10-Q 1 y42580e10-q.txt MERCK & CO., INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- --------- Commission File No. 1-3305 MERCK & CO., INC. P. O. Box 100 One Merck Drive Whitehouse Station, N.J. 08889-0100 (908) 423-1000 Incorporated in New Jersey I.R.S. Employer Identification No. 22-1109110 The number of shares of common stock outstanding as of the close of business on October 31, 2000: Class Number of Shares Outstanding ----- ---------------------------- Common Stock 2,306,135,098 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 2 Part I - Financial Information MERCK & CO., INC. AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENT OF INCOME THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (Unaudited, $ in millions except per share amounts)
Three Months Nine Months Ended September 30 Ended September 30 ------------------------------ ---------------------------- 2000 1999 2000 1999 ------------ ------------ ---------- ---------- Sales $ 10,567.5 $ 8,195.7 $ 28,895.9 $ 23,750.6 Costs, Expenses and Other Materials and production 5,952.5 4,365.9 15,872.9 12,890.2 Marketing and administrative 1,512.8 1,272.7 4,393.5 3,611.3 Research and development 609.8 516.0 1,681.5 1,440.5 Acquired Research - 51.1 - 51.1 Equity income from affiliates (219.4) (227.1) (619.5) (581.5) Other (income) expense, net 70.2 (17.6) 254.5 (69.1) --------- -------- --------- --------- 7,925.9 5,961.0 21,582.9 17,342.5 --------- -------- --------- --------- Income Before Taxes 2,641.6 2,234.7 7,313.0 6,408.1 Taxes on Income 805.7 695.1 2,255.7 2,090.8 --------- -------- --------- --------- Net Income $ 1,835.9 $ 1,539.6 $ 5,057.3 $ 4,317.3 ========= ======== ========= ========= Basic Earnings per Common Share $ .80 $ .65 $ 2.19 $ 1.83 Earnings per Common Share Assuming Dilution $ .78 $ .64 $ 2.15 $ 1.79 Dividends Declared per Common Share $ .34 $ .29 $ .92 $ .83
The accompanying notes are an integral part of this consolidated financial statement. - 1 - 3 MERCK & CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (Unaudited, $ in millions)
September 30 December 31 2000 1999 ------------ ----------- ASSETS Current Assets Cash and cash equivalents $ 1,535.1 $ 2,021.9 Short-term investments 1,300.0 1,180.5 Accounts receivable 4,571.3 4,089.0 Inventories 3,099.9 2,846.9 Prepaid expenses and taxes 1,094.1 1,120.9 --------- --------- Total current assets 11,600.4 11,259.2 --------- --------- Investments 5,284.2 4,761.5 Property, Plant and Equipment, at cost, net of allowance for depreciation of $5,167.6 in 2000 and $4,670.3 in 1999 10,922.4 9,676.7 Goodwill and Other Intangibles, net of accumulated amortization of $1,759.7 in 2000 and $1,488.7 in 1999 7,458.4 7,584.2 Other Assets 2,742.2 2,353.3 --------- --------- $38,007.6 $35,634.9 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $ 4,049.0 $ 4,158.7 Loans payable and current portion of long-term debt 3,174.5 2,859.0 Income taxes payable 914.0 1,064.1 Dividends payable 782.0 677.0 --------- --------- Total current liabilities 8,919.5 8,758.8 --------- --------- Long-Term Debt 3,437.6 3,143.9 --------- --------- Deferred Income Taxes and Noncurrent Liabilities 7,115.3 7,030.1 --------- --------- Minority Interests 5,015.2 3,460.5 --------- --------- Stockholders' Equity Common stock Authorized - 5,400,000,000 shares Issued - 2,968,224,837 shares - September 30, 2000 - 2,968,030,509 shares - December 31, 1999 29.7 29.7 Other paid-in capital 6,035.0 5,920.5 Retained earnings 26,384.2 23,447.9 Accumulated other comprehensive income 14.7 8.1 --------- --------- 32,463.6 29,406.2 Less treasury stock, at cost 670,499,132 shares - September 30, 2000 638,953,059 shares - December 31, 1999 18,943.6 16,164.6 --------- --------- Total stockholders' equity 13,520.0 13,241.6 --------- --------- $38,007.6 $35,634.9 ========= =========
The accompanying notes are an integral part of this consolidated financial statement. - 2 - 4 MERCK & CO., INC. AND SUBSIDIARIES INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (Unaudited, $ in millions)
Nine Months Ended September 30 ------------------------------ 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Income before taxes $ 7,313.0 $ 6,408.1 Adjustments to reconcile income before taxes to cash provided from operations before taxes: Acquired research - 51.1 Depreciation and amortization 961.6 862.5 Other (130.2) (561.9) Net changes in assets and liabilities (805.5) (300.5) ---------- ---------- CASH PROVIDED BY OPERATING ACTIVITIES BEFORE TAXES 7,338.9 6,459.3 INCOME TAXES PAID (1,852.3) (1,669.0) ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 5,486.6 4,790.3 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (1,910.3) (1,739.6) Purchase of securities, subsidiaries and other investments (18,073.1) (31,198.7) Proceeds from sale of securities, subsidiaries and other investments 17,126.2 29,395.2 Proceeds from relinquishment of certain AstraZeneca product rights 93.6 1,679.9 Other (20.8) (13.6) ---------- ---------- NET CASH USED BY INVESTING ACTIVITIES (2,784.4) (1,876.8) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Net change in short-term borrowings 599.5 979.1 Proceeds from issuance of debt 300.7 11.6 Payments on debt (442.8) (16.6) Proceeds from issuance of preferred units of subsidiary 1,500.0 - Purchase of treasury stock (3,263.9) (2,605.7) Dividends paid to stockholders (2,016.0) (1,911.4) Other 208.9 147.0 ---------- ---------- NET CASH USED BY FINANCING ACTIVITIES (3,113.6) (3,396.0) ---------- ---------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (75.4) (20.3) ---------- ---------- NET DECREASE IN CASH AND CASH EQUIVALENTS (486.8) (502.8) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,021.9 2,606.2 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,535.1 $ 2,103.4 ========== ==========
The accompanying notes are an integral part of this consolidated financial statement. Notes to Consolidated Financial Statements 1. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements are not included herein. The interim statements should be read in conjunction with the financial statements and notes thereto included in the Company's latest Annual Report on Form 10-K. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the full year 2000; in the Company's opinion, all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. Certain reclassifications have been made to prior year amounts to conform with current year presentation. - 3 - 5 Notes to Consolidated Financial Statements (continued) ------------------------------------------ 2. Inventories consisted of:
($ in millions) ---------------------------------- September 30 December 31 2000 1999 -------------- -------------- Finished goods $1,976.2 $1,895.6 Raw materials and work in process 1,042.7 869.8 Supplies 81.0 81.5 -------- -------- Total (approximates current cost) 3,099.9 2,846.9 Reduction to LIFO cost - - -------- -------- $3,099.9 $2,846.9 ======== ========
3. In March 2000, a wholly-owned subsidiary of the Company issued $1.5 billion par value of variable rate preferred units. The units are redeemable at par value plus accrued dividends at the option of the issuer at any time. They are also redeemable at the option of the holders in March 2010, and at the end of each five-year interval, thereafter. The preferred units are included in Minority interests in the consolidated financial statements. 4. The Company, along with numerous other defendants, is a party in several antitrust actions brought by retail pharmacies and consumers, alleging conspiracies in restraint of trade and challenging pricing and/or purchasing practices, one of which has been certified as a federal class action and a number of which have been certified as state class actions. In 1996, the Company and several other defendants finalized an agreement to settle the federal class action alleging conspiracy, which represents the single largest group of retail pharmacy claims, pursuant to which the Company paid $51.8 million. Since that time, the Company has entered into other settlements on satisfactory terms. The Company has not engaged in any conspiracy, and no admission of wrongdoing was made nor was included in the final agreements. While it is not feasible to predict or determine the final outcome of these proceedings, management does not believe that they should result in a materially adverse effect on the Company's financial position, results of operations or liquidity. 5. Sales consisted of:
($ in millions) ------------------------------------------------ Three Months Nine Months Ended September 30 Ended September 30 --------------------- --------------------- 2000 1999 2000 1999 --------- -------- --------- --------- Elevated cholesterol $ 1,493.4 $1,273.7 $ 4,216.8 $ 3,684.1 Hypertension/heart failure 1,175.3 1,070.3 3,515.5 3,362.6 Anti-inflammatory/analgesics 635.4 136.3 1,524.2 286.2 Osteoporosis 360.0 280.7 959.6 755.3 Vaccines/biologicals 283.1 252.9 730.7 645.8 Respiratory 234.7 129.8 614.8 330.4 Anti-ulcerants 190.8 224.3 612.9 676.4 Antibiotics 181.8 189.0 579.7 565.8 Ophthalmologicals 163.6 162.3 484.9 476.4 Human immunodeficiency virus (HIV) 139.3 169.8 411.3 495.6 Other Merck products 309.6 502.1 1,170.7 1,334.0 Merck-Medco 5,400.5 3,804.5 14,074.8 11,138.0 --------- -------- --------- --------- $10,567.5 $8,195.7 $28,895.9 $23,750.6 ========= ======== ========= =========
Other Merck products include sales of other human pharmaceuticals, continuing sales to divested businesses and pharmaceutical and animal health supply sales to the Company's joint ventures and AstraZeneca LP. - 4 - 6 Notes to Consolidated Financial Statements (continued) 6. Other (income) expense, net, consisted of:
($ in millions) ------------------------------------------------------ Three Months Nine Months Ended September 30 Ended September 30 ----------------------- -------------------------- 2000 1999 2000 1999 ------- ------- ------- ------- Interest income $(124.8) $ (95.2) $(326.4) $(264.1) Interest expense 121.8 79.0 355.1 219.3 Exchange (gains) losses, net (14.3) (20.9) (31.8) (18.8) Minority interests 74.8 61.8 230.8 168.5 Amortization of goodwill and other intangibles 80.8 77.8 238.2 239.0 Other, net (68.1) (120.1) (211.4) (413.0) ------- ------- ------- ------- $ 70.2 $ (17.6) $ 254.5 $ (69.1) ======= ======= ======= =======
Minority interests include third parties' share of exchange gains and losses arising from translation of the financial statements into U.S. dollars. Interest paid for the nine-month periods ended September 30, 2000 and 1999 was $361.9 million and $205.4 million, respectively. 7. Income taxes paid for the nine-month periods ended September 30, 2000 and 1999 were $1,852.3 million and $1,669.0 million, respectively. 8. The net income effect of dilutive securities was not significant to the Company's calculation of Earnings per common share assuming dilution. A reconciliation of weighted average common shares outstanding to weighted average common shares outstanding assuming dilution follows:
($ in millions) ------------------------------------------ Three Months Nine Months Ended September 30 Ended September 30 --------------------- ------------------ 2000 1999 2000 1999 ------- ------- ------- ------- Average common shares outstanding 2,299.4 2,343.0 2,306.7 2,353.6 Common shares issuable(1) 43.5 51.4 44.9 56.5 ------- ------- ------- ------- Average common shares outstanding assuming dilution 2,342.9 2,394.4 2,351.6 2,410.1 ======= ======= ======= ======= (1) Issuable primarily under stock option plans.
9. Comprehensive income for the three months ended September 30, 2000 and 1999 was $1,856.8 million and $1,573.0 million, respectively. Comprehensive income for the nine months ended September 30, 2000 and 1999 was $5,063.9 million and $4,348.4 million, respectively. - 5 - 7 Notes to Consolidated Financial Statements (continued) 10. The Company's operations are principally managed on a products and services basis and are comprised of two reportable segments: Merck Pharmaceutical and Merck-Medco. Merck Pharmaceutical products consist of therapeutic agents, sold by prescription, for the treatment of human disorders. Merck-Medco revenues are derived from the filling and management of prescriptions and health management programs. All Other includes non-reportable human and animal health segments. Revenues and profits for these segments are as follows:
($ in millions) --------------------------------------------------------------- Three Months Nine Months Ended September 30 Ended September 30 ---------------------------- --------------------------- 2000 1999 2000 1999 ------------ ----------- ----------- ---------- Segment revenues: Merck Pharmaceutical $ 4,183.1 $ 3,524.6 $ 11,987.6 $ 10,410.3 Merck-Medco 6,244.6 4,504.4 16,382.1 13,234.1 All Other 979.1 826.2 2,748.8 2,068.7 ------------ ----------- ----------- ---------- $ 11,406.8 $ 8,855.2 $ 31,118.5 $ 25,713.1 ============ =========== =========== ========== Segment profits: Merck Pharmaceutical $ 2,492.6 $ 2,111.6 $ 6,952.6 $ 6,306.7 Merck-Medco 179.0 146.0 471.5 397.4 All Other 918.7 800.2 2,564.1 1,933.6 ------------ ----------- ----------- ---------- $ 3,590.3 $ 3,057.8 $ 9,988.2 $ 8,637.7 ============ =========== =========== ==========
Segment profits are comprised of segment revenues less certain elements of materials and production costs and operating expenses, including components of equity income (loss) from joint ventures and depreciation and amortization expenses. The Company does not internally allocate the vast majority of indirect production costs, research and development expenses and general and administrative expenses, all predominantly related to the Merck pharmaceutical business, as well as the cost of financing these activities. Separate divisions maintain responsibility for monitoring and managing these costs, including depreciation related to fixed assets utilized by these divisions and, therefore, they are not included in the marketing segment profits. The vast majority of goodwill and other intangibles amortization, predominantly related to the Merck-Medco business, as well as the cost of financing capital employed, also are not allocated internally and, therefore, are not included in the marketing segment profits. A reconciliation of total segment profits to consolidated income before taxes is as follows:
($ in millions) ------------------------------------------------------------------- Three Months Nine Months Ended September 30 Ended September 30 ------------------------------ -------------------------------- 2000 1999 2000 1999 ------------ -------------- ------------- -------------- Segment profits $ 3,590.3 $ 3,057.8 $ 9,988.2 $ 8,637.7 Other profits (4.6) 17.8 25.7 63.2 Adjustments 143.3 57.5 392.7 146.2 Unallocated: Interest income 124.8 95.2 326.4 264.1 Interest expense (121.8) (79.0) (355.1) (219.3) Equity income from affiliates 70.2 59.9 219.4 205.5 Depreciation and amortization (244.6) (223.1) (743.3) (678.5) Acquired research - (51.1) - (51.1) Research and development (609.8) (516.0) (1,681.5) (1,440.5) Other expenses, net (306.2) (184.3) (859.5) (519.2) ------------ ------------- ------------- -------------- $ 2,641.6 $ 2,234.7 $ 7,313.0 $ 6,408.1 ============ ============= ============= ==============
Other profits primarily represent operating income related to divested products or businesses. Adjustments represent the elimination of the effect of double counting certain items of income and expense. Equity income from affiliates includes taxes paid at the joint venture level and a portion of equity income that is not reported in segment profits. Other expenses, net, include expenses from corporate and manufacturing cost centers and other miscellaneous income (expense), net. 11. Legal proceedings to which the Company is a party are discussed in Part 1 Item 3, Legal Proceedings, in the 1999 Annual Report on Form 10-K. There were no material developments in the nine-month period ended September 30, 2000. - 6 - 8 MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION Earnings per share for the third quarter of 2000 were $0.78, up 22% over the third quarter of 1999. For the quarter, net income increased 19% to $1,835.9 million driven by sales of $10.6 billion, up 29% over the same period last year. For the first nine months, earnings per share were $2.15, an increase of 20% over 1999. Net income grew 17% to $5,057.3 million, fueled by a 22% sales increase to $28.9 billion for the first nine months of 2000. Income growth for the quarter and first nine months reflects strong sales volume gains in the U.S. and international markets, as well as manufacturing productivity improvements. These gains helped fund research and development and promotion programs in support of the Company's key products. Sales volume growth was driven by the Company's human health products, which increased 19% and 18% for the third quarter and nine months, respectively, and the Merck-Medco Managed Care business. Sales outside of the United States accounted for 37% of the Company's human health sales for the first nine months. Foreign exchange reduced the human health sales growth for both the third quarter and first nine months by one percentage point. The Company's newest medicine, 'Vioxx', together with 'Zocor', 'Cozaar'/'Hyzaar'*, 'Fosamax', and 'Singulair' are driving Merck's strong performance. These products accounted for 55% of Merck's worldwide human health sales for the first nine months. More than 15 million prescriptions in the United States alone have been written for 'Vioxx', Merck's new medicine for osteoarthritis, since its successful launch last year, and it continues as the world's fastest growing prescription arthritis medicine. 'Vioxx' has now achieved nearly $1.5 billion in sales so far this year - more than $600 million in this quarter alone. A key reason for its success is that 'Vioxx' is the only COX-2 inhibitor approved by the U.S. Food and Drug Administration (FDA) both for osteoarthritis and acute pain. A pilot study in osteoarthritis comparing 'Vioxx' and celecoxib, a competitive product, presented at the European League Against Rheumatism in June, showed that 'Vioxx' reduced osteoarthritis pain at night and at rest to a greater degree than either celecoxib 200 mg or acetaminophen 4,000 mg. In June, Merck submitted a Supplemental New Drug Application for 'Vioxx' to the FDA to request labeling changes based on the results of the 8,000-patient 'Vioxx' Gastrointestinal Outcomes Research (VIGOR) study. In this study, 'Vioxx' reduced the incidence of serious gastrointestinal side effects, such as ulcers and bleeding, by more than 50% compared to the nonsteroidal anti-inflammatory drug naproxen. Clinical programs are underway to explore other potential benefits for 'Vioxx', including the treatment of chronic pain, rheumatoid arthritis and in the prevention and treatment of Alzheimer's disease. Merck has also begun studies to investigate whether 'Vioxx' can reduce the number of colon polyps in patients who suffer from them - a broad population at risk of developing colon cancer. Global sales of 'Zocor', Merck's cholesterol-modifying medicine, continue to show strong growth. Worldwide sales reached nearly $1.4 billion for the third quarter, up 18% over the same period in 1999. This performance continues to reflect physician confidence in the product's ability to manage all key lipids to save the lives of people with heart disease and high cholesterol. In the United States, the market for "statin" medicines continues to expand at about 20% a year. Opportunities for growth still remain because only about 40% of Americans with heart disease take a prescription cholesterol-lowering medicine. 'Cozaar' and 'Hyzaar' for high blood pressure are the world's most widely prescribed medicines in the angiotensin II antagonist class. Growth continues as physicians recognize the excellent efficacy and tolerability of these two products. That fact is reflected in $405 million in sales for this quarter, a 16% increase over 1999 third quarter sales. The Company has a number of trials underway to evaluate the medicines' effectiveness in improving survival and reducing disability associated with hypertension, diabetic kidney disease and recent heart attacks. * 'Cozaar' and 'Hyzaar' are registered trademarks of E.I. du Pont de Nemours and Company, Wilmington, DE, USA. - 7 - 9 MANAGEMENT'S ANALYSIS OF INTERIM FINANCIAL INFORMATION (continued) 'Fosamax', the leading product worldwide for treatment of postmenopausal osteoporosis, is available in more than 100 countries and continues to show outstanding growth. Sales totaled $360 million this quarter, 29% over the same quarter in 1999. In response to customer preferences, the Company has submitted applications to regulatory agencies worldwide seeking approval for an innovative once-weekly formulation. This novel dosage form, which received U.S. FDA approval in October, has already been launched in a number of smaller markets around the world and has gained rapid acceptance by patients and physicians. The Company also received FDA approval in September to market 'Fosamax' to increase bone mass in men with osteoporosis. 'Singulair', Merck's nonsteroidal oral asthma controller drug, had the most successful launch of any asthma medicine in history and continues to show strong growth in all markets in which it has been introduced. Sales for this quarter were $235 million, up 81% compared to the same quarter in 1999. 'Singulair' is now the most prescribed asthma controller therapy among U.S. pediatricians and allergists. 'Singulair' effectively helps control asthma and is a convenient, nonsteroidal, once-a-day tablet. Regulatory approvals for use of 'Singulair' in asthmatic children ages two to five have been received in the United States and several countries in Latin America and approvals are pending in countries worldwide. Therapeutic choices to treat asthma in this difficult-to-treat age group have been limited in the past, due in part to the difficulty of administering inhaled therapies to young children and parental concerns about steroidal medications. Merck-Medco Managed Care, L.L.C. (Merck-Medco), the nation's largest provider of pharmacy services, continues to grow rapidly. More clients than ever are ordering prescriptions through merckmedco.com, the world's leading online pharmacy. The site processed a record 100,000 prescriptions per week in September. Merckmedco.com now fills more prescriptions than all of the other online pharmacies combined. Merck-Medco has grown significantly this year, gaining new clients from two important sources: five million people through the June acquisition of the pharmacy benefits manager ProVantage, and nine million out of the ten million people served by the UnitedHealth Group. Merck-Medco expects to integrate the remaining one million UnitedHealth Group plan members in the near future. In June 1998, the Financial Accounting Standards Board (FASB) issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133). The Statement established accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability measured at fair value and that changes in fair value be recognized currently in earnings, unless specific hedge accounting criteria are met. In June 1999, the FASB issued Statement No. 137, Accounting for Derivative Instruments and Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133, which delayed the Company's required adoption of FAS 133 to January 1, 2001. The Company will adopt the Statement at that time. In June 2000, the FASB issued Statement No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment of FAS 133, which is effective concurrently with FAS 133. The Company continues to perform extensive analysis of the Statements; however, the ultimate effect on the Company's financial position or results of operations cannot yet be determined. - 8 - 10 CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS This report and other written reports and oral statements made from time to time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. One can identify these forward-looking statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects" and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results, product approvals and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. The Company does not assume the obligation to update any forward-looking statement. One should carefully evaluate such statements in light of factors described in the Company's filings with the Securities and Exchange Commission, especially on Forms 10-K, 10-Q and 8-K (if any). In Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1999, as filed on March 22, 2000, the Company discusses in more detail various important factors that could cause actual results to differ from expected or historic results. The Company notes these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. One should understand that it is not possible to predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties. - 9 - 11 Part II - Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits
Number Description Method of Filing ------ ----------- ----------------- 3(a) Restated Certificate of Filed with this document Incorporation of Merck & Co., Inc. (September 1, 2000) 3(b) By-Laws of Merck & Co., Inc. Incorporated by reference to Form 10-Q (as amended effective Quarterly Report for the period ended February 25, 1997) March 31, 1997 12 Computation of Ratios of Filed with this document Earnings to Fixed Charges 27 Financial Data Schedule Filed with this document
(b) Reports on Form 8-K During the three-month period ending September 30, 2000, no current reports on Form 8-K were filed. - 10 - 12 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MERCK & CO., INC. Date: November 9, 2000 /s/ Kenneth C. Frazier ---------------------- KENNETH C. FRAZIER Senior Vice President and General Counsel Date: November 9, 2000 /s/ Richard C. Henriques ------------------------ RICHARD C. HENRIQUES Vice President, Controller - 11 - 13 EXHIBIT INDEX
Exhibits -------- Number Description ------ ----------- 3(a) Restated Certificate of Incorporation of Merck & Co., Inc. (September 1, 2000) 3(b) By-Laws of Merck & Co., Inc. (as amended effective February 25, 1997) - Incorporated by reference to Form 10-Q Quarterly Report for the period ended March 31, 1997 12 Computation of Ratios of Earnings to Fixed Charges 27 Financial Data Schedule