XML 60 R19.htm IDEA: XBRL DOCUMENT v3.25.0.1
Loans Payable, Long-Term Debt and Leases
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Loans Payable, Long-Term Debt and Leases Loans Payable, Long-Term Debt and Leases
Loans Payable
Loans payable at December 31, 2024 included $2.5 billion of notes due in 2025 and $149 million of long-dated notes that are subject to repayment at the option of the holders. Loans payable at December 31, 2023 included $1.3 billion of notes due in 2024 and $69 million of long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of commercial paper borrowings was 5.18% and 5.14% for the years ended December 31, 2024 and 2023, respectively. There were no commercial paper borrowings outstanding at December 31, 2024 or 2023.

Long-Term Debt
Long-term debt at December 31 consisted of:
20242023
2.15% notes due 2031
$1,989 $1,988 
2.75% notes due 2051
1,980 1,980 
3.70% notes due 2045
1,980 1,979 
3.40% notes due 2029
1,742 1,740 
4.50% notes due 2033
1,509 1,547 
1.70% notes due 2027
1,497 1,495 
2.90% notes due 2061
1,484 1,484 
5.00% notes due 2053
1,482 1,481 
4.00% notes due 2049
1,474 1,473 
4.15% notes due 2043
1,240 1,240 
1.45% notes due 2030
1,240 1,238 
2.45% notes due 2050
1,216 1,214 
1.875% euro-denominated notes due 2026
1,041 1,103 
0.75% notes due 2026
998 996 
1.90% notes due 2028
996 995 
5.15% notes due 2063
987 987 
3.90% notes due 2039
987 986 
2.35% notes due 2040
986 985 
3.25% euro-denominated notes due 2032
880 — 
3.50% euro-denominated notes due 2037
877 — 
3.70% euro-denominated notes due 2044
876 — 
3.75% euro-denominated notes due 2054
873 — 
4.30% notes due 2030
746 745 
4.90% notes due 2044
740 740 
6.50% notes due 2033
702 707 
1.375% euro-denominated notes due 2036
517 548 
2.50% euro-denominated notes due 2034
517 548 
4.05% notes due 2028
498 497 
3.60% notes due 2042
492 492 
6.55% notes due 2037
404 406 
5.75% notes due 2036
339 339 
5.95% debentures due 2028
307 307 
5.85% notes due 2039
271 271 
6.40% debentures due 2028
251 250 
6.30% debentures due 2026
135 135 
2.75% notes due 2025
— 2,498 
Other209 289 
$34,462 $33,683 
Other (as presented in the table above) includes borrowings at variable rates that resulted in effective interest rates of 5.02% and 4.82% for 2024 and 2023, respectively.
With the exception of the 6.30% debentures due 2026, the notes listed in the table above are redeemable in whole or in part, at Merck’s option at any time, at varying redemption prices. Effective as of November 3, 2009, the Company executed a full and unconditional guarantee of the then existing debt of its subsidiary Merck Sharp & Dohme LLC. (MSD) and MSD executed a full and unconditional guarantee of the then existing debt of the Company
(excluding commercial paper), including for payments of principal and interest. These guarantees do not extend to debt issued subsequent to that date.
In May 2024, MSD Netherlands Capital B.V., a wholly owned finance subsidiary of Merck, completed a registered public offering of €3.4 billion in aggregate principal amount of euro-dominated senior notes comprised of €850 million of 3.25% senior notes due 2032, €850 million of 3.50% senior notes due 2037, €850 million of 3.70% senior notes due 2044 and €850 million of 3.75% senior notes due 2054 (collectively, the Euronotes). The Company has fully and unconditionally guaranteed all of MSD Netherlands Capital B.V.’s obligations under the Euronotes and no other subsidiary of the Company will guarantee these obligations. MSD Netherlands Capital B.V. is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X of the Exchange Act, with no assets or operations other than those related to the issuance, administration and repayment of the Euronotes. The financial condition, results of operations and cash flows of MSD Netherlands Capital B.V. are consolidated in the financial statements of the Company. The net cash proceeds from the offering were used for general corporate purposes.
Certain of the Company’s borrowings require that Merck comply with covenants and, at December 31, 2024, the Company was in compliance with these covenants.
The aggregate maturities of long-term debt for each of the next five years are as follows: 2025, $2.6 billion; 2026, $2.2 billion; 2027, $1.5 billion; 2028, $2.1 billion; 2029, $1.7 billion. Interest payments related to these debt obligations are as follows: 2025, $1.2 billion; 2026, $1.2 billion; 2027, $1.1 billion; 2028, $1.1 billion; 2029, $1.0 billion.
The Company has a $6.0 billion credit facility that matures in May 2028. The facility provides backup liquidity for the Company’s commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this facility.
Leases
The Company has operating leases primarily for manufacturing facilities, research and development facilities, corporate offices, employee housing, vehicles and certain equipment. The Company determines if an arrangement is a lease at inception. When evaluating contracts for embedded leases, the Company exercises judgment to determine if there is an explicit or implicit identified asset in the contract and if Merck controls the use of that asset. Embedded leases, primarily associated with contract manufacturing organizations, are immaterial. The lease term includes options to extend or terminate the lease when it is reasonably certain that Merck will exercise that option. Real estate leases for facilities have an average remaining lease term of approximately six years, which include options to extend the leases for up to five years where applicable. Vehicle leases are generally in effect for four years. The Company elected to exclude short-term leases (leases with an initial term of 12 months or less) from the lease assets and liabilities on the balance sheet.
Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments by asset class. On a quarterly basis, an updated incremental borrowing rate is determined based on the average remaining lease term of each asset class and the Company’s pretax cost of debt for that same term. The updated rates for each asset class are applied prospectively to new leases. The Company does not separate lease components (e.g., payments for rent, real estate taxes and insurance costs) from non-lease components (e.g. common-area maintenance costs) in the event that the agreement contains both. Merck includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability (if the non-lease components are fixed). For vehicle leases and employee housing, the Company applies a portfolio approach to account for the operating lease assets and liabilities.
Certain of the Company’s lease agreements contain variable lease payments that are adjusted periodically for inflation or for actual operating expense true-ups compared with estimated amounts; however, these amounts are immaterial. Sublease income was immaterial and there were no sale and leaseback transactions in 2024. Merck’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease cost was $348 million in 2024, $339 million in 2023 and $334 million in 2022. Cash paid for amounts included in the measurement of operating lease liabilities was $357 million in 2024, $347 million in 2023 and $335 million in 2022. Operating lease assets obtained in exchange for lease obligations were $47 million in 2024, $122 million in 2023 and $57 million in 2022.
Supplemental balance sheet information related to operating leases is as follows:
December 3120242023
Assets
Other Assets (1)
$1,370 $1,437 
Liabilities
Accrued and other current liabilities282 285 
Other Noncurrent Liabilities877 928 
$1,159 $1,213 
Weighted-average remaining lease term (years)6.07.0
Weighted-average discount rate3.2 %3.3 %
(1)    Includes prepaid leases that have no related lease liability.
Maturities of operating leases liabilities are as follows:
2025$329 
2026292 
2027235 
2028146 
2029116 
Thereafter403 
Total lease payments1,521 
Less: Imputed interest362 
$1,159 
At December 31, 2024, the Company had entered into additional real estate operating leases that had not yet commenced; the obligations associated with these leases total $183 million.
Loans Payable, Long-Term Debt and Leases Loans Payable, Long-Term Debt and Leases
Loans Payable
Loans payable at December 31, 2024 included $2.5 billion of notes due in 2025 and $149 million of long-dated notes that are subject to repayment at the option of the holders. Loans payable at December 31, 2023 included $1.3 billion of notes due in 2024 and $69 million of long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of commercial paper borrowings was 5.18% and 5.14% for the years ended December 31, 2024 and 2023, respectively. There were no commercial paper borrowings outstanding at December 31, 2024 or 2023.

Long-Term Debt
Long-term debt at December 31 consisted of:
20242023
2.15% notes due 2031
$1,989 $1,988 
2.75% notes due 2051
1,980 1,980 
3.70% notes due 2045
1,980 1,979 
3.40% notes due 2029
1,742 1,740 
4.50% notes due 2033
1,509 1,547 
1.70% notes due 2027
1,497 1,495 
2.90% notes due 2061
1,484 1,484 
5.00% notes due 2053
1,482 1,481 
4.00% notes due 2049
1,474 1,473 
4.15% notes due 2043
1,240 1,240 
1.45% notes due 2030
1,240 1,238 
2.45% notes due 2050
1,216 1,214 
1.875% euro-denominated notes due 2026
1,041 1,103 
0.75% notes due 2026
998 996 
1.90% notes due 2028
996 995 
5.15% notes due 2063
987 987 
3.90% notes due 2039
987 986 
2.35% notes due 2040
986 985 
3.25% euro-denominated notes due 2032
880 — 
3.50% euro-denominated notes due 2037
877 — 
3.70% euro-denominated notes due 2044
876 — 
3.75% euro-denominated notes due 2054
873 — 
4.30% notes due 2030
746 745 
4.90% notes due 2044
740 740 
6.50% notes due 2033
702 707 
1.375% euro-denominated notes due 2036
517 548 
2.50% euro-denominated notes due 2034
517 548 
4.05% notes due 2028
498 497 
3.60% notes due 2042
492 492 
6.55% notes due 2037
404 406 
5.75% notes due 2036
339 339 
5.95% debentures due 2028
307 307 
5.85% notes due 2039
271 271 
6.40% debentures due 2028
251 250 
6.30% debentures due 2026
135 135 
2.75% notes due 2025
— 2,498 
Other209 289 
$34,462 $33,683 
Other (as presented in the table above) includes borrowings at variable rates that resulted in effective interest rates of 5.02% and 4.82% for 2024 and 2023, respectively.
With the exception of the 6.30% debentures due 2026, the notes listed in the table above are redeemable in whole or in part, at Merck’s option at any time, at varying redemption prices. Effective as of November 3, 2009, the Company executed a full and unconditional guarantee of the then existing debt of its subsidiary Merck Sharp & Dohme LLC. (MSD) and MSD executed a full and unconditional guarantee of the then existing debt of the Company
(excluding commercial paper), including for payments of principal and interest. These guarantees do not extend to debt issued subsequent to that date.
In May 2024, MSD Netherlands Capital B.V., a wholly owned finance subsidiary of Merck, completed a registered public offering of €3.4 billion in aggregate principal amount of euro-dominated senior notes comprised of €850 million of 3.25% senior notes due 2032, €850 million of 3.50% senior notes due 2037, €850 million of 3.70% senior notes due 2044 and €850 million of 3.75% senior notes due 2054 (collectively, the Euronotes). The Company has fully and unconditionally guaranteed all of MSD Netherlands Capital B.V.’s obligations under the Euronotes and no other subsidiary of the Company will guarantee these obligations. MSD Netherlands Capital B.V. is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X of the Exchange Act, with no assets or operations other than those related to the issuance, administration and repayment of the Euronotes. The financial condition, results of operations and cash flows of MSD Netherlands Capital B.V. are consolidated in the financial statements of the Company. The net cash proceeds from the offering were used for general corporate purposes.
Certain of the Company’s borrowings require that Merck comply with covenants and, at December 31, 2024, the Company was in compliance with these covenants.
The aggregate maturities of long-term debt for each of the next five years are as follows: 2025, $2.6 billion; 2026, $2.2 billion; 2027, $1.5 billion; 2028, $2.1 billion; 2029, $1.7 billion. Interest payments related to these debt obligations are as follows: 2025, $1.2 billion; 2026, $1.2 billion; 2027, $1.1 billion; 2028, $1.1 billion; 2029, $1.0 billion.
The Company has a $6.0 billion credit facility that matures in May 2028. The facility provides backup liquidity for the Company’s commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this facility.
Leases
The Company has operating leases primarily for manufacturing facilities, research and development facilities, corporate offices, employee housing, vehicles and certain equipment. The Company determines if an arrangement is a lease at inception. When evaluating contracts for embedded leases, the Company exercises judgment to determine if there is an explicit or implicit identified asset in the contract and if Merck controls the use of that asset. Embedded leases, primarily associated with contract manufacturing organizations, are immaterial. The lease term includes options to extend or terminate the lease when it is reasonably certain that Merck will exercise that option. Real estate leases for facilities have an average remaining lease term of approximately six years, which include options to extend the leases for up to five years where applicable. Vehicle leases are generally in effect for four years. The Company elected to exclude short-term leases (leases with an initial term of 12 months or less) from the lease assets and liabilities on the balance sheet.
Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since the Company’s leases do not have a readily determinable implicit discount rate, the Company uses its incremental borrowing rate to calculate the present value of lease payments by asset class. On a quarterly basis, an updated incremental borrowing rate is determined based on the average remaining lease term of each asset class and the Company’s pretax cost of debt for that same term. The updated rates for each asset class are applied prospectively to new leases. The Company does not separate lease components (e.g., payments for rent, real estate taxes and insurance costs) from non-lease components (e.g. common-area maintenance costs) in the event that the agreement contains both. Merck includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability (if the non-lease components are fixed). For vehicle leases and employee housing, the Company applies a portfolio approach to account for the operating lease assets and liabilities.
Certain of the Company’s lease agreements contain variable lease payments that are adjusted periodically for inflation or for actual operating expense true-ups compared with estimated amounts; however, these amounts are immaterial. Sublease income was immaterial and there were no sale and leaseback transactions in 2024. Merck’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease cost was $348 million in 2024, $339 million in 2023 and $334 million in 2022. Cash paid for amounts included in the measurement of operating lease liabilities was $357 million in 2024, $347 million in 2023 and $335 million in 2022. Operating lease assets obtained in exchange for lease obligations were $47 million in 2024, $122 million in 2023 and $57 million in 2022.
Supplemental balance sheet information related to operating leases is as follows:
December 3120242023
Assets
Other Assets (1)
$1,370 $1,437 
Liabilities
Accrued and other current liabilities282 285 
Other Noncurrent Liabilities877 928 
$1,159 $1,213 
Weighted-average remaining lease term (years)6.07.0
Weighted-average discount rate3.2 %3.3 %
(1)    Includes prepaid leases that have no related lease liability.
Maturities of operating leases liabilities are as follows:
2025$329 
2026292 
2027235 
2028146 
2029116 
Thereafter403 
Total lease payments1,521 
Less: Imputed interest362 
$1,159 
At December 31, 2024, the Company had entered into additional real estate operating leases that had not yet commenced; the obligations associated with these leases total $183 million.