EX-99.2 3 tm244517d1_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			4Q			Full Year			1Q			2Q			3Q			4Q			Full Year			4Q			Full Year
Sales	$	14,487		$	15,035		$	15,962		$	14,630		$	60,115		$	15,901		$	14,593		$	14,959		$	13,830		$	59,283			6	%		1	%

Costs, Expenses and Other
Cost of sales		3,926			4,024			4,264			3,911			16,126			5,380			4,216			3,934			3,881			17,411			1	%		-7	%
Selling, general and administrative		2,479			2,702			2,519			2,804			10,504			2,323			2,512			2,520			2,687			10,042			4	%		5	%
Research and development		4,276			13,321			3,307			9,628			30,531			2,576			2,798			4,399			3,775			13,548			*			*
Restructuring costs		67			151			126			255			599			53			142			94			49			337			*			78	%
Other (income) expense, net		89			172			126			78			466			708			438			429			(75	)		1,501			*			-69	%
Income (Loss) Before Taxes		3,650			(5,335	)		5,620			(2,046	)		1,889			4,861			4,487			3,583			3,513			16,444			*			-89	%
Income Tax Provision (Benefit)		825			637			870			(821	)		1,512			554			538			330			495			1,918
Net Income (Loss)		2,825			(5,972	)		4,750			(1,225	)		377			4,307			3,949			3,253			3,018			14,526			*			-97	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests		4			3			5			1			12			(3	)		5			5			1			7
Net Income (Loss) Attributable to Merck & Co., Inc.	$	2,821		$	(5,975	)	$	4,745		$	(1,226	)	$	365		$	4,310		$	3,944		$	3,248		$	3,017		$	14,519			*			-97	%

Earnings (Loss) per Common Share Assuming Dilution ⁽¹⁾	$	1.11		$	(2.35	)	$	1.86		$	(0.48	)	$	0.14		$	1.70		$	1.55		$	1.28		$	1.18		$	5.71			*			-98	%

Average Shares Outstanding Assuming Dilution ⁽¹⁾		2,551			2,539			2,546			2,533			2,547			2,537			2,540			2,542			2,548			2,542
Tax Rate		22.6	%		-11.9	%		15.5	%		40.1	%		80.0	%		11.4	%		12.0	%		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 and fourth quarters 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.

FOURTH QUARTER AND FULL YEAR 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
Fourth Quarter
Cost of sales	$	3,881			482			38						520		$	3,361
Selling, general and administrative		2,687			39			20						59			2,628
Research and development		3,775			740									740			3,035
Restructuring costs		49						49						49			–
Other (income) expense, net		(75	)		(69	)					80			11			(86	)
Income Before Taxes		3,513			(1,192	)		(107	)		(80	)		(1,379	)		4,892
Income Tax Provision (Benefit)		495			(222	)⁽³⁾		(32	)⁽³⁾		(13	)⁽³⁾		(267	)		762
Net Income		3,018			(970	)		(75	)		(67	)		(1,112	)		4,130
Net Income Attributable to Merck & Co., Inc.		3,017			(970	)		(75	)		(67	)		(1,112	)		4,129
Earnings per Common Share Assuming Dilution	$	1.18			(0.38	)		(0.03	)		(0.03	)		(0.44	)	$	1.62

Tax Rate		14.1	%														15.6	%

Full Year
Cost of sales	$	17,411			2,059			205						2,264		$	15,147
Selling, general and administrative		10,042			176			94						270			9,772
Research and development		13,548			1,676			30						1,706			11,842
Restructuring costs		337						337						337			–
Other (income) expense, net		1,501			(207	)					1,348			1,141			360
Income Before Taxes		16,444			(3,704	)		(666	)		(1,348	)		(5,718	)		22,162
Income Tax Provision (Benefit)		1,918			(809	)⁽³⁾		(129	)⁽³⁾		(294	)⁽³⁾		(1,232	)		3,150
Net Income		14,526			(2,895	)		(537	)		(1,054	)		(4,486	)		19,012
Net Income Attributable to Merck & Co., Inc.		14,519			(2,895	)		(537	)		(1,054	)		(4,486	)		19,005
Earnings per Common Share Assuming Dilution	$	5.71			(1.14	)		(0.21	)		(0.42	)		(1.77	)	$	7.48

Tax Rate		11.7	%														14.2	%

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 fourth quarter and full year primarily reflect $780 million and $1.7 billion, respectively, 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, partially offset by a reduction in expenses related to changes in the estimated fair value of liabilities for contingent consideration. Amounts included in other (income) expense, net, reflect royalty income and decreases 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

FOURTH QUARTER 2023

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global						U.S.						International
	4Q 2023		4Q 2022		% Change		4Q 2023		4Q 2022		% Change		4Q 2023		4Q 2022		% Change
TOTAL SALES ⁽¹⁾	$	14,630	$	13,830		6	$	7,088	$	6,279		13	$	7,542	$	7,551		-
PHARMACEUTICAL		13,141		12,180		8		6,698		5,871		14		6,443		6,309		2
Oncology
Keytruda		6,608		5,450		21		3,972		3,378		18		2,636		2,071		27
Alliance Revenue – Lynparza ⁽²⁾		315		292		8		168		157		7		147		135		9
Alliance Revenue – Lenvima ⁽²⁾		226		216		5		181		154		18		45		62		-28
Welireg		72		40		79		68		40		70		4				-
Alliance Revenue – Reblozyl ⁽³⁾		70		41		69		60		36		68		10		6		74
Vaccines ⁽⁴⁾
Gardasil / Gardasil 9		1,871		1,470		27		365		262		39		1,506		1,207		25
ProQuad / M-M-R II / Varivax		545		526		4		402		387		4		143		139		3
RotaTeq		185		139		34		112		82		37		73		57		28
Vaxneuvance		176		138		28		138		132		5		38		6		*
Pneumovax 23		85		145		-42		22		66		-66		62		79		-21
Vaqta		29		39		-24		28		23		24		1		16		-94
Hospital Acute Care
Bridion		429		441		-3		315		257		22		113		183		-38
Prevymis		175		118		49		78		52		49		98		65		50
Dificid		87		67		30		75		57		32		12		10		17
Zerbaxa		61		49		25		33		25		31		28		24		18
Noxafil		46		58		-21		4		13		-72		43		46		-7
Primaxin		39		54		-28				1		N/M		39		53		-27
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁵⁾		108		82		31		102		85		20		6		-2		*
Adempas ⁽⁶⁾		66		57		15								66		57		15
Virology
Lagevrio		193		825		-77		10				-		183		825		-78
Isentress / Isentress HD		105		167		-37		50		78		-36		56		89		-38
Neuroscience
Belsomra		54		59		-8		21		19		10		33		39		-17
Immunology
Simponi		171		166		3								171		166		3
Remicade		43		44		-1								43		44		-1
Diabetes ⁽⁷⁾
Januvia		547		561		-2		309		290		6		239		271		-12
Janumet		240		353		-32		41		97		-58		198		255		-22
Other Pharmaceutical ⁽⁸⁾		595		583		2		144		180		-20		450		406		11
ANIMAL HEALTH		1,278		1,230		4		387		396		-2		891		834		7
Livestock		808		814		-1		158		188		-16		649		626		4
Companion Animal		470		416		13		229		208		10		242		208		16
Other Revenues ⁽⁹⁾		211		420		-50		3		12		-75		208		408		-49

*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⁾Alliance Revenue represents royalties.

⁽⁴⁾Total Vaccines sales were $2,962 million in the fourth quarter of 2023 and $2,554 million in the fourth quarter of 2022.

⁽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 $876 million in the fourth quarter of 2023 and $1,012 million in the fourth quarter of 2022.

⁽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 $10 million in the fourth quarter of 2022.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

FULL YEAR 2023

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	Global						U.S.						International
	Full Year 2023		Full Year 2022		% Change		Full Year 2023		Full Year 2022		% Change		Full Year 2023		Full Year 2022		% Change
TOTAL SALES ⁽¹⁾	$	60,115	$	59,283		1	$	28,480	$	27,206		5	$	31,635	$	32,077		-1
PHARMACEUTICAL		53,583		52,005		3		26,539		24,989		6		27,044		27,016		-
Oncology
Keytruda		25,011		20,937		19		15,114		12,686		19		9,897		8,251		20
Alliance Revenue – Lynparza ⁽²⁾		1,199		1,116		7		607		584		4		592		532		11
Alliance Revenue – Lenvima ⁽²⁾		960		876		10		657		579		13		303		297		2
Welireg		218		123		77		209		123		70		10				-
Alliance Revenue – Reblozyl ⁽³⁾		212		166		28		168		123		37		43		43		1
Vaccines ⁽⁴⁾
Gardasil / Gardasil 9		8,886		6,897		29		2,083		2,065		1		6,803		4,832		41
ProQuad / M-M-R II / Varivax		2,368		2,241		6		1,837		1,724		7		531		518		3
RotaTeq		769		783		-2		493		508		-3		276		275		-
Vaxneuvance		665		170		*		561		163		*		103		7		*
Pneumovax 23		412		602		-32		127		346		-63		285		256		11
Vaqta		180		173		4		119		95		25		61		78		-21
Hospital Acute Care
Bridion		1,842		1,685		9		1,156		922		25		686		762		-10
Prevymis		605		428		41		264		188		40		341		240		42
Dificid		302		263		15		274		241		14		28		22		25
Zerbaxa		218		169		29		119		89		33		100		79		25
Noxafil		213		238		-11		32		51		-37		181		187		-3
Primaxin		213		239		-11		1		1		-6		211		238		-11
Cardiovascular
Alliance Revenue - Adempas/Verquvo ⁽⁵⁾		367		341		8		350		329		6		16		12		41
Adempas ⁽⁶⁾		255		238		7								255		238		7
Virology
Lagevrio		1,428		5,684		-75		10		1,523		-99		1,418		4,161		-66
Isentress / Isentress HD		483		633		-24		215		274		-21		268		359		-25
Neuroscience
Belsomra		231		258		-11		81		79		3		150		179		-16
Immunology
Simponi		710		706		1								710		706		1
Remicade		187		207		-9								187		207		-9
Diabetes ⁽⁷⁾
Januvia		2,189		2,813		-22		1,151		1,248		-8		1,039		1,565		-34
Janumet		1,177		1,700		-31		223		355		-37		954		1,344		-29
Other Pharmaceutical ⁽⁸⁾		2,283		2,319		-2		688		693		-1		1,596		1,628		-2
ANIMAL HEALTH		5,625		5,550		1		1,804		1,822		-1		3,821		3,728		2
Livestock		3,337		3,300		1		700		710		-1		2,637		2,590		2
Companion Animal		2,288		2,250		2		1,104		1,112		-1		1,184		1,138		4
Other Revenues ⁽⁹⁾		907		1,728		-48		137		395		-65		770		1,333		-42

*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 $13,654 million and $11,297 million on a global basis for December 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 $3,701 million and $4,848 million on a global basis for December 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 $165 million on a global basis for December YTD 2023 and 2022, respectively.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

	2023															2022														% Change
	1Q			2Q			3Q			4Q			Full Year			1Q			2Q			3Q			4Q		Full Year			4Q		Full Year
TOTAL PHARMACEUTICAL	$	12,721		$	13,457		$	14,263		$	13,141		$	53,583		$	14,107		$	12,756		$	12,963		$	12,180	$	52,005			8		3

United States		6,117			6,570			7,153			6,698			26,539			6,773			5,726			6,620			5,871		24,989			14		6
% Pharmaceutical Sales		48.1	%		48.8	%		50.1	%		51.0	%		49.5	%		48.0	%		44.9	%		51.1	%		48.2%		48.1	%
Europe ⁽¹⁾		2,326			2,401			2,497			2,491			9,715			3,309			2,677			2,427			2,494		10,906			-		-11
% Pharmaceutical Sales		18.3	%		17.8	%		17.5	%		19.0	%		18.1	%		23.5	%		21.0	%		18.7	%		20.5%		21.0	%
China		1,694			1,887			1,674			1,456			6,710			1,113			1,355			1,419			1,216		5,102			20		32
% Pharmaceutical Sales		13.3	%		14.0	%		11.7	%		11.1	%		12.5	%		7.9	%		10.6	%		10.9	%		10.0%		9.8	%
Japan		737			652			1,062			629			3,081			965			1,092			653			832		3,542			-24		-13
% Pharmaceutical Sales		5.8	%		4.8	%		7.4	%		4.8	%		5.7	%		6.8	%		8.6	%		5.0	%		6.8%		6.8	%
Asia Pacific (other than China and Japan)		703			705			636			616			2,661			786			854			702			691		3,034			-11		-12
% Pharmaceutical Sales		5.5	%		5.2	%		4.5	%		4.7	%		5.0	%		5.6	%		6.7	%		5.4	%		5.7%		5.8	%
Latin America		470			566			696			596			2,328			435			453			511			472		1,871			26		24
% Pharmaceutical Sales		3.7	%		4.2	%		4.9	%		4.5	%		4.3	%		3.1	%		3.6	%		3.9	%		3.9%		3.6	%
Eastern Europe/Middle East/Africa		381			370			301			299			1,351			450			339			360			320		1,469			-7		-8
% Pharmaceutical Sales		3.0	%		2.7	%		2.1	%		2.3	%		2.5	%		3.2	%		2.7	%		2.8	%		2.6%		2.8	%
Canada		141			127			133			138			540			189			166			166			158		678			-12		-20
% Pharmaceutical Sales		1.1	%		0.9	%		0.9	%		1.1	%		1.0	%		1.3	%		1.3	%		1.3	%		1.3%		1.3	%
Other		152			179			111			218			658			87			94			105			126		414			73		59
% Pharmaceutical Sales		1.2	%		1.6	%		0.9	%		1.5	%		1.4	%		0.6	%		0.6	%		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

	4Q23			4Q22			Full Year 2023			Full Year 2022
Interest income	$	(70	)	$	(95	)	$	(365	)	$	(157	)
Interest expense		310			235			1,146			962
Exchange losses		162			17			370			237
(Income) loss from investments in equity securities, net ⁽¹⁾		(99	)		59			(340	)		1,419
Net periodic defined benefit plan (credit) cost other than service cost		(134	)		(71	)		(498	)		(279	)
Other, net		(91	)		(220	)		153			(681	)
Total	$	78		$	(75	)	$	466		$	1,501

⁽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.