹⁾		2,158			1,936			1,954			2,419			8,467			2,051			2,179			2,322			4,559			11,111			-47	%		-24	%
Restructuring costs		(14	)		668			119			533			1,306			288			526			50			121			985			*			33	%
Equity income from affiliates		(138	)		(55	)		(161	)		(257	)		(610	)		(138	)		(43	)		(236	)		(171	)		(587	)		50	%		4	%
Other (income) expense, net		622			121			66			139			946			167			(281	)		1,108			309			1,304			-55	%		-27	%

Income (Loss) Before Taxes		1,729			1,672			2,352			1,580			7,334			616			1,241			498			(701	)		1,653			*			*
Income Tax Provision (Benefit)		658			(382	)		628			37			942			286			461			126			(201	)		671
Net Income (Loss)		1,071			2,054			1,724			1,543			6,392			330			780			372			(500	)		982			*			*
Less: Net Income Attributable to Noncontrolling Interests		28			30			32			31			120			31			28			30			31			121
Net Income (Loss) Attributable to Merck & Co., Inc.	$	1,043		$	2,024		$	1,692		$	1,512		$	6,272		$	299		$	752		$	342		$	(531	)	$	861			*			*
Earnings (Loss) per Common Share Assuming Dilution	$	0.34		$	0.65		$	0.55		$	0.49		$	2.02		$	0.09		$	0.24		$	0.11		$	(0.17	)	$	0.28			*			*
Average Shares Outstanding Assuming Dilution		3,104			3,110			3,091			3,069			3,094			3,141			3,125			3,102			3,081			3,120
Tax Rate		38.1	%		-22.8	%		26.7	%		2.3	%		12.8	%		46.4	%		37.1	%		25.3	%		28.7	%		40.6	%

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

*100% or greater

(1)	Amounts in 2010 include a reclassification of certain expenses from marketing and administrative to research and development of $24 million, $28 million, $26 million, $42 million and $120 million in 1Q, 2Q, 3Q, 4Q and full year, respectively.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

FOURTH QUARTER 2010

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c


	GAAP			Acquisition- Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			Certain Other Items		Adjustment Subtotal			Non-GAAP
Sales	$	12,094										$	—		$	12,094

Materials and production		4,440			1,206			105					1,311			3,129

Marketing and administrative		3,537			160			13					173			3,364

Research and development		4,559			2,225			115					2,340			2,219

Restructuring costs		121						121					121			—

Equity income from affiliates		(171	)										—			(171	)

Other (income) expense, net		309											—			309

(Loss) Income Before Taxes		(701	)		(3,591	)		(354	)		—		(3,945	)		3,244

Taxes on Income		(201	)										(658	) ⁽³⁾		457

Net (Loss) Income		(500	)										(3,287	)		2,787

Less: Net Income Attributable to Noncontrolling Interests		31											—			31

Net (Loss) Income Attributable to Merck & Co., Inc.	$	(531	)									$	(3,287	)	$	2,756

(Loss) Earnings per Common Share Assuming Dilution	$	(0.17	)												$	0.88	⁽⁴⁾

Average Shares Outstanding Assuming Dilution		3,081														3,106

Tax Rate		28.7	%													14.1	%

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 expenses represent in-process research and development (“IPR&D”) impairment charges, including a $1.7 billion charge to write-down the intangible asset related to vorapaxar.

⁽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⁾	Represents the estimated tax impact on the reconciling items.

⁽⁴⁾

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 $2,746 million for the fourth quarter of 2010.

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

FULL YEAR 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	$	45,987											$	—		$	45,987

Materials and production		18,396			6,566			430						6,996			11,400

Marketing and administrative		13,125			379			143						522			12,603

Research and development		11,111			2,441			428						2,869			8,242

Restructuring costs		985						985						985			—

Equity income from affiliates		(587	)											—			(587	)

Other (income) expense, net		1,304			17						507			524			780

Income Before Taxes		1,653			(9,403	)		(1,986	)		(507	)		(11,896	)		13,549

Taxes on Income		671												(2,042	) ⁽⁴⁾		2,713

Net Income		982												(9,854	)		10,836

Less: Net Income Attributable to Noncontrolling Interests		121												—			121

Net Income Attributable to Merck & Co., Inc.	$	861											$	(9,854	)	$	10,715

Earnings per Common Share Assuming Dilution	$	0.28														$	3.42	⁽⁵⁾

Average Shares Outstanding Assuming Dilution		3,120															3,120

Tax Rate		40.6	%														20.0	%

⁽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, including a $1.7 billion charge to write-down the intangible asset related to vorapaxar.

⁽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 $391 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

FOURTH QUARTER 2011

(AMOUNTS IN MILLIONS)

Table 3a


	Global						U.S.						International
	4Q11		4Q10		% Change		4Q11		4Q10		% Change		4Q11		4Q10		% Change
TOTAL SALES ⁽¹⁾	$	12,294	$	12,094		2	$	5,296	$	5,224		1	$	6,998	$	6,870		2

PHARMACEUTICAL ⁽²⁾		10,755		10,441		3		4,606		4,384		5		6,149		6,057		2

Cardiovascular
Zetia		640		629		2		327		329		-1		313		299		5
Vytorin		475		562		-16		213		296		-28		262		266		-2
Integrilin		57		63		-9		50		58		-13		7		5		31

Diabetes & Obesity
Januvia		960		675		42		503		425		18		457		250		83
Janumet		386		288		34		193		164		18		193		123		56

Diversified Brands
Cozaar / Hyzaar		427		415		3		20		9		*		407		406
Zocor		111		121		-8		8		12		-33		103		109		-5
Propecia		117		124		-6		36		39		-8		81		85		-5
Claritin Rx		74		86		-14								74		86		-14
Remeron		59		62		-5		1		1		14		58		61		-5
Vasotec / Vaseretic		58		64		-9								58		64		-9
Proscar		52		44		18		1		1		8		51		43		18

Infectious Disease
Isentress		387		313		24		193		164		18		194		149		30
PegIntron		175		198		-12		25		35		-28		150		163		-8
Cancidas		164		174		-6		12		17		-30		152		157		-3
Primaxin		119		158		-25		14		29		-50		104		130		-19
Invanz		110		113		-3		55		50		10		54		63		-13
Avelox		95		92		3		86		86		1		9		6		40
Noxafil		59		48		24		16		9		85		42		39		9
Crixivan / Stocrin		42		58		-28		1		2		-26		40		56		-28
Rebetol		36		54		-34								36		54		-34
Victrelis		87				*		58				*		29				*

Neurosciences & Ophthalmology
Maxalt		178		149		20		132		106		24		46		43		8
Cosopt / Trusopt		117		131		-11		4		5		-28		113		126		-10

Oncology
Temodar		230		266		-13		99		109		-10		132		157		-16
Emend		114		110		4		68		65		5		46		45		2
Intron A		51		54		-5		25		28		-10		26		26		1

Respiratory & Immunology
Singulair		1,461		1,349		8		957		838		14		504		511		-1
Remicade		511		710		-28								511		710		-28
Nasonex		325		303		7		163		146		12		161		157		3
Clarinex		129		138		-6		51		47		8		78		90		-14
Arcoxia		110		115		-4								110		115		-4
Simponi		61		42		45								61		42		45
Asmanex		57		53		7		51		47		8		6		6		4
Proventil		38		55		-31		35		53		-35		3		2		76
Dulera		37		6		*		36		6		*		1				*

Vaccines
Gardasil		274		221		24		202		157		29		72		64		13
ProQuad, M-M-R II and Varivax		276		285		-3		243		272		-11		33		13		*
RotaTeq		195		169		15		162		149		9		33		21		57
Pneumovax		222		156		43		137		115		18		86		40		*
Zostavax		78		107		-27		73		107		-32		5				*

Women’s Health & Endocrine
Fosamax		211		234		-10		8		25		-69		204		209		-3
NuvaRing		168		145		16		102		86		18		66		58		12
Follistim AQ		126		138		-9		42		40		4		84		98		-14
Implanon		74		71		3		33		24		39		40		47		-15
Cerazette		69		49		42								69		49		42

Other Pharmaceutical ⁽³⁾		953		1,044		-9		169		233		-28		784		811		-3

ANIMAL HEALTH		868		815		6		192		169		13		676		646		5

CONSUMER CARE ⁽²⁾		361		381		-5		225		232		-3		136		149		-8
Claritin OTC		92		103		-11		59		65		-10		33		38		-14

Other Revenues ⁽⁴⁾		310		457		-32		274		438		-38		37		19		97
Astra		256		302		-15		256		302		-15

*	100% or greater

⁽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 $62 million and $75 million on a global basis for fourth quarter 2011 and 2010, respectively.

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

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

FULL YEAR 2011

(AMOUNTS IN MILLIONS)

Table 3b


	Global						U.S.						International
	Full Year 2011		Full Year 2010		% Change		Full Year 2011		Full Year 2010		% Change		Full Year 2011		Full Year 2010		% Change
TOTAL SALES ⁽¹⁾	$	48,047	$	45,987		4	$	20,495	$	20,226		1	$	27,552	$	25,761		7


PHARMACEUTICAL ⁽²⁾		41,289		39,267		5		17,117		16,748		2		24,172		22,519		7

Cardiovascular
Zetia		2,428		2,297		6		1,223		1,227				1,205		1,070		13
Vytorin		1,882		2,014		-7		888		1,077		-18		994		938		6
Integrilin		230		266		-14		208		245		-15		22		20		7

Diabetes & Obesity
Januvia		3,324		2,385		39		1,824		1,563		17		1,499		822		82
Janumet		1,363		954		43		712		576		24		651		378		72

Diversified Brands
Cozaar / Hyzaar		1,663		2,104		-21		107		400		-73		1,555		1,705		-9
Zocor		456		468		-3		32		42		-22		423		426		-1
Propecia		447		447				134		148		-10		313		298		5
Claritin Rx		314		296		6								314		296		6
Remeron		241		223		8		6		7		-4		234		216		8
Vasotec / Vaseretic		231		255		-10								231		255		-10
Proscar		223		216		3		5		6		-17		218		210		4

Infectious Disease
Isentress		1,359		1,090		25		681		554		23		678		536		27
PegIntron		657		737		-11		71		98		-27		586		639		-8
Cancidas		640		611		5		44		61		-28		595		550		8
Primaxin		515		610		-16		87		123		-30		429		487		-12
Invanz		406		362		12		205		180		14		200		182		10
Avelox		322		316		2		288		296		-3		34		20		69
Noxafil		230		198		16		61		51		20		169		147		15
Crixivan / Stocrin		192		206		-7		5		8		-32		187		198		-6
Rebetol		174		221		-21		1		1		-13		173		220		-21
Victrelis		140				*		98				*		43				*

Neurosciences & Ophthalmology
Maxalt		639		550		16		451		378		19		187		173		9
Cosopt / Trusopt		477		484		-1		16		20		-19		461		464		-1

Oncology
Temodar		935		1,065		-12		396		403		-2		538		662		-19
Emend		419		378		11		239		230		4		180		147		22
Intron A		194		209		-7		97		114		-14		97		95		1

Respiratory & Immunology
Singulair		5,479		4,987		10		3,536		3,219		10		1,942		1,768		10
Remicade		2,667		2,714		-2								2,667		2,714		-2
Nasonex		1,286		1,219		5		604		639		-6		682		580		18
Clarinex		621		623				197		203		-3		424		420		1
Arcoxia		431		398		8								431		398		8
Simponi		264		97		*								264		97		*
Asmanex		206		208		-1		185		195		-5		21		13		63
Proventil		155		210		-26		145		202		-28		10		8		30
Dulera		96		8		*		94		8		*		2				*

Vaccines
Gardasil		1,209		988		22		880		722		22		329		266		24
ProQuad, M-M-R II and Varivax		1,202		1,378		-13		1,108		1,305		-15		94		73		29
RotaTeq		651		519		25		522		439		19		129		81		60
Pneumovax		498		376		33		350		296		18		148		80		85
Zostavax		332		243		37		320		243		32		12				*

Women’s Health & Endocrine
Fosamax		855		926		-8		45		93		-52		810		832		-3
NuvaRing		623		559		12		369		342		8		254		217		17
Follistim AQ		530		528				163		167		-2		367		361		2
Implanon		294		236		25		126		86		45		169		150		13
Cerazette		268		209		28								268		209		28

Other Pharmaceutical ⁽³⁾		3,521		3,879		-9		593		781		-24		2,928		3,098		-5

ANIMAL HEALTH		3,253		2,941		11		711		616		15		2,542		2,326		9

CONSUMER CARE ⁽²⁾		1,840		1,823		1		1,210		1,213				630		609		3
Claritin OTC		511		526		-3		363		379		-4		147		147

Other Revenues ⁽⁴⁾		1,666		1,956		-15		1,457		1,649		-12		208		307		-32
Astra		1,184		1,252		-5		1,184		1,252		-5

*	100% or greater

⁽¹⁾	Only select products are shown.

⁽²⁾

⁽³⁾	Includes Pharmaceutical products not individually shown above. Other Vaccine sales included in Other Pharmaceutical were $283 million and $282 million on a global basis for full year 2011 and 2010, respectively.

⁽⁴⁾	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


	1Q11			2Q11			3Q11			4Q11			Full Year			1Q10			2Q10			3Q10			4Q10			Full Year			% Change 4Q		% Change FY
TOTAL PHARMACEUTICAL	$	9,820		$	10,360		$	10,354		$	10,755		$	41,289		$	9,665		$	9,638		$	9,523		$	10,441		$	39,267			3		5


United States		3,907			4,088			4,515			4,606			17,117			4,072			4,026			4,265			4,384			16,748			5		2
% Pharmaceutical Sales		39.8	%		39.5	%		43.6	%		42.8	%		41.5	%		42.1	%		41.8	%		44.8	%		42.0	%		42.7	%

Europe ⁽¹⁾		2,587			2,827			2,588			2,621			10,623			2,810			2,631			2,342			2,677			10,459			-2		2
% Pharmaceutical Sales		26.3	%		27.3	%		25.0	%		24.4	%		25.7	%		29.1	%		27.3	%		24.6	%		25.6	%		26.6	%

Japan		1,164			1,104			1,114			1,327			4,709			811			902			855			1,077			3,645			23		29
% Pharmaceutical Sales		11.8	%		10.7	%		10.8	%		12.3	%		11.4	%		8.4	%		9.4	%		9.0	%		10.3	%		9.3	%

Latin America		700			743			667			747			2,857			659			696			699			778			2,832			-4		1
% Pharmaceutical Sales		7.1	%		7.2	%		6.4	%		6.9	%		6.9	%		6.8	%		7.2	%		7.3	%		7.5	%		7.2	%

Asia Pacific		699			779			763			736			2,977			561			622			618			702			2,503			5		19
% Pharmaceutical Sales		7.1	%		7.5	%		7.4	%		6.8	%		7.2	%		5.8	%		6.5	%		6.5	%		6.7	%		6.4	%

China		187			206			220			221			834			133			159			145			173			611			28		37

Eastern Europe/Middle East Africa		358			369			371			378			1,476			375			395			353			393			1,516			-4		-3
% Pharmaceutical Sales		3.6	%		3.6	%		3.6	%		3.5	%		3.6	%		3.9	%		4.1	%		3.7	%		3.8	%		3.9	%
Canada		360			399			285			279			1,323			337			328			374			364			1,403			-23		-6
% Pharmaceutical Sales		3.7	%		3.9	%		2.8	%		2.6	%		3.2	%		3.5	%		3.4	%		3.9	%		3.5	%		3.6	%
Other		45			51			51			61			208			40			37			17			67			161			-9		29
% Pharmaceutical Sales		0.5	%		0.5	%		0.5	%		0.6	%		0.5	%		0.4	%		0.4	%		0.2	%		0.6	%		0.4	%

⁽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

FOURTH QUARTER 2011

AMOUNTS IN MILLIONS

Table 4

EQUITY INCOME FROM AFFILIATES


	4Q11		4Q10			Full Year 2011		Full Year 2010
ASTRAZENECA LP	$	256	$	190		$	574	$	546
Other ⁽¹⁾		1		(19	)		36		41

TOTAL	$	257	$	171		$	610	$	587

⁽¹⁾	Primarily reflects results for Sanofi Pasteur MSD and Johnson & JohnsonºMerck Consumer Pharmaceuticals Company (“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.


	4Q11		4Q10		Full Year 2011		Full Year 2010
GARDASIL	$	70	$	106	$	253	$	350
FLU VACCINES		54		62		183		220
OTHER VIRAL VACCINES		28		27		105		93
ROTATEQ		12		9		44		42
HEPATITIS VACCINES		10		7		39		25
Other Vaccines		131		135		486		487

TOTAL SANOFI PASTEUR MSD SALES	$	305	$	346	$	1,110	$	1,217

OTHER (INCOME) EXPENSE, NET


	4Q11			4Q10			Full Year 2011			Full Year 2010
INTEREST INCOME	$	(61	)	$	(27	)	$	(199	)	$	(83	)
INTEREST EXPENSE		192			177			749			715
EXCHANGE LOSSES		41			130			143			214
Other, net ⁽¹⁾		(33	)		29			253			458

TOTAL	$	139		$	309		$	946		$	1,304

⁽¹⁾

Other, net for the full year of 2011 includes a charge of $500 million related to the resolution of the arbitration proceeding with Johnson & Johnson. Other, net for the full year of 2010 reflects a $950 million legal reserve and $443 million of income recognized upon AstraZeneca’s asset option exercise.