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ý
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Annual Report Pursuant to Section 13 or 15(d)
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of the Securities Exchange Act of 1934
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For the Fiscal Year Ended December 31, 2015
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or
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o
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Transition Report Pursuant to Section 13 or 15(d)
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of the Securities Exchange Act of 1934
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For the transition period from
to
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Incorporated in New Jersey
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I.R.S. Employer
Identification No. 22-1918501
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Title of Each Class
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Name of Each Exchange
on which Registered
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Common Stock ($0.50 par value)
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New York Stock Exchange
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1.125% Notes due 2021
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New York Stock Exchange
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1.875% Notes due 2026
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New York Stock Exchange
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2.500% Notes due 2034
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New York Stock Exchange
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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(Do not check if a smaller reporting company)
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Document
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Part of Form 10-K
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Proxy Statement for the Annual Meeting of Shareholders to be held May 24, 2016,
to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this report
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Part III
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Page
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Item 1.
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Item 1A.
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|||
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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|||
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(a)
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||
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(b)
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 1.
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Business.
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($ in millions)
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2015
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2014
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2013
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||||||
Total Sales
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$
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39,498
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$
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42,237
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$
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44,033
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Pharmaceutical
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34,782
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36,042
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37,437
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Januvia
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3,863
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3,931
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4,004
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Zetia
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2,526
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2,650
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2,658
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Janumet
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2,151
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2,071
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1,829
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|||
Gardasil/Gardasil
9
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1,908
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1,738
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1,831
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Remicade
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1,794
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2,372
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2,271
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Isentress
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1,511
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1,673
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1,643
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ProQuad/M-M-R
II
/Varivax
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1,505
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1,394
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1,306
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Vytorin
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1,251
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1,516
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1,643
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Cubicin
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1,127
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25
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24
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Singulair
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931
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1,092
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1,196
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Animal Health
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3,324
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3,454
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3,362
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Consumer Care
(1)
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3
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1,547
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1,894
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Other Revenues
(2)
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1,389
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1,194
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1,340
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(1)
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On October 1, 2014, the Company divested its Consumer Care segment that developed, manufactured and marketed over-the-counter, foot care and sun care products.
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(2)
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Other revenues are primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, and third-party manufacturing sales.
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Product
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Year of Expiration (in the U.S.)
(1)
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Invanz
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2016 (compound)/2017 (composition)
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Cubicin
(2)
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2016 (composition)
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Zostavax
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2016 (use)
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Dulera
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2017 (formulation)/2020 (combination)
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Zetia
(3)
/Vytorin
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2017
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Asmanex
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2018 (formulation)
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Nasonex
(4)
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2018 (formulation)
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NuvaRing
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2018 (delivery system)
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Emend
for Injection
(5)
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2019
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Noxafil
(5)
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2019
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RotaTeq
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2019
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Intron A
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2020
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Recombivax
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2020 (method of making/vectors)
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Januvia
(5)
/Janumet
(5)
/Janumet XR
(5)
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2022
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Isentress
(5)
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2023
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Bridion
(5)
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2026 (with pending Patent Term Restoration)
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Nexplanon
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2026 (device)/2027 (device with applicator)
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Grastek
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2026 (use)
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Ragwitek
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2026 (use)
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Bravecto
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2027 (with pending Patent Term Restoration)
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Zontivity
(5)
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2027 (with pending Patent Term Restoration)
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Gardasil/Gardasil 9
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2028
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Keytruda
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2028
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Zerbaxa
(5)
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2028 (with pending Patent Term Restoration)
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Sivextro
(5)
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2028 (with pending Patent Term Restoration)
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Belsomra
(5)
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2029
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Zepatier
(5)
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2031
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(1)
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Compound patent unless otherwise noted. Certain of the products listed may be the subject of patent litigation. See Item 8. “Financial Statements and Supplementary Data,” Note 10. “Contingencies and Environmental Liabilities” below.
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(2)
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In a December 2014 decision of a district court action against Hospira, Inc. (Hospira), the June 2016 patent was found to be valid and infringed. Later patents for
Cubicin
, expiring in September 2019 and November 2020, were found to be invalid. In November 2015, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed the lower court decision. Hospira’s application to the FDA will not be approved until at least June 2016. An earlier district court action against Teva resulted in a settlement whereby Teva can launch a generic version of
Cubicin
at the latest in December 2017, or earlier under certain conditions, but in no event before June 2016.
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(3)
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By agreement, a generic manufacturer may launch a generic version of
Zetia
in the United States in December 2016.
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(4)
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A district court decision (upheld on appeal to the CAFC) found that a proposed generic product by Apotex, a generic manufacturer, would not infringe on Merck’s
Nasonex
formulation patent. Thus, if Apotex’s application is approved by the FDA, it can enter the market in the United States with a generic version of
Nasonex
.
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(5)
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Eligible for 6 months Pediatric Exclusivity.
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Under Review
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Currently Anticipated
Year of Expiration (in the U.S.)
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V419 (pediatric hexavalent combination vaccine)
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2020 (method of making/vectors)
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MK-6072 (bezlotoxumab)
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2025
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Phase 3 Drug Candidate
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Currently Anticipated
Year of Expiration (in the U.S.)
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V212 (inactivated varicella zoster virus (VZV) vaccine)
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2016 (use)
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V920 (ebola vaccine)
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2023
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MK-0822 (odanacatib)
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2024
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MK-8228 (letermovir)
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2025
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MK-8237 (allergy, house dust mites)
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2026 (use)
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MK-0859 (anacetrapib)
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2027
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MK-7655A (relebactam + imipenem/cilastatin)
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2029
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MK-3102 (omarigliptin)
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2030
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MK-8931 (verubecestat)
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2030
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MK-8835 (ertugliflozin)
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2030
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MK-8835A (ertugliflozin + sitagliptin)
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2030
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MK-8835B (ertugliflozin + metformin)
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2030
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MK-1439 (doravirine)
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2031
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MK-8342B (contraception, next generation ring)
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2034
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Phase 2
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Phase 3 (Phase 3 entry date)
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Under Review
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Alzheimer’s Disease
MK-7622
Asthma
MK-1029
Cancer
MK-3475
Keytruda
Hodgkin Lymphoma
PMBCL (Primary Mediastinal
Large B-Cell Lymphoma)
Advanced Solid Tumors
MK-2206
MK-8628
Diabetes
MK-8521
Heart Failure
MK-1242 (vericiguat)
(1)
Hepatitis C
MK-3682B (MK-3682/MK-8408/
MK-5172 (grazoprevir))
Pneumoconjugate Vaccine
V114
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Allergy
MK-8237, House Dust Mite (March 2014)
(1,2)
Alzheimer’s Disease
MK-8931 (verubecestat) (December 2013)
Atherosclerosis
MK-0859 (anacetrapib) (May 2008)
Bacterial Infection
MK-7655A (relebactam+imipenem/cilastatin)
(October 2015)
Cancer
MK-3475
Keytruda
Bladder (October 2014)
Breast (October 2015)
Colorectal (November 2015)
Esophageal (December 2015)
Gastric (May 2015)
Head and Neck (November 2014)
Multiple Myeloma (December 2015)
CMV Prophylaxis in Transplant Patients
MK-8228 (letermovir) (June 2014)
Contraception, Next Generation Ring
MK-8342B (September 2015)
Diabetes Mellitus
MK-3102 (omarigliptin) (September 2012)
MK-8835 (ertugliflozin) (November 2013)
(1)
MK-8835A (ertugliflozin+sitagliptin)
(September 2015)
(1)
MK-8835B (ertugliflozin+metformin)
(August 2015)
(1)
MK-1293 (February 2014) (U.S.)
(1)
MK-0431J (sitagliptin+ipragliflozin)
(October 2015) (Japan)
(1)
Ebola Vaccine
V920 (March 2015)
Herpes Zoster
V212 (inactivated VZV vaccine) (December 2010)
HIV
MK-1439 (doravirine) (December 2014)
Osteoporosis
MK-0822 (odanacatib) (September 2007)
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Cancer
MK-3475
Keytruda
Non-Small-Cell Lung (EU)
Clostridium difficile
Infection
MK-6072 (bezlotoxumab) (U.S./EU)
Diabetes Mellitus
MK-1293 (EU)
(1)
Hepatitis C
MK-5172A
Zepatier
(EU)
Pediatric Hexavalent Combination Vaccine
V419 (U.S.)
(3)
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Footnotes:
(1)
Being developed in a collaboration.
(2)
North American rights only.
(3)
V419 is an investigational pediatric hexavalent combination vaccine, DTaP5-IPV-Hib-HepB, that is being developed and, if approved, will be commercialized through a partnership of Merck and Sanofi Pasteur. On November 2, 2015, the FDA issued a CRL with respect to V419. Both companies are reviewing the CRL and plan to have further communication with the FDA.
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Item 1A.
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Risk Factors.
|
•
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findings of ineffectiveness, superior safety or efficacy of competing products, or harmful side effects in clinical or pre-clinical testing;
|
•
|
failure to receive the necessary regulatory approvals, including delays in the approval of new products and new indications, and uncertainties about the time required to obtain regulatory approvals and the benefit/risk standards applied by regulatory agencies in determining whether to grant approvals;
|
•
|
failure in certain markets to obtain reimbursement commensurate with the level of innovation and clinical benefit presented by the product;
|
•
|
lack of economic feasibility due to manufacturing costs or other factors; and
|
•
|
preclusion from commercialization by the proprietary rights of others.
|
•
|
the re-review of products that are already marketed;
|
•
|
new scientific information and evolution of scientific theories;
|
•
|
the recall or loss of marketing approval of products that are already marketed;
|
•
|
changing government standards or public expectations regarding safety, efficacy or labeling changes; and
|
•
|
greater scrutiny in advertising and promotion.
|
•
|
changes in medical reimbursement policies and programs and pricing restrictions in key markets;
|
•
|
multiple regulatory requirements that could restrict the Company’s ability to manufacture and sell its products in key markets;
|
•
|
trade protection measures and import or export licensing requirements;
|
•
|
foreign exchange fluctuations;
|
•
|
diminished protection of intellectual property in some countries; and
|
•
|
possible nationalization and expropriation.
|
•
|
There may be limited access to and supply of normal and diseased tissue samples, cell lines, pathogens, bacteria, viral strains and other biological materials. In addition, government regulations in multiple jurisdictions, such as the United States and the EU, could result in restricted access to, or transport or use of, such materials. If the Company loses access to sufficient sources of such materials, or if tighter restrictions are imposed on the use of such materials, the Company may not be able to conduct research activities as planned and may incur additional development costs.
|
•
|
The development, manufacturing and marketing of biologics are subject to regulation by the FDA, the EMA and other regulatory bodies. These regulations are often more complex and extensive than the regulations applicable to other pharmaceutical products. For example, in the United States, a BLA, including both preclinical and clinical trial data and extensive data regarding the manufacturing procedures, is required for human vaccine candidates and FDA approval is required for the release of each manufactured commercial lot.
|
•
|
Manufacturing biologics, especially in large quantities, is often complex and may require the use of innovative technologies to handle living micro-organisms. Each lot of an approved biologic must undergo thorough testing for identity, strength, quality, purity and potency. Manufacturing biologics requires facilities specifically designed for and validated for this purpose, and sophisticated quality assurance and quality control procedures are necessary. Slight deviations anywhere in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result in lot failures, product recalls or spoilage. When changes are made to the manufacturing process, the Company may be required to provide pre-clinical and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes.
|
•
|
Biologics are frequently costly to manufacture because production ingredients are derived from living animal or plant material, and most biologics cannot be made synthetically. In particular, keeping up with the demand for vaccines may be difficult due to the complexity of producing vaccines.
|
•
|
The use of biologically derived ingredients can lead to allegations of harm, including infections or allergic reactions, or closure of product facilities due to possible contamination. Any of these events could result in substantial costs.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
(1)
|
All shares purchased during the period were made as part of a plan approved by the Board of Directors in March 2015 to purchase up to $10 billion in Merck shares.
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|
End of
Period Value
|
|
2015/2010
CAGR**
|
|||
MERCK
|
$
|
177
|
|
|
12
|
%
|
PEER GRP.**
|
244
|
|
|
20
|
%
|
|
S&P 500
|
181
|
|
|
13
|
%
|
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
MERCK
|
100.00
|
109.40
|
123.72
|
156.90
|
183.56
|
176.53
|
PEER GRP.
|
100.00
|
122.23
|
141.20
|
196.84
|
229.34
|
244.08
|
S&P 500
|
100.00
|
102.10
|
118.44
|
156.78
|
178.22
|
180.67
|
*
|
Compound Annual Growth Rate
|
**
|
Peer group average was calculated on a market cap weighted basis. In addition, AbbVie Inc. replaced Abbott Laboratories in the peer group beginning 2013 following the spin off from Abbott Laboratories.
|
Item 6.
|
Selected Financial Data.
|
|
2015
(1)
|
|
2014
(2)
|
|
2013
|
|
2012
(3)
|
|
2011
(4)
|
||||||||||
Results for Year:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
39,498
|
|
|
$
|
42,237
|
|
|
$
|
44,033
|
|
|
$
|
47,267
|
|
|
$
|
48,047
|
|
Materials and production
|
14,934
|
|
|
16,768
|
|
|
16,954
|
|
|
16,446
|
|
|
16,871
|
|
|||||
Marketing and administrative
|
10,313
|
|
|
11,606
|
|
|
11,911
|
|
|
12,776
|
|
|
13,733
|
|
|||||
Research and development
|
6,704
|
|
|
7,180
|
|
|
7,503
|
|
|
8,168
|
|
|
8,467
|
|
|||||
Restructuring costs
|
619
|
|
|
1,013
|
|
|
1,709
|
|
|
664
|
|
|
1,306
|
|
|||||
Other (income) expense, net
|
1,527
|
|
|
(11,613
|
)
|
|
411
|
|
|
474
|
|
|
336
|
|
|||||
Income before taxes
|
5,401
|
|
|
17,283
|
|
|
5,545
|
|
|
8,739
|
|
|
7,334
|
|
|||||
Taxes on income
|
942
|
|
|
5,349
|
|
|
1,028
|
|
|
2,440
|
|
|
942
|
|
|||||
Net income
|
4,459
|
|
|
11,934
|
|
|
4,517
|
|
|
6,299
|
|
|
6,392
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
17
|
|
|
14
|
|
|
113
|
|
|
131
|
|
|
120
|
|
|||||
Net income attributable to Merck & Co., Inc.
|
4,442
|
|
|
11,920
|
|
|
4,404
|
|
|
6,168
|
|
|
6,272
|
|
|||||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
1.58
|
|
|
$
|
4.12
|
|
|
$
|
1.49
|
|
|
$
|
2.03
|
|
|
$
|
2.04
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
1.56
|
|
|
$
|
4.07
|
|
|
$
|
1.47
|
|
|
$
|
2.00
|
|
|
$
|
2.02
|
|
Cash dividends declared
|
5,115
|
|
|
5,156
|
|
|
5,132
|
|
|
5,173
|
|
|
4,818
|
|
|||||
Cash dividends declared per common share
|
$
|
1.81
|
|
|
$
|
1.77
|
|
|
$
|
1.73
|
|
|
$
|
1.69
|
|
|
$
|
1.56
|
|
Capital expenditures
|
1,283
|
|
|
1,317
|
|
|
1,548
|
|
|
1,954
|
|
|
1,723
|
|
|||||
Depreciation
|
1,593
|
|
|
2,471
|
|
|
2,225
|
|
|
1,999
|
|
|
2,351
|
|
|||||
Average common shares outstanding (millions)
|
2,816
|
|
|
2,894
|
|
|
2,963
|
|
|
3,041
|
|
|
3,071
|
|
|||||
Average common shares outstanding assuming dilution (millions)
|
2,841
|
|
|
2,928
|
|
|
2,996
|
|
|
3,076
|
|
|
3,094
|
|
|||||
Year-End Position:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
(5)
|
$
|
10,561
|
|
|
$
|
14,208
|
|
|
$
|
17,469
|
|
|
$
|
15,926
|
|
|
$
|
16,128
|
|
Property, plant and equipment, net
|
12,507
|
|
|
13,136
|
|
|
14,973
|
|
|
16,030
|
|
|
16,297
|
|
|||||
Total assets
(5)
|
101,779
|
|
|
98,167
|
|
|
105,440
|
|
|
105,921
|
|
|
104,699
|
|
|||||
Long-term debt
|
23,929
|
|
|
18,699
|
|
|
20,539
|
|
|
16,254
|
|
|
15,525
|
|
|||||
Total equity
|
44,767
|
|
|
48,791
|
|
|
52,326
|
|
|
55,463
|
|
|
56,943
|
|
|||||
Year-End Statistics:
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of stockholders of record
|
135,500
|
|
|
142,000
|
|
|
149,400
|
|
|
157,400
|
|
|
166,100
|
|
|||||
Number of employees
|
68,000
|
|
|
70,000
|
|
|
77,000
|
|
|
83,000
|
|
|
86,000
|
|
(1)
|
Amounts for 2015 include a net charge related to the settlement of
Vioxx
shareholder class action litigation, foreign exchange losses related to Venezuela, gains on the dispositions of businesses and other assets and the favorable benefit of certain tax items.
|
(2)
|
Amounts for 2014 reflect the divestiture of Merck’s Consumer Care business on October 1, 2014, including a gain on the sale, as well as a gain recognized on an option exercise by AstraZeneca, gains on the dispositions of other businesses and assets, and a loss on extinguishment of debt.
|
(3)
|
Amounts for 2012 include a net charge recorded in connection with the settlement of certain shareholder litigation.
|
(4)
|
Amounts for 2011 include an arbitration settlement charge.
|
(5)
|
Amounts have been restated to give effect to the early adoption of accounting guidance issued by the Financial Accounting Standards Board. See Note 2 to Item 8(a). “Financial Statements.”
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Primary Care and Women’s Health
|
|
|
|
|
|
||||||
Cardiovascular
|
|
|
|
|
|
||||||
Zetia
|
$
|
2,526
|
|
|
$
|
2,650
|
|
|
$
|
2,658
|
|
Vytorin
|
1,251
|
|
|
1,516
|
|
|
1,643
|
|
|||
Diabetes
|
|
|
|
|
|
||||||
Januvia
|
3,863
|
|
|
3,931
|
|
|
4,004
|
|
|||
Janumet
|
2,151
|
|
|
2,071
|
|
|
1,829
|
|
|||
General Medicine and Women’s Health
|
|
|
|
|
|
||||||
NuvaRing
|
732
|
|
|
723
|
|
|
686
|
|
|||
Implanon/Nexplanon
|
588
|
|
|
502
|
|
|
403
|
|
|||
Dulera
|
536
|
|
|
460
|
|
|
324
|
|
|||
Follistim AQ
|
383
|
|
|
412
|
|
|
481
|
|
|||
Hospital and Specialty
|
|
|
|
|
|
||||||
Hepatitis
|
|
|
|
|
|
||||||
PegIntron
|
182
|
|
|
381
|
|
|
496
|
|
|||
HIV
|
|
|
|
|
|
||||||
Isentress
|
1,511
|
|
|
1,673
|
|
|
1,643
|
|
|||
Hospital Acute Care
|
|
|
|
|
|
||||||
Cubicin
(1)
|
1,127
|
|
|
25
|
|
|
24
|
|
|||
Cancidas
|
573
|
|
|
681
|
|
|
660
|
|
|||
Invanz
|
569
|
|
|
529
|
|
|
488
|
|
|||
Noxafil
|
487
|
|
|
402
|
|
|
309
|
|
|||
Bridion
|
353
|
|
|
340
|
|
|
288
|
|
|||
Primaxin
|
313
|
|
|
329
|
|
|
335
|
|
|||
Immunology
|
|
|
|
|
|
||||||
Remicade
|
1,794
|
|
|
2,372
|
|
|
2,271
|
|
|||
Simponi
|
690
|
|
|
689
|
|
|
500
|
|
|||
Oncology
|
|
|
|
|
|
||||||
Keytruda
|
566
|
|
|
55
|
|
|
—
|
|
|||
Emend
|
535
|
|
|
553
|
|
|
507
|
|
|||
Temodar
|
312
|
|
|
350
|
|
|
708
|
|
|||
Diversified Brands
|
|
|
|
|
|
||||||
Respiratory
|
|
|
|
|
|
||||||
Singulair
|
931
|
|
|
1,092
|
|
|
1,196
|
|
|||
Nasonex
|
858
|
|
|
1,099
|
|
|
1,335
|
|
|||
Clarinex
|
187
|
|
|
232
|
|
|
235
|
|
|||
Other
|
|
|
|
|
|
||||||
Cozaar/Hyzaar
|
667
|
|
|
806
|
|
|
1,006
|
|
|||
Arcoxia
|
471
|
|
|
519
|
|
|
484
|
|
|||
Fosamax
|
359
|
|
|
470
|
|
|
560
|
|
|||
Zocor
|
217
|
|
|
258
|
|
|
301
|
|
|||
Propecia
|
183
|
|
|
264
|
|
|
283
|
|
|||
Vaccines
(2)
|
|
|
|
|
|
||||||
Gardasil/Gardasil
9
|
1,908
|
|
|
1,738
|
|
|
1,831
|
|
|||
ProQuad/M-M-R
II
/Varivax
|
1,505
|
|
|
1,394
|
|
|
1,306
|
|
|||
Zostavax
|
749
|
|
|
765
|
|
|
758
|
|
|||
RotaTeq
|
610
|
|
|
659
|
|
|
636
|
|
|||
Pneumovax
23
|
542
|
|
|
746
|
|
|
653
|
|
|||
Other pharmaceutical
(3)
|
4,553
|
|
|
5,356
|
|
|
6,596
|
|
|||
Total Pharmaceutical segment sales
|
34,782
|
|
|
36,042
|
|
|
37,437
|
|
|||
Other segment sales
(4)
|
3,659
|
|
|
5,758
|
|
|
6,397
|
|
|||
Total segment sales
|
38,441
|
|
|
41,800
|
|
|
43,834
|
|
|||
Other
(5)
|
1,057
|
|
|
437
|
|
|
199
|
|
|||
|
$
|
39,498
|
|
|
$
|
42,237
|
|
|
$
|
44,033
|
|
(1)
|
Sales of
Cubicin
in 2015 represent sales subsequent to the Cubist acquisition date. Sales of
Cubicin
in 2014 and 2013 reflect sales in Japan pursuant to a previously existing licensing agreement.
|
(2)
|
These amounts do not reflect sales of vaccines sold in most major European markets through the Company’s joint venture, Sanofi Pasteur MSD, the results of which are reflected in equity income from affiliates which is included in
Other (income) expense, net
. These amounts do, however, reflect supply sales to Sanofi Pasteur MSD.
|
(3)
|
Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
|
(4)
|
Represents the non-reportable segments of Animal Health, Alliances and Healthcare Services, as well as Consumer Care until its divestiture on October 1, 2014. The Alliances segment includes revenue from the Company’s relationship with AZLP until termination on June 30, 2014.
|
(5)
|
Other revenues are primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales. Other revenues in 2014 also include $232 million received by Merck in connection with the sale of the U.S. marketing rights to
Saphris.
Other revenues in 2013 reflect $50 million of revenue for the out-license of a pipeline compound.
|
($ in millions)
|
2015
|
|
Change
|
|
2014
|
|
Change
|
|
2013
|
||||||||
Materials and production
|
$
|
14,934
|
|
|
-11
|
%
|
|
$
|
16,768
|
|
|
-1
|
%
|
|
$
|
16,954
|
|
Marketing and administrative
|
10,313
|
|
|
-11
|
%
|
|
11,606
|
|
|
-3
|
%
|
|
11,911
|
|
|||
Research and development
(1)
|
6,704
|
|
|
-7
|
%
|
|
7,180
|
|
|
-4
|
%
|
|
7,503
|
|
|||
Restructuring costs
|
619
|
|
|
-39
|
%
|
|
1,013
|
|
|
-41
|
%
|
|
1,709
|
|
|||
Other (income) expense, net
|
1,527
|
|
|
*
|
|
|
(11,613
|
)
|
|
*
|
|
|
411
|
|
|||
|
$
|
34,097
|
|
|
37
|
%
|
|
$
|
24,954
|
|
|
-35
|
%
|
|
$
|
38,488
|
|
(1)
|
Includes
$63 million
,
$49 million
and
$279 million
of IPR&D impairment charges in
2015
,
2014
and
2013
, respectively.
|
Segment Profits
|
|
|
|
|
|
||||||
($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Pharmaceutical segment profits
|
$
|
21,658
|
|
|
$
|
22,164
|
|
|
$
|
22,983
|
|
Other non-reportable segment profits
|
1,659
|
|
|
2,458
|
|
|
3,049
|
|
|||
Other
|
(17,916
|
)
|
|
(7,339
|
)
|
|
(20,487
|
)
|
|||
Income before income taxes
|
$
|
5,401
|
|
|
$
|
17,283
|
|
|
$
|
5,545
|
|
($ in millions except per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Pretax income as reported under GAAP
|
$
|
5,401
|
|
|
$
|
17,283
|
|
|
$
|
5,545
|
|
Increase (decrease) for excluded items:
|
|
|
|
|
|
||||||
Acquisition and divestiture-related costs
|
5,398
|
|
|
5,946
|
|
|
5,549
|
|
|||
Restructuring costs
|
1,110
|
|
|
1,978
|
|
|
2,401
|
|
|||
Other items:
|
|
|
|
|
|
||||||
Foreign currency devaluation related to Venezuela
|
876
|
|
|
—
|
|
|
—
|
|
|||
Net charge related to the settlement of
Vioxx
shareholder class action litigation
|
680
|
|
|
—
|
|
|
—
|
|
|||
Gain sale of certain migraine clinical development programs
|
(250
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on the divestiture of certain ophthalmic products
|
(147
|
)
|
|
(480
|
)
|
|
—
|
|
|||
Gain on divestiture of Merck Consumer Care
|
—
|
|
|
(11,209
|
)
|
|
—
|
|
|||
Gain on AstraZeneca option exercise
|
—
|
|
|
(741
|
)
|
|
—
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
628
|
|
|
—
|
|
|||
Additional year of expense for health care reform fee
|
—
|
|
|
193
|
|
|
—
|
|
|||
Other
|
(34
|
)
|
|
(9
|
)
|
|
(13
|
)
|
|||
|
13,034
|
|
|
13,589
|
|
|
13,482
|
|
|||
Taxes on income as reported under GAAP
|
942
|
|
|
5,349
|
|
|
1,028
|
|
|||
Estimated tax benefit (provision) on excluded items
(1)
|
1,470
|
|
|
(2,345
|
)
|
|
1,573
|
|
|||
Net tax benefits from settlements of federal income tax issues
|
410
|
|
|
—
|
|
|
325
|
|
|||
Tax benefits related to sale of Sirna Therapeutics, Inc. subsidiary
|
—
|
|
|
300
|
|
|
—
|
|
|||
|
2,822
|
|
|
3,304
|
|
|
2,926
|
|
|||
Non-GAAP net income
|
10,212
|
|
|
10,285
|
|
|
10,556
|
|
|||
Less: Net income attributable to noncontrolling interests as reported under GAAP
|
17
|
|
|
14
|
|
|
113
|
|
|||
Acquisition and divestiture-related costs attributable to non-controlling interests
|
—
|
|
|
56
|
|
|
—
|
|
|||
|
17
|
|
|
70
|
|
|
113
|
|
|||
Non-GAAP net income attributable to Merck & Co., Inc.
|
$
|
10,195
|
|
|
$
|
10,215
|
|
|
$
|
10,443
|
|
EPS assuming dilution as reported under GAAP
|
$
|
1.56
|
|
|
$
|
4.07
|
|
|
$
|
1.47
|
|
EPS difference
(2)
|
2.03
|
|
|
(0.58
|
)
|
|
2.02
|
|
|||
Non-GAAP EPS assuming dilution
|
$
|
3.59
|
|
|
$
|
3.49
|
|
|
$
|
3.49
|
|
(1)
|
Amount for 2014 includes a net benefit of $517 million recorded in connection with AstraZeneca’s option exercise.
|
(2)
|
Represents the difference between calculated GAAP EPS and calculated non-GAAP EPS, which may be different than the amount calculated by dividing the impact of the excluded items by the weighted-average shares for the applicable year
.
|
($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Gardasil
|
$
|
184
|
|
|
$
|
248
|
|
|
$
|
291
|
|
Influenza vaccines
|
128
|
|
|
159
|
|
|
162
|
|
|||
Zostavax
|
87
|
|
|
103
|
|
|
68
|
|
|||
Other viral vaccines
|
77
|
|
|
87
|
|
|
104
|
|
|||
RotaTeq
|
56
|
|
|
65
|
|
|
55
|
|
|||
Hepatitis vaccines
|
62
|
|
|
38
|
|
|
31
|
|
|||
Other vaccines
|
329
|
|
|
430
|
|
|
453
|
|
|||
|
$
|
923
|
|
|
$
|
1,130
|
|
|
$
|
1,164
|
|
Selected Data
|
|
|
|
|
|
||||||
($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Working capital
|
$
|
10,561
|
|
|
$
|
14,208
|
|
|
$
|
17,469
|
|
Total debt to total liabilities and equity
|
26.1
|
%
|
|
21.8
|
%
|
|
23.8
|
%
|
|||
Cash provided by operations to total debt
|
0.5:1
|
|
|
0.4:1
|
|
|
0.5:1
|
|
Payments Due by Period
|
|
|
|
|
|
|
|
|
|
||||||||||
($ in millions)
|
Total
|
|
2016
|
|
2017—2018
|
|
2019—2020
|
|
Thereafter
|
||||||||||
Purchase obligations
(1)
|
$
|
2,333
|
|
|
$
|
605
|
|
|
$
|
786
|
|
|
$
|
435
|
|
|
$
|
507
|
|
Loans payable and current portion of long-term debt
(2)
|
2,585
|
|
|
2,585
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
23,785
|
|
|
—
|
|
|
3,328
|
|
|
3,216
|
|
|
17,241
|
|
|||||
Interest related to debt obligations
|
9,752
|
|
|
651
|
|
|
1,274
|
|
|
1,187
|
|
|
6,640
|
|
|||||
Vioxx
shareholder class action settlement reserve
(3)
|
1,062
|
|
|
1,062
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unrecognized tax benefits
(4)
|
1,244
|
|
|
1,244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
789
|
|
|
213
|
|
|
250
|
|
|
166
|
|
|
160
|
|
|||||
|
$
|
41,550
|
|
|
$
|
6,360
|
|
|
$
|
5,638
|
|
|
$
|
5,004
|
|
|
$
|
24,548
|
|
(1)
|
Includes future bulk supply purchases the Company has committed to in connection with certain divestitures.
|
(2)
|
In January 2016, $850 million of debt matured and was repaid.
|
(4)
|
As of
December 31, 2015
, the Company’s Consolidated Balance Sheet reflects liabilities for unrecognized tax benefits, interest and penalties of
$4.2 billion
, including
$1.2 billion
reflected as a current liability. Due to the high degree of uncertainty regarding the timing of future cash outflows of liabilities for unrecognized tax benefits beyond one year, a reasonable estimate of the period of cash settlement for years beyond
2016
cannot be made.
|
($ in millions)
|
2015
|
|||||||||
Debt Instrument
|
Par Value of Debt
|
|
Number of Interest Rate Swaps Held
|
|
Total Swap Notional Amount
|
|||||
0.70% notes due 2016
|
$
|
1,000
|
|
|
4
|
|
|
$
|
1,000
|
|
1.30% notes due 2018
|
1,000
|
|
|
4
|
|
|
1,000
|
|
||
5.00% notes due 2019
|
1,250
|
|
|
3
|
|
|
550
|
|
||
1.85% notes due 2020
|
1,250
|
|
|
5
|
|
|
1,250
|
|
||
3.875% notes due 2021
|
1,150
|
|
|
5
|
|
|
1,150
|
|
||
2.40% notes due 2022
|
1,000
|
|
|
4
|
|
|
1,000
|
|
||
2.35% notes due 2022
|
1,250
|
|
|
5
|
|
|
1,250
|
|
($ in millions)
|
2015
|
|
2014
|
||||
Balance January 1
|
$
|
2,154
|
|
|
$
|
1,688
|
|
Current provision
|
8,068
|
|
|
6,560
|
|
||
Adjustments to prior years
|
(77
|
)
|
|
(18
|
)
|
||
Payments
|
(7,347
|
)
|
|
(6,076
|
)
|
||
Balance December 31
|
$
|
2,798
|
|
|
$
|
2,154
|
|
Item 7a.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
(a)
|
Financial Statements
|
|
2015
|
|
2014
|
|
2013
|
||||||
Sales
|
$
|
39,498
|
|
|
$
|
42,237
|
|
|
$
|
44,033
|
|
Costs, Expenses and Other
|
|
|
|
|
|
||||||
Materials and production
|
14,934
|
|
|
16,768
|
|
|
16,954
|
|
|||
Marketing and administrative
|
10,313
|
|
|
11,606
|
|
|
11,911
|
|
|||
Research and development
|
6,704
|
|
|
7,180
|
|
|
7,503
|
|
|||
Restructuring costs
|
619
|
|
|
1,013
|
|
|
1,709
|
|
|||
Other (income) expense, net
|
1,527
|
|
|
(11,613
|
)
|
|
411
|
|
|||
|
34,097
|
|
|
24,954
|
|
|
38,488
|
|
|||
Income Before Taxes
|
5,401
|
|
|
17,283
|
|
|
5,545
|
|
|||
Taxes on Income
|
942
|
|
|
5,349
|
|
|
1,028
|
|
|||
Net Income
|
4,459
|
|
|
11,934
|
|
|
4,517
|
|
|||
Less: Net Income Attributable to Noncontrolling Interests
|
17
|
|
|
14
|
|
|
113
|
|
|||
Net Income Attributable to Merck & Co., Inc.
|
$
|
4,442
|
|
|
$
|
11,920
|
|
|
$
|
4,404
|
|
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders
|
$
|
1.58
|
|
|
$
|
4.12
|
|
|
$
|
1.49
|
|
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders
|
$
|
1.56
|
|
|
$
|
4.07
|
|
|
$
|
1.47
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Income Attributable to Merck & Co., Inc.
|
$
|
4,442
|
|
|
$
|
11,920
|
|
|
$
|
4,404
|
|
Other Comprehensive Income (Loss) Net of Taxes:
|
|
|
|
|
|
||||||
Net unrealized (loss) gain on derivatives, net of reclassifications
|
(126
|
)
|
|
398
|
|
|
229
|
|
|||
Net unrealized (loss) gain on investments, net of reclassifications
|
(70
|
)
|
|
57
|
|
|
(19
|
)
|
|||
Benefit plan net gain (loss) and prior service credit (cost), net of amortization
|
579
|
|
|
(2,077
|
)
|
|
2,758
|
|
|||
Cumulative translation adjustment
|
(208
|
)
|
|
(504
|
)
|
|
(483
|
)
|
|||
|
175
|
|
|
(2,126
|
)
|
|
2,485
|
|
|||
Comprehensive Income Attributable to Merck & Co., Inc.
|
$
|
4,617
|
|
|
$
|
9,794
|
|
|
$
|
6,889
|
|
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
8,524
|
|
|
$
|
7,441
|
|
Short-term investments
|
4,903
|
|
|
8,278
|
|
||
Accounts receivable (net of allowance for doubtful accounts of $165 in 2015
and $153 in 2014) (excludes accounts receivable of $10 in 2015 and $80
in 2014 classified in Other assets - see Note 5)
|
6,484
|
|
|
6,626
|
|
||
Inventories (excludes inventories of $1,569 in 2015 and $1,664
in 2014 classified in Other assets - see Note 6)
|
4,700
|
|
|
5,571
|
|
||
Other current assets
|
5,153
|
|
|
4,689
|
|
||
Total current assets
|
29,764
|
|
|
32,605
|
|
||
Investments
|
13,039
|
|
|
13,515
|
|
||
Property, Plant and Equipment (at cost)
|
|
|
|
||||
Land
|
490
|
|
|
541
|
|
||
Buildings
|
12,154
|
|
|
13,101
|
|
||
Machinery, equipment and office furnishings
|
14,261
|
|
|
16,050
|
|
||
Construction in progress
|
1,525
|
|
|
1,448
|
|
||
|
28,430
|
|
|
31,140
|
|
||
Less: accumulated depreciation
|
15,923
|
|
|
18,004
|
|
||
|
12,507
|
|
|
13,136
|
|
||
Goodwill
|
17,723
|
|
|
12,992
|
|
||
Other Intangibles, Net
|
22,602
|
|
|
20,386
|
|
||
Other Assets
|
6,144
|
|
|
5,533
|
|
||
|
$
|
101,779
|
|
|
$
|
98,167
|
|
Liabilities and Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Loans payable and current portion of long-term debt
|
$
|
2,585
|
|
|
$
|
2,704
|
|
Trade accounts payable
|
2,533
|
|
|
2,625
|
|
||
Accrued and other current liabilities
|
11,216
|
|
|
10,523
|
|
||
Income taxes payable
|
1,560
|
|
|
1,237
|
|
||
Dividends payable
|
1,309
|
|
|
1,308
|
|
||
Total current liabilities
|
19,203
|
|
|
18,397
|
|
||
Long-Term Debt
|
23,929
|
|
|
18,699
|
|
||
Deferred Income Taxes
|
6,535
|
|
|
4,467
|
|
||
Other Noncurrent Liabilities
|
7,345
|
|
|
7,813
|
|
||
Merck & Co., Inc. Stockholders’ Equity
|
|
|
|
||||
Common stock, $0.50 par value
Authorized - 6,500,000,000 shares
Issued - 3,577,103,522 shares in 2015 and 2014
|
1,788
|
|
|
1,788
|
|
||
Other paid-in capital
|
40,222
|
|
|
40,423
|
|
||
Retained earnings
|
45,348
|
|
|
46,021
|
|
||
Accumulated other comprehensive loss
|
(4,148
|
)
|
|
(4,323
|
)
|
||
|
83,210
|
|
|
83,909
|
|
||
Less treasury stock, at cost:
795,975,449 shares in 2015 and 738,963,326 shares in 2014
|
38,534
|
|
|
35,262
|
|
||
Total Merck & Co., Inc. stockholders’ equity
|
44,676
|
|
|
48,647
|
|
||
Noncontrolling Interests
|
91
|
|
|
144
|
|
||
Total equity
|
44,767
|
|
|
48,791
|
|
||
|
$
|
101,779
|
|
|
$
|
98,167
|
|
|
Common
Stock
|
|
Other
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Non-
controlling
Interests
|
|
Total
|
||||||||||||||
Balance January 1, 2013
|
|
$1,788
|
|
|
$
|
40,646
|
|
|
$
|
39,985
|
|
|
$
|
(4,682
|
)
|
|
$
|
(24,717
|
)
|
|
$
|
2,443
|
|
|
$
|
55,463
|
|
Net income attributable to Merck & Co., Inc.
|
—
|
|
|
—
|
|
|
4,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,404
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
2,485
|
|
|
—
|
|
|
—
|
|
|
2,485
|
|
|||||||
Cash dividends declared on common stock ($1.73 per share)
|
—
|
|
|
—
|
|
|
(5,132
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,132
|
)
|
|||||||
Treasury stock shares purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,516
|
)
|
|
—
|
|
|
(6,516
|
)
|
|||||||
Supera joint venture formation
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
228
|
|
|||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
113
|
|
|||||||
Distributions attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
(120
|
)
|
|||||||
Share-based compensation plans and other
|
—
|
|
|
(254
|
)
|
|
—
|
|
|
—
|
|
|
1,642
|
|
|
13
|
|
|
1,401
|
|
|||||||
Balance December 31, 2013
|
1,788
|
|
|
40,508
|
|
|
39,257
|
|
|
(2,197
|
)
|
|
(29,591
|
)
|
|
2,561
|
|
|
52,326
|
|
|||||||
Net income attributable to Merck & Co., Inc.
|
—
|
|
|
—
|
|
|
11,920
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,920
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,126
|
)
|
|
—
|
|
|
—
|
|
|
(2,126
|
)
|
|||||||
Cash dividends declared on common stock ($1.77 per share)
|
—
|
|
|
—
|
|
|
(5,156
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,156
|
)
|
|||||||
Treasury stock shares purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,703
|
)
|
|
—
|
|
|
(7,703
|
)
|
|||||||
AstraZeneca option exercise
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,400
|
)
|
|
(2,400
|
)
|
|||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|||||||
Distributions attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
|
(77
|
)
|
|||||||
Share-based compensation plans and other
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
2,032
|
|
|
46
|
|
|
1,993
|
|
|||||||
Balance December 31, 2014
|
1,788
|
|
|
40,423
|
|
|
46,021
|
|
|
(4,323
|
)
|
|
(35,262
|
)
|
|
144
|
|
|
48,791
|
|
|||||||
Net income attributable to Merck & Co., Inc.
|
—
|
|
|
—
|
|
|
4,442
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,442
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|||||||
Cash dividends declared on common stock ($1.81 per share)
|
—
|
|
|
—
|
|
|
(5,115
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,115
|
)
|
|||||||
Treasury stock shares purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,186
|
)
|
|
—
|
|
|
(4,186
|
)
|
|||||||
Changes in noncontrolling ownership interests
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
(75
|
)
|
|||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||||
Distributions attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||||||
Share-based compensation plans and other
|
—
|
|
|
(181
|
)
|
|
—
|
|
|
—
|
|
|
914
|
|
|
—
|
|
|
733
|
|
|||||||
Balance December 31, 2015
|
$
|
1,788
|
|
|
$
|
40,222
|
|
|
$
|
45,348
|
|
|
$
|
(4,148
|
)
|
|
$
|
(38,534
|
)
|
|
$
|
91
|
|
|
$
|
44,767
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
4,459
|
|
|
$
|
11,934
|
|
|
$
|
4,517
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
6,375
|
|
|
6,691
|
|
|
6,988
|
|
|||
Intangible asset impairment charges
|
162
|
|
|
1,222
|
|
|
765
|
|
|||
Foreign currency devaluation related to Venezuela
|
876
|
|
|
—
|
|
|
140
|
|
|||
Net charge related to the settlement of
Vioxx
shareholder class action litigation
|
680
|
|
|
—
|
|
|
—
|
|
|||
Gain on divestiture of Merck Consumer Care business
|
—
|
|
|
(11,209
|
)
|
|
—
|
|
|||
Gain on AstraZeneca option exercise
|
—
|
|
|
(741
|
)
|
|
—
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
628
|
|
|
—
|
|
|||
Equity income from affiliates
|
(205
|
)
|
|
(257
|
)
|
|
(404
|
)
|
|||
Dividends and distributions from equity method affiliates
|
50
|
|
|
185
|
|
|
237
|
|
|||
Deferred income taxes
|
(764
|
)
|
|
(2,600
|
)
|
|
(330
|
)
|
|||
Share-based compensation
|
299
|
|
|
278
|
|
|
276
|
|
|||
Other
|
757
|
|
|
(95
|
)
|
|
259
|
|
|||
Net changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(480
|
)
|
|
(554
|
)
|
|
436
|
|
|||
Inventories
|
805
|
|
|
79
|
|
|
(365
|
)
|
|||
Trade accounts payable
|
(37
|
)
|
|
593
|
|
|
522
|
|
|||
Accrued and other current liabilities
|
(8
|
)
|
|
1,635
|
|
|
(397
|
)
|
|||
Income taxes payable
|
(266
|
)
|
|
(21
|
)
|
|
(1,421
|
)
|
|||
Noncurrent liabilities
|
(277
|
)
|
|
190
|
|
|
(132
|
)
|
|||
Other
|
(5
|
)
|
|
(98
|
)
|
|
563
|
|
|||
Net Cash Provided by Operating Activities
|
12,421
|
|
|
7,860
|
|
|
11,654
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,283
|
)
|
|
(1,317
|
)
|
|
(1,548
|
)
|
|||
Purchases of securities and other investments
|
(16,681
|
)
|
|
(24,944
|
)
|
|
(17,991
|
)
|
|||
Proceeds from sales of securities and other investments
|
20,413
|
|
|
15,114
|
|
|
16,298
|
|
|||
Divestiture of Merck Consumer Care business, net of cash divested
|
—
|
|
|
13,951
|
|
|
—
|
|
|||
Dispositions of other businesses, net of cash divested
|
316
|
|
|
1,169
|
|
|
46
|
|
|||
Proceeds from AstraZeneca option exercise
|
—
|
|
|
419
|
|
|
—
|
|
|||
Acquisition of Cubist Pharmaceuticals, Inc., net of cash acquired
|
(7,598
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of Idenix Pharmaceuticals, Inc., net of cash acquired
|
—
|
|
|
(3,700
|
)
|
|
—
|
|
|||
Acquisitions of other businesses, net of cash acquired
|
(146
|
)
|
|
(181
|
)
|
|
(246
|
)
|
|||
Acquisition of Bayer AG collaboration rights
|
—
|
|
|
(1,000
|
)
|
|
—
|
|
|||
Cash inflows from net investment hedges
|
139
|
|
|
195
|
|
|
350
|
|
|||
Other
|
82
|
|
|
(80
|
)
|
|
(57
|
)
|
|||
Net Cash Used in Investing Activities
|
(4,758
|
)
|
|
(374
|
)
|
|
(3,148
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Net change in short-term borrowings
|
(1,540
|
)
|
|
(460
|
)
|
|
(159
|
)
|
|||
Payments on debt
|
(2,906
|
)
|
|
(6,617
|
)
|
|
(1,775
|
)
|
|||
Proceeds from issuance of debt
|
7,938
|
|
|
3,146
|
|
|
6,467
|
|
|||
Purchases of treasury stock
|
(4,186
|
)
|
|
(7,703
|
)
|
|
(6,516
|
)
|
|||
Dividends paid to stockholders
|
(5,117
|
)
|
|
(5,170
|
)
|
|
(5,157
|
)
|
|||
Other dividends paid
|
—
|
|
|
(77
|
)
|
|
(120
|
)
|
|||
Proceeds from exercise of stock options
|
485
|
|
|
1,560
|
|
|
1,210
|
|
|||
Other
|
56
|
|
|
208
|
|
|
60
|
|
|||
Net Cash Used in Financing Activities
|
(5,270
|
)
|
|
(15,113
|
)
|
|
(5,990
|
)
|
|||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
(1,310
|
)
|
|
(553
|
)
|
|
(346
|
)
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
1,083
|
|
|
(8,180
|
)
|
|
2,170
|
|
|||
Cash and Cash Equivalents at Beginning of Year
|
7,441
|
|
|
15,621
|
|
|
13,451
|
|
|||
Cash and Cash Equivalents at End of Year
|
$
|
8,524
|
|
|
$
|
7,441
|
|
|
$
|
15,621
|
|
Year Ended December 31, 2015
|
Separation
Costs
|
|
Accelerated
Depreciation
|
|
Other
|
|
Total
|
||||||||
2013 Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Materials and production
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
2
|
|
|
$
|
43
|
|
Marketing and administrative
|
—
|
|
|
52
|
|
|
18
|
|
|
70
|
|
||||
Research and development
|
—
|
|
|
36
|
|
|
15
|
|
|
51
|
|
||||
Restructuring costs
|
199
|
|
|
—
|
|
|
164
|
|
|
363
|
|
||||
|
199
|
|
|
129
|
|
|
199
|
|
|
527
|
|
||||
Merger Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Materials and production
|
—
|
|
|
37
|
|
|
281
|
|
|
318
|
|
||||
Marketing and administrative
|
—
|
|
|
7
|
|
|
1
|
|
|
8
|
|
||||
Research and development
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Restructuring costs
|
9
|
|
|
—
|
|
|
247
|
|
|
256
|
|
||||
|
9
|
|
|
45
|
|
|
529
|
|
|
583
|
|
||||
|
$
|
208
|
|
|
$
|
174
|
|
|
$
|
728
|
|
|
$
|
1,110
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
||||||||
2013 Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Materials and production
|
$
|
—
|
|
|
$
|
204
|
|
|
$
|
23
|
|
|
$
|
227
|
|
Marketing and administrative
|
—
|
|
|
142
|
|
|
3
|
|
|
145
|
|
||||
Research and development
|
—
|
|
|
273
|
|
|
9
|
|
|
282
|
|
||||
Restructuring costs
|
566
|
|
|
—
|
|
|
28
|
|
|
594
|
|
||||
|
566
|
|
|
619
|
|
|
63
|
|
|
1,248
|
|
||||
Merger Restructuring Program
|
|
|
|
|
|
|
|
|
|||||||
Materials and production
|
—
|
|
|
225
|
|
|
30
|
|
|
255
|
|
||||
Marketing and administrative
|
—
|
|
|
56
|
|
|
(1
|
)
|
|
55
|
|
||||
Research and development
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Restructuring costs
|
108
|
|
|
—
|
|
|
311
|
|
|
419
|
|
||||
|
108
|
|
|
281
|
|
|
341
|
|
|
730
|
|
||||
|
$
|
674
|
|
|
$
|
900
|
|
|
$
|
404
|
|
|
$
|
1,978
|
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
2013 Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Materials and production
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
7
|
|
|
$
|
193
|
|
Marketing and administrative
|
—
|
|
|
72
|
|
|
3
|
|
|
75
|
|
||||
Research and development
|
—
|
|
|
76
|
|
|
(1
|
)
|
|
75
|
|
||||
Restructuring costs
|
866
|
|
|
—
|
|
|
32
|
|
|
898
|
|
||||
|
866
|
|
|
334
|
|
|
41
|
|
|
1,241
|
|
||||
Merger Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Materials and production
|
—
|
|
|
151
|
|
|
98
|
|
|
249
|
|
||||
Marketing and administrative
|
—
|
|
|
63
|
|
|
3
|
|
|
66
|
|
||||
Research and development
|
—
|
|
|
27
|
|
|
(1
|
)
|
|
26
|
|
||||
Restructuring costs
|
481
|
|
|
—
|
|
|
284
|
|
|
765
|
|
||||
|
481
|
|
|
241
|
|
|
384
|
|
|
1,106
|
|
||||
2008 Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Materials and production
|
—
|
|
|
(2
|
)
|
|
6
|
|
|
4
|
|
||||
Marketing and administrative
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Restructuring costs
|
34
|
|
|
—
|
|
|
12
|
|
|
46
|
|
||||
|
34
|
|
|
2
|
|
|
18
|
|
|
54
|
|
||||
|
$
|
1,381
|
|
|
$
|
577
|
|
|
$
|
443
|
|
|
$
|
2,401
|
|
|
Separation
Costs
|
|
Accelerated
Depreciation
|
|
Other
|
|
Total
|
||||||||
2013 Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Restructuring reserves January 1, 2014
|
$
|
745
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
768
|
|
Expenses
|
566
|
|
|
619
|
|
|
63
|
|
|
1,248
|
|
||||
(Payments) receipts, net
|
(816
|
)
|
|
—
|
|
|
(124
|
)
|
|
(940
|
)
|
||||
Non-cash activity
|
—
|
|
|
(619
|
)
|
|
52
|
|
|
(567
|
)
|
||||
Restructuring reserves December 31, 2014
|
495
|
|
|
—
|
|
|
14
|
|
|
509
|
|
||||
Expenses
|
199
|
|
|
129
|
|
|
199
|
|
|
527
|
|
||||
(Payments) receipts, net
|
(425
|
)
|
|
—
|
|
|
(212
|
)
|
|
(637
|
)
|
||||
Non-cash activity
|
—
|
|
|
(129
|
)
|
|
1
|
|
|
(128
|
)
|
||||
Restructuring reserves December 31, 2015
(1)
|
$
|
269
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
271
|
|
Merger Restructuring Program
|
|
|
|
|
|
|
|
||||||||
Restructuring reserves January 1, 2014
|
$
|
725
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
737
|
|
Expenses
|
108
|
|
|
281
|
|
|
341
|
|
|
730
|
|
||||
(Payments) receipts, net
|
(297
|
)
|
|
—
|
|
|
(232
|
)
|
|
(529
|
)
|
||||
Non-cash activity
|
—
|
|
|
(281
|
)
|
|
(115
|
)
|
|
(396
|
)
|
||||
Restructuring reserves December 31, 2014
|
536
|
|
|
—
|
|
|
6
|
|
|
542
|
|
||||
Expenses
|
9
|
|
|
45
|
|
|
529
|
|
|
583
|
|
||||
(Payments) receipts, net
|
(222
|
)
|
|
—
|
|
|
(223
|
)
|
|
(445
|
)
|
||||
Non-cash activity
|
—
|
|
|
(45
|
)
|
|
(261
|
)
|
|
(306
|
)
|
||||
Restructuring reserves December 31, 2015
(1)
|
$
|
323
|
|
|
$
|
—
|
|
|
$
|
51
|
|
|
$
|
374
|
|
(1)
|
The non-facility related cash outlays associated with both the 2013 Restructuring Program and the Merger Restructuring Program were substantially completed by the end of 2015; the remaining cash outlays are expected to be substantially completed by the end of 2017.
|
Cash and cash equivalents
|
$
|
733
|
|
Accounts receivable
|
123
|
|
|
Inventories
|
216
|
|
|
Other current assets
|
55
|
|
|
Property, plant and equipment
|
151
|
|
|
Identifiable intangible assets:
|
|
||
Products and product rights (11 year weighted-average useful life)
|
6,923
|
|
|
IPR&D
|
50
|
|
|
Other noncurrent assets
|
184
|
|
|
Current liabilities
(1)
|
(233
|
)
|
|
Deferred income tax liabilities
|
(2,519
|
)
|
|
Long-term debt
|
(1,900
|
)
|
|
Other noncurrent liabilities
(1)
|
(122
|
)
|
|
Total identifiable net assets
|
3,661
|
|
|
Goodwill
(2)
|
4,670
|
|
|
Consideration transferred
|
$
|
8,331
|
|
(1)
|
Included in current liabilities and other noncurrent liabilities is contingent consideration of
$73 million
and
$50 million
, respectively.
|
(2)
|
The goodwill recognized is largely attributable to anticipated synergies expected to arise after the acquisition and was allocated to the Pharmaceutical segment. The goodwill is not deductible for tax purposes.
|
Years Ended December 31
|
2015
|
|
2014
|
||||
Sales
|
$
|
39,584
|
|
|
$
|
43,437
|
|
Net income attributable to Merck & Co., Inc.
|
4,640
|
|
|
10,887
|
|
||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
1.65
|
|
|
3.76
|
|
||
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
1.63
|
|
|
3.72
|
|
|
2015
|
|||||||||
Debt Instrument
|
Par Value of Debt
|
|
Number of Interest Rate Swaps Held
|
|
Total Swap Notional Amount
|
|||||
0.70% notes due 2016
|
$
|
1,000
|
|
|
4
|
|
|
$
|
1,000
|
|
1.30% notes due 2018
|
1,000
|
|
|
4
|
|
|
1,000
|
|
||
5.00% notes due 2019
|
1,250
|
|
|
3
|
|
|
550
|
|
||
1.85% notes due 2020
|
1,250
|
|
|
5
|
|
|
1,250
|
|
||
3.875% notes due 2021
|
1,150
|
|
|
5
|
|
|
1,150
|
|
||
2.40% notes due 2022
|
1,000
|
|
|
4
|
|
|
1,000
|
|
||
2.35% notes due 2022
|
1,250
|
|
|
5
|
|
|
1,250
|
|
|
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
|
|
Fair Value of
Derivative
|
|
U.S. Dollar
Notional
|
|
Fair Value of
Derivative
|
|
U.S. Dollar
Notional
|
||||||||||||||||
|
Balance Sheet Caption
|
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
|
|||||||||||||||
Derivatives Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swap contracts (noncurrent)
|
Other assets
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
2,700
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
1,950
|
|
Interest rate swap contracts (current)
|
Accrued and other current liabilities
|
|
—
|
|
|
1
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate swap contracts (noncurrent)
|
Other noncurrent liabilities
|
|
—
|
|
|
23
|
|
|
3,500
|
|
|
—
|
|
|
15
|
|
|
2,000
|
|
||||||
Foreign exchange contracts (current)
|
Other current assets
|
|
579
|
|
|
—
|
|
|
4,171
|
|
|
772
|
|
|
—
|
|
|
5,513
|
|
||||||
Foreign exchange contracts (noncurrent)
|
Other assets
|
|
386
|
|
|
—
|
|
|
4,136
|
|
|
691
|
|
|
—
|
|
|
6,253
|
|
||||||
Foreign exchange contracts (current)
|
Accrued and other current liabilities
|
|
—
|
|
|
1
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
$
|
1,007
|
|
|
$
|
25
|
|
|
$
|
15,584
|
|
|
$
|
1,482
|
|
|
$
|
15
|
|
|
$
|
15,716
|
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts (current)
|
Other current assets
|
|
$
|
212
|
|
|
$
|
—
|
|
|
$
|
8,783
|
|
|
$
|
365
|
|
|
$
|
—
|
|
|
$
|
6,966
|
|
Foreign exchange contracts (noncurrent)
|
Other assets
|
|
18
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign exchange contracts (current)
|
Accrued and other current liabilities
|
|
—
|
|
|
37
|
|
|
2,508
|
|
|
—
|
|
|
88
|
|
|
3,386
|
|
||||||
Foreign exchange contracts (noncurrent)
|
Other noncurrent liabilities
|
|
—
|
|
|
1
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
$
|
230
|
|
|
$
|
38
|
|
|
$
|
11,476
|
|
|
$
|
365
|
|
|
$
|
88
|
|
|
$
|
10,352
|
|
|
|
|
$
|
1,237
|
|
|
$
|
63
|
|
|
$
|
27,060
|
|
|
$
|
1,847
|
|
|
$
|
103
|
|
|
$
|
26,068
|
|
|
2015
|
|
2014
|
||||||||||||
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||
Gross amounts recognized in the consolidated balance sheet
|
$
|
1,237
|
|
|
$
|
63
|
|
|
$
|
1,847
|
|
|
$
|
103
|
|
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet
|
(59
|
)
|
|
(59
|
)
|
|
(97
|
)
|
|
(97
|
)
|
||||
Cash collateral (received) posted
|
(862
|
)
|
|
—
|
|
|
(1,410
|
)
|
|
—
|
|
||||
Net amounts
|
$
|
316
|
|
|
$
|
4
|
|
|
$
|
340
|
|
|
$
|
6
|
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Derivatives designated in a fair value hedging relationship
|
|
|
|
|
|
||||||
Interest rate swap contracts
|
|
|
|
|
|
||||||
Amount of (gain) loss recognized in
Other (income) expense, net
on derivatives
(1)
|
$
|
(14
|
)
|
|
$
|
(17
|
)
|
|
$
|
12
|
|
Amount of loss (gain) recognized in
Other (income) expense, net
on hedged item
(1)
|
7
|
|
|
14
|
|
|
(14
|
)
|
|||
Derivatives designated in foreign currency cash flow hedging relationships
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
|
|
|
|
||||||
Amount of (gain) loss reclassified from
AOCI
to
Sales
|
(724
|
)
|
|
(143
|
)
|
|
45
|
|
|||
Amount of gain recognized in
OCI
on derivatives
|
(526
|
)
|
|
(775
|
)
|
|
(306
|
)
|
|||
Derivatives designated in foreign currency net investment hedging relationships
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
|
|
|
|
||||||
Amount of gain recognized in
Other (income) expense, net
on derivatives
(2)
|
(4
|
)
|
|
(6
|
)
|
|
(10
|
)
|
|||
Amount of gain recognized in
OCI
on derivatives
|
(10
|
)
|
|
(192
|
)
|
|
(363
|
)
|
|||
Derivatives not designated in a hedging relationship
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
|
|
|
|
|
||||||
Amount of (gain) loss recognized in
Other (income) expense, net
on derivatives
(3)
|
(461
|
)
|
|
(516
|
)
|
|
183
|
|
|||
Amount of (gain) loss recognized in
Sales
|
(1
|
)
|
|
15
|
|
|
8
|
|
(1)
|
There was
$7 million
,
$3 million
and
$2 million
of ineffectiveness on the hedge during
2015
,
2014
and
2013
, respectively.
|
(2)
|
There was no ineffectiveness on the hedge. Represents the amount excluded from hedge effectiveness testing.
|
(3)
|
These derivative contracts mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates.
|
|
2015
|
|
2014
|
||||||||||||||||||||||||||||
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross Unrealized
|
||||||||||||||||||||
|
Gains
|
|
Losses
|
|
Gains
|
|
Losses
|
||||||||||||||||||||||||
Corporate notes and bonds
|
$
|
10,259
|
|
|
$
|
10,299
|
|
|
$
|
7
|
|
|
$
|
(47
|
)
|
|
$
|
10,107
|
|
|
$
|
10,102
|
|
|
$
|
22
|
|
|
$
|
(17
|
)
|
Commercial paper
|
2,977
|
|
|
2,977
|
|
|
—
|
|
|
—
|
|
|
6,970
|
|
|
6,970
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. government and agency securities
|
1,761
|
|
|
1,767
|
|
|
—
|
|
|
(6
|
)
|
|
1,774
|
|
|
1,775
|
|
|
1
|
|
|
(2
|
)
|
||||||||
Asset-backed securities
|
1,284
|
|
|
1,290
|
|
|
—
|
|
|
(6
|
)
|
|
1,460
|
|
|
1,462
|
|
|
1
|
|
|
(3
|
)
|
||||||||
Mortgage-backed securities
|
694
|
|
|
697
|
|
|
1
|
|
|
(4
|
)
|
|
602
|
|
|
604
|
|
|
2
|
|
|
(4
|
)
|
||||||||
Foreign government bonds
|
607
|
|
|
586
|
|
|
22
|
|
|
(1
|
)
|
|
385
|
|
|
385
|
|
|
—
|
|
|
—
|
|
||||||||
Equity securities
|
534
|
|
|
409
|
|
|
125
|
|
|
—
|
|
|
730
|
|
|
557
|
|
|
173
|
|
|
—
|
|
||||||||
|
$
|
18,116
|
|
|
$
|
18,025
|
|
|
$
|
155
|
|
|
$
|
(64
|
)
|
|
$
|
22,028
|
|
|
$
|
21,855
|
|
|
$
|
199
|
|
|
$
|
(26
|
)
|
|
Fair Value Measurements Using
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||||||||
|
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate notes and bonds
|
$
|
—
|
|
|
$
|
10,259
|
|
|
$
|
—
|
|
|
$
|
10,259
|
|
|
$
|
—
|
|
|
$
|
10,107
|
|
|
$
|
—
|
|
|
$
|
10,107
|
|
Commercial paper
|
—
|
|
|
2,977
|
|
|
—
|
|
|
2,977
|
|
|
—
|
|
|
6,970
|
|
|
—
|
|
|
6,970
|
|
||||||||
U.S. government and agency securities
|
—
|
|
|
1,761
|
|
|
—
|
|
|
1,761
|
|
|
—
|
|
|
1,774
|
|
|
—
|
|
|
1,774
|
|
||||||||
Asset-backed securities
(1)
|
—
|
|
|
1,284
|
|
|
—
|
|
|
1,284
|
|
|
—
|
|
|
1,460
|
|
|
—
|
|
|
1,460
|
|
||||||||
Mortgage-backed securities
(1)
|
—
|
|
|
694
|
|
|
—
|
|
|
694
|
|
|
—
|
|
|
602
|
|
|
—
|
|
|
602
|
|
||||||||
Foreign government bonds
|
—
|
|
|
607
|
|
|
—
|
|
|
607
|
|
|
—
|
|
|
385
|
|
|
—
|
|
|
385
|
|
||||||||
Equity securities
|
360
|
|
|
—
|
|
|
—
|
|
|
360
|
|
|
495
|
|
|
—
|
|
|
—
|
|
|
495
|
|
||||||||
|
360
|
|
|
17,582
|
|
|
—
|
|
|
17,942
|
|
|
495
|
|
|
21,298
|
|
|
—
|
|
|
21,793
|
|
||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities held for employee compensation
|
155
|
|
|
19
|
|
|
—
|
|
|
174
|
|
|
181
|
|
|
54
|
|
|
—
|
|
|
235
|
|
||||||||
Derivative assets
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchased currency options
|
—
|
|
|
1,041
|
|
|
—
|
|
|
1,041
|
|
|
—
|
|
|
1,252
|
|
|
—
|
|
|
1,252
|
|
||||||||
Forward exchange contracts
|
—
|
|
|
154
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
576
|
|
|
—
|
|
|
576
|
|
||||||||
Interest rate swaps
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||||
|
—
|
|
|
1,237
|
|
|
—
|
|
|
1,237
|
|
|
—
|
|
|
1,847
|
|
|
—
|
|
|
1,847
|
|
||||||||
Total assets
|
$
|
515
|
|
|
$
|
18,838
|
|
|
$
|
—
|
|
|
$
|
19,353
|
|
|
$
|
676
|
|
|
$
|
23,199
|
|
|
$
|
—
|
|
|
$
|
23,875
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
590
|
|
|
$
|
590
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
428
|
|
|
$
|
428
|
|
Derivative liabilities
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward exchange contracts
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||||||
Written currency options
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||||||
Interest rate swaps
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||||
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
103
|
|
|
—
|
|
|
103
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
63
|
|
|
$
|
590
|
|
|
$
|
653
|
|
|
$
|
—
|
|
|
$
|
103
|
|
|
$
|
428
|
|
|
$
|
531
|
|
(1)
|
Primarily all of the asset-backed securities are highly-rated (Standard & Poor’s rating of AAA and Moody’s Investors Service rating of Aaa), secured primarily by credit card, auto loan, and home equity receivables, with weighted-average lives of primarily
5
years or less. Mortgage-backed securities represent AAA-rated securities issued or unconditionally guaranteed as to payment of principal and interest by U.S. government agencies.
|
(2)
|
The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
|
|
2015
|
|
2014
|
||||
Fair value January 1
|
$
|
428
|
|
|
$
|
69
|
|
Changes in fair value
(1)
|
(16
|
)
|
|
316
|
|
||
Additions
|
228
|
|
|
43
|
|
||
Payments
|
(50
|
)
|
|
—
|
|
||
Fair value December 31
|
$
|
590
|
|
|
$
|
428
|
|
|
2015
|
|
2014
|
||||
Finished goods
|
$
|
1,343
|
|
|
$
|
1,588
|
|
Raw materials and work in process
|
4,374
|
|
|
5,141
|
|
||
Supplies
|
168
|
|
|
197
|
|
||
Total (approximates current cost)
|
5,885
|
|
|
6,926
|
|
||
Increase to LIFO costs
|
384
|
|
|
309
|
|
||
|
$
|
6,269
|
|
|
$
|
7,235
|
|
Recognized as:
|
|
|
|
||||
Inventories
|
$
|
4,700
|
|
|
$
|
5,571
|
|
Other assets
|
1,569
|
|
|
1,664
|
|
|
Pharmaceutical
|
|
|
All Other
|
|
|
Total
|
|
|||
Balance January 1, 2014
|
$
|
10,065
|
|
|
$
|
2,236
|
|
|
$
|
12,301
|
|
Acquisitions
|
1,369
|
|
|
38
|
|
|
1,407
|
|
|||
Divestitures
|
(200
|
)
|
|
(362
|
)
|
|
(562
|
)
|
|||
Impairments
|
(93
|
)
|
|
—
|
|
|
(93
|
)
|
|||
Other
(1)
|
(33
|
)
|
|
(28
|
)
|
|
(61
|
)
|
|||
Balance December 31, 2014
|
11,108
|
|
|
1,884
|
|
|
12,992
|
|
|||
Acquisitions
|
4,684
|
|
|
29
|
|
|
4,713
|
|
|||
Divestitures
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||
Impairments
|
—
|
|
|
(47
|
)
|
|
(47
|
)
|
|||
Other
(1)
|
88
|
|
|
(5
|
)
|
|
83
|
|
|||
Balance December 31, 2015
(2)
|
$
|
15,862
|
|
|
$
|
1,861
|
|
|
$
|
17,723
|
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Products and product rights
|
$
|
45,949
|
|
|
$
|
28,514
|
|
|
$
|
17,435
|
|
|
$
|
38,714
|
|
|
$
|
23,830
|
|
|
$
|
14,884
|
|
In-process research and development
|
4,226
|
|
|
—
|
|
|
4,226
|
|
|
4,345
|
|
|
—
|
|
|
4,345
|
|
||||||
Tradenames
|
198
|
|
|
79
|
|
|
119
|
|
|
198
|
|
|
71
|
|
|
127
|
|
||||||
Other
|
1,418
|
|
|
596
|
|
|
822
|
|
|
1,527
|
|
|
497
|
|
|
1,030
|
|
||||||
|
$
|
51,791
|
|
|
$
|
29,189
|
|
|
$
|
22,602
|
|
|
$
|
44,784
|
|
|
$
|
24,398
|
|
|
$
|
20,386
|
|
Years Ended December 31
|
2014
(1)
|
|
2013
|
||||
Sales
|
$
|
2,205
|
|
|
$
|
4,611
|
|
Materials and production costs
|
1,044
|
|
|
2,222
|
|
||
Other expense, net
|
604
|
|
|
1,175
|
|
||
Income before taxes
(2)
|
557
|
|
|
1,214
|
|
|
2015
|
|
2014
|
||||
2.75% notes due 2025
|
$
|
2,496
|
|
|
$
|
—
|
|
3.70% notes due 2045
|
1,989
|
|
|
—
|
|
||
2.80% notes due 2023
|
1,749
|
|
|
1,749
|
|
||
5.00% notes due 2019
|
1,285
|
|
|
1,291
|
|
||
4.15% notes due 2043
|
1,247
|
|
|
1,246
|
|
||
1.85% notes due 2020
|
1,243
|
|
|
—
|
|
||
2.35% notes due 2022
|
1,237
|
|
|
—
|
|
||
3.875% notes due 2021
|
1,161
|
|
|
1,150
|
|
||
1.125% euro-denominated notes due 2021
|
1,096
|
|
|
1,218
|
|
||
1.875% euro-denominated notes due 2026
|
1,090
|
|
|
1,210
|
|
||
2.40% notes due 2022
|
1,014
|
|
|
1,000
|
|
||
Floating-rate borrowing due 2018
|
1,000
|
|
|
1,000
|
|
||
1.10% notes due 2018
|
999
|
|
|
999
|
|
||
1.30% notes due 2018
|
987
|
|
|
984
|
|
||
6.50% notes due 2033
|
809
|
|
|
812
|
|
||
Floating-rate notes due 2020
|
700
|
|
|
—
|
|
||
6.55% notes due 2037
|
596
|
|
|
597
|
|
||
2.50% euro-denominated notes due 2034
|
543
|
|
|
603
|
|
||
3.60% notes due 2042
|
493
|
|
|
493
|
|
||
5.85% notes due 2039
|
418
|
|
|
418
|
|
||
5.75% notes due 2036
|
371
|
|
|
371
|
|
||
5.95% debentures due 2028
|
356
|
|
|
356
|
|
||
6.40% debentures due 2028
|
326
|
|
|
326
|
|
||
Floating-rate notes due 2017
|
300
|
|
|
—
|
|
||
6.30% debentures due 2026
|
152
|
|
|
152
|
|
||
0.70% notes due 2016
|
—
|
|
|
998
|
|
||
2.25% notes due 2016
|
—
|
|
|
858
|
|
||
Floating-rate borrowing due 2016
|
—
|
|
|
500
|
|
||
Other
|
272
|
|
|
368
|
|
||
|
$
|
23,929
|
|
|
$
|
18,699
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
Common
Stock
|
|
Treasury
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
||||||
Balance January 1
|
3,577
|
|
|
739
|
|
|
3,577
|
|
|
650
|
|
|
3,577
|
|
|
550
|
|
Purchases of treasury stock
|
—
|
|
|
75
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
139
|
|
Issuances
(1)
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|
(39
|
)
|
Balance December 31
|
3,577
|
|
|
796
|
|
|
3,577
|
|
|
739
|
|
|
3,577
|
|
|
650
|
|
(1)
|
Issuances primarily reflect activity under share-based compensation plans.
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
|||
Expected dividend yield
|
4.1
|
%
|
|
4.3
|
%
|
|
4.2
|
%
|
Risk-free interest rate
|
1.7
|
%
|
|
2.0
|
%
|
|
1.2
|
%
|
Expected volatility
|
19.9
|
%
|
|
22.0
|
%
|
|
25.0
|
%
|
Expected life (years)
|
6.2
|
|
|
6.4
|
|
|
7.0
|
|
|
Number
of Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding January 1, 2015
|
76,135
|
|
|
$
|
39.05
|
|
|
|
|
|
||
Granted
|
5,565
|
|
|
59.73
|
|
|
|
|
|
|||
Exercised
|
(13,779
|
)
|
|
35.23
|
|
|
|
|
|
|||
Forfeited
|
(3,253
|
)
|
|
39.10
|
|
|
|
|
|
|||
Outstanding December 31, 2015
|
64,668
|
|
|
$
|
41.64
|
|
|
3.71
|
|
$
|
785
|
|
Exercisable December 31, 2015
|
54,990
|
|
|
$
|
39.12
|
|
|
2.87
|
|
$
|
765
|
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Total intrinsic value of stock options exercised
|
$
|
332
|
|
|
$
|
626
|
|
|
$
|
374
|
|
Fair value of stock options vested
|
30
|
|
|
35
|
|
|
42
|
|
|||
Cash received from the exercise of stock options
|
485
|
|
|
1,560
|
|
|
1,210
|
|
|
|
RSUs
|
|
PSUs
|
||||||||||
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Nonvested January 1, 2015
|
|
15,634
|
|
|
$
|
46.66
|
|
|
1,882
|
|
|
$
|
52.81
|
|
Granted
|
|
4,562
|
|
|
59.66
|
|
|
909
|
|
|
51.84
|
|
||
Vested
|
|
(5,774
|
)
|
|
39.45
|
|
|
(743
|
)
|
|
44.58
|
|
||
Forfeited
|
|
(1,022
|
)
|
|
52.64
|
|
|
(164
|
)
|
|
55.66
|
|
||
Nonvested December 31, 2015
|
|
13,400
|
|
|
$
|
53.73
|
|
|
1,884
|
|
|
$
|
55.33
|
|
|
Pension Benefits
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
Other Postretirement Benefits
|
||||||||||||||||||||||||||||||
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
Service cost
|
$
|
307
|
|
|
$
|
300
|
|
|
$
|
386
|
|
|
$
|
251
|
|
|
$
|
266
|
|
|
$
|
296
|
|
|
$
|
80
|
|
|
$
|
78
|
|
|
$
|
102
|
|
Interest cost
|
434
|
|
|
425
|
|
|
402
|
|
|
206
|
|
|
269
|
|
|
263
|
|
|
110
|
|
|
115
|
|
|
107
|
|
|||||||||
Expected return on plan assets
|
(819
|
)
|
|
(782
|
)
|
|
(721
|
)
|
|
(379
|
)
|
|
(416
|
)
|
|
(376
|
)
|
|
(143
|
)
|
|
(139
|
)
|
|
(126
|
)
|
|||||||||
Net amortization
|
158
|
|
|
74
|
|
|
251
|
|
|
104
|
|
|
59
|
|
|
85
|
|
|
(59
|
)
|
|
(71
|
)
|
|
(50
|
)
|
|||||||||
Termination benefits
|
22
|
|
|
53
|
|
|
51
|
|
|
1
|
|
|
11
|
|
|
7
|
|
|
7
|
|
|
22
|
|
|
50
|
|
|||||||||
Curtailments
|
(12
|
)
|
|
(69
|
)
|
|
(22
|
)
|
|
(9
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(19
|
)
|
|
(39
|
)
|
|
(11
|
)
|
|||||||||
Settlements
|
1
|
|
|
11
|
|
|
1
|
|
|
12
|
|
|
6
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net periodic benefit cost (credit)
|
$
|
91
|
|
|
$
|
12
|
|
|
$
|
348
|
|
|
$
|
186
|
|
|
$
|
191
|
|
|
$
|
296
|
|
|
$
|
(24
|
)
|
|
$
|
(34
|
)
|
|
$
|
72
|
|
|
Pension Benefits
|
|
Other
Postretirement
Benefits
|
||||||||||||||||||||
|
U.S.
|
|
International
|
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Fair value of plan assets January 1
|
$
|
9,984
|
|
|
$
|
10,007
|
|
|
$
|
7,724
|
|
|
$
|
7,428
|
|
|
$
|
1,984
|
|
|
$
|
1,913
|
|
Actual return on plan assets
|
(226
|
)
|
|
484
|
|
|
138
|
|
|
1,099
|
|
|
(34
|
)
|
|
114
|
|
||||||
Company contributions
|
66
|
|
|
92
|
|
|
163
|
|
|
276
|
|
|
63
|
|
|
67
|
|
||||||
Effects of exchange rate changes
|
—
|
|
|
—
|
|
|
(568
|
)
|
|
(816
|
)
|
|
(1
|
)
|
|
—
|
|
||||||
Benefits paid
|
(523
|
)
|
|
(535
|
)
|
|
(196
|
)
|
|
(245
|
)
|
|
(99
|
)
|
|
(110
|
)
|
||||||
Settlements
|
(35
|
)
|
|
(64
|
)
|
|
(66
|
)
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
9
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets December 31
|
$
|
9,266
|
|
|
$
|
9,984
|
|
|
$
|
7,204
|
|
|
$
|
7,724
|
|
|
$
|
1,913
|
|
|
$
|
1,984
|
|
Benefit obligation January 1
|
$
|
10,632
|
|
|
$
|
8,666
|
|
|
$
|
8,331
|
|
|
$
|
7,389
|
|
|
$
|
2,638
|
|
|
$
|
2,329
|
|
Service cost
|
307
|
|
|
300
|
|
|
251
|
|
|
266
|
|
|
80
|
|
|
78
|
|
||||||
Interest cost
|
434
|
|
|
425
|
|
|
206
|
|
|
269
|
|
|
110
|
|
|
115
|
|
||||||
Actuarial (gains) losses
|
(1,102
|
)
|
|
1,857
|
|
|
(127
|
)
|
|
1,605
|
|
|
(384
|
)
|
|
212
|
|
||||||
Benefits paid
|
(523
|
)
|
|
(535
|
)
|
|
(196
|
)
|
|
(245
|
)
|
|
(99
|
)
|
|
(110
|
)
|
||||||
Effects of exchange rate changes
|
—
|
|
|
—
|
|
|
(647
|
)
|
|
(864
|
)
|
|
(11
|
)
|
|
(6
|
)
|
||||||
Plan amendments
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|
(531
|
)
|
|
—
|
|
||||||
Curtailments
|
(14
|
)
|
|
(70
|
)
|
|
(15
|
)
|
|
(76
|
)
|
|
(3
|
)
|
|
3
|
|
||||||
Termination benefits
|
22
|
|
|
53
|
|
|
1
|
|
|
11
|
|
|
7
|
|
|
22
|
|
||||||
Settlements
|
(35
|
)
|
|
(64
|
)
|
|
(66
|
)
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
2
|
|
|
—
|
|
|
(4
|
)
|
|
11
|
|
|
3
|
|
|
(5
|
)
|
||||||
Benefit obligation December 31
|
$
|
9,723
|
|
|
$
|
10,632
|
|
|
$
|
7,733
|
|
|
$
|
8,331
|
|
|
$
|
1,810
|
|
|
$
|
2,638
|
|
Funded status December 31
|
$
|
(457
|
)
|
|
$
|
(648
|
)
|
|
$
|
(529
|
)
|
|
$
|
(607
|
)
|
|
$
|
103
|
|
|
$
|
(654
|
)
|
Recognized as:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other assets
|
$
|
179
|
|
|
$
|
68
|
|
|
$
|
567
|
|
|
$
|
565
|
|
|
$
|
359
|
|
|
$
|
1
|
|
Accrued and other current liabilities
|
(48
|
)
|
|
(41
|
)
|
|
(7
|
)
|
|
(11
|
)
|
|
(10
|
)
|
|
(11
|
)
|
||||||
Other noncurrent liabilities
|
(588
|
)
|
|
(675
|
)
|
|
(1,089
|
)
|
|
(1,161
|
)
|
|
(246
|
)
|
|
(644
|
)
|
|
U.S.
|
|
International
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Pension plans with a projected benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
1,310
|
|
|
$
|
3,963
|
|
|
$
|
5,093
|
|
|
$
|
5,513
|
|
Fair value of plan assets
|
674
|
|
|
3,247
|
|
|
3,996
|
|
|
4,341
|
|
||||
Pension plans with an accumulated benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
$
|
611
|
|
|
$
|
810
|
|
|
$
|
4,812
|
|
|
$
|
2,749
|
|
Fair value of plan assets
|
—
|
|
|
138
|
|
|
3,964
|
|
|
1,870
|
|
|
Fair Value Measurements Using
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||||||||
|
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||
|
2015
|
|
|
|
2014
|
|
|
||||||||||||||||||||||||
U.S. Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
2
|
|
|
$
|
234
|
|
|
$
|
—
|
|
|
$
|
236
|
|
Investment funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed markets equities
|
566
|
|
|
3,704
|
|
|
—
|
|
|
4,270
|
|
|
540
|
|
|
4,518
|
|
|
—
|
|
|
5,058
|
|
||||||||
Emerging markets equities
|
87
|
|
|
632
|
|
|
—
|
|
|
719
|
|
|
107
|
|
|
718
|
|
|
—
|
|
|
825
|
|
||||||||
Government and agency obligations
|
—
|
|
|
181
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||||||
Fixed income obligations
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
132
|
|
|
—
|
|
|
132
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed markets
|
2,444
|
|
|
—
|
|
|
—
|
|
|
2,444
|
|
|
2,169
|
|
|
—
|
|
|
—
|
|
|
2,169
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government and agency obligations
|
—
|
|
|
391
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
516
|
|
|
—
|
|
|
516
|
|
||||||||
Corporate obligations
|
—
|
|
|
679
|
|
|
—
|
|
|
679
|
|
|
—
|
|
|
722
|
|
|
—
|
|
|
722
|
|
||||||||
Mortgage and asset-backed securities
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
245
|
|
||||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
31
|
|
|
—
|
|
|
32
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
28
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
|
$
|
3,097
|
|
|
$
|
6,146
|
|
|
$
|
23
|
|
|
$
|
9,266
|
|
|
$
|
2,819
|
|
|
$
|
7,137
|
|
|
$
|
28
|
|
|
$
|
9,984
|
|
International Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
63
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
208
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
221
|
|
Investment funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed markets equities
|
184
|
|
|
3,024
|
|
|
—
|
|
|
3,208
|
|
|
217
|
|
|
2,991
|
|
|
—
|
|
|
3,208
|
|
||||||||
Emerging markets equities
|
21
|
|
|
228
|
|
|
—
|
|
|
249
|
|
|
31
|
|
|
256
|
|
|
—
|
|
|
287
|
|
||||||||
Government and agency obligations
|
305
|
|
|
1,269
|
|
|
—
|
|
|
1,574
|
|
|
317
|
|
|
1,410
|
|
|
—
|
|
|
1,727
|
|
||||||||
Corporate obligations
|
173
|
|
|
159
|
|
|
—
|
|
|
332
|
|
|
183
|
|
|
170
|
|
|
—
|
|
|
353
|
|
||||||||
Fixed income obligations
|
8
|
|
|
10
|
|
|
—
|
|
|
18
|
|
|
9
|
|
|
16
|
|
|
—
|
|
|
25
|
|
||||||||
Real estate
(1)
|
—
|
|
|
3
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
8
|
|
|
29
|
|
|
37
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed markets
|
496
|
|
|
—
|
|
|
—
|
|
|
496
|
|
|
509
|
|
|
—
|
|
|
—
|
|
|
509
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government and agency obligations
|
2
|
|
|
465
|
|
|
—
|
|
|
467
|
|
|
28
|
|
|
448
|
|
|
—
|
|
|
476
|
|
||||||||
Corporate obligations
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
|
2
|
|
|
190
|
|
|
1
|
|
|
193
|
|
||||||||
Mortgage and asset-backed securities
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Insurance contracts
(2)
|
—
|
|
|
60
|
|
|
481
|
|
|
541
|
|
|
—
|
|
|
69
|
|
|
521
|
|
|
590
|
|
||||||||
Other
|
—
|
|
|
3
|
|
|
2
|
|
|
5
|
|
|
3
|
|
|
4
|
|
|
1
|
|
|
8
|
|
||||||||
|
$
|
1,252
|
|
|
$
|
5,459
|
|
|
$
|
493
|
|
|
$
|
7,204
|
|
|
$
|
1,507
|
|
|
$
|
5,665
|
|
|
$
|
552
|
|
|
$
|
7,724
|
|
(1)
|
The plans’ Level 3 investments in real estate funds are generally valued by market appraisals of the underlying investments in the funds.
|
(2)
|
The plans’ Level 3 investments in insurance contracts are generally valued using a crediting rate that approximates market returns and invest in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques.
|
|
2015
|
|
2014
|
||||||||||||||||||||||||||||
|
Insurance
Contracts
|
|
Real
Estate
|
|
Other
|
|
Total
|
|
Insurance
Contracts
|
|
Real
Estate
|
|
Other
|
|
Total
|
||||||||||||||||
U.S. Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance January 1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
31
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Relating to assets still held at December 31
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
Relating to assets sold during the year
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||
Purchases
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
Sales
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||||
Balance December 31
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
28
|
|
International Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance January 1
|
$
|
521
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
552
|
|
|
$
|
540
|
|
|
$
|
49
|
|
|
$
|
2
|
|
|
$
|
591
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Relating to assets still held at December 31
|
(23
|
)
|
|
(3
|
)
|
|
—
|
|
|
(26
|
)
|
|
(35
|
)
|
|
(4
|
)
|
|
—
|
|
|
(39
|
)
|
||||||||
Relating to assets sold during the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Purchases
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||||
Sales
|
(31
|
)
|
|
(16
|
)
|
|
—
|
|
|
(47
|
)
|
|
(3
|
)
|
|
(10
|
)
|
|
—
|
|
|
(13
|
)
|
||||||||
Transfers out of Level 3
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
—
|
|
|
(9
|
)
|
||||||||
Balance December 31
|
$
|
481
|
|
|
$
|
10
|
|
|
$
|
2
|
|
|
$
|
493
|
|
|
$
|
521
|
|
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
552
|
|
|
Fair Value Measurements Using
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||||||||
|
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||
|
2015
|
|
|
|
2014
|
|
|
||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
$
|
65
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
82
|
|
|
$
|
60
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Investment funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed markets equities
|
53
|
|
|
540
|
|
|
—
|
|
|
593
|
|
|
51
|
|
|
613
|
|
|
—
|
|
|
664
|
|
||||||||
Emerging markets equities
|
29
|
|
|
82
|
|
|
—
|
|
|
111
|
|
|
36
|
|
|
93
|
|
|
—
|
|
|
129
|
|
||||||||
Government and agency obligations
|
2
|
|
|
16
|
|
|
—
|
|
|
18
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
5
|
|
||||||||
Fixed income obligations
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed markets
|
229
|
|
|
—
|
|
|
—
|
|
|
229
|
|
|
204
|
|
|
—
|
|
|
—
|
|
|
204
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Government and agency obligations
|
—
|
|
|
339
|
|
|
—
|
|
|
339
|
|
|
—
|
|
|
333
|
|
|
—
|
|
|
333
|
|
||||||||
Corporate obligations
|
—
|
|
|
311
|
|
|
—
|
|
|
311
|
|
|
—
|
|
|
336
|
|
|
—
|
|
|
336
|
|
||||||||
Mortgage and asset-backed securities
|
—
|
|
|
218
|
|
|
—
|
|
|
218
|
|
|
—
|
|
|
219
|
|
|
—
|
|
|
219
|
|
||||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||||
|
$
|
378
|
|
|
$
|
1,535
|
|
|
$
|
—
|
|
|
$
|
1,913
|
|
|
$
|
354
|
|
|
$
|
1,630
|
|
|
$
|
—
|
|
|
$
|
1,984
|
|
|
U.S. Pension Benefits
|
|
International Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||||
2016
|
$
|
528
|
|
|
$
|
206
|
|
|
$
|
101
|
|
2017
|
532
|
|
|
188
|
|
|
100
|
|
|||
2018
|
555
|
|
|
198
|
|
|
104
|
|
|||
2019
|
596
|
|
|
201
|
|
|
108
|
|
|||
2020
|
610
|
|
|
211
|
|
|
111
|
|
|||
2021 — 2025
|
3,414
|
|
|
1,179
|
|
|
624
|
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
|||||||||||||||||||||||||||||||
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
Net gain (loss) arising during the period
|
$
|
73
|
|
|
$
|
(2,085
|
)
|
|
$
|
2,676
|
|
|
$
|
(66
|
)
|
|
$
|
(779
|
)
|
|
$
|
513
|
|
|
$
|
209
|
|
|
$
|
(223
|
)
|
|
$
|
499
|
|
Prior service (cost) credit arising during the period
|
(13
|
)
|
|
(59
|
)
|
|
(23
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
226
|
|
|
511
|
|
|
(42
|
)
|
|
26
|
|
|||||||||
|
$
|
60
|
|
|
$
|
(2,144
|
)
|
|
$
|
2,653
|
|
|
$
|
(70
|
)
|
|
$
|
(787
|
)
|
|
$
|
739
|
|
|
$
|
720
|
|
|
$
|
(265
|
)
|
|
$
|
525
|
|
Net loss amortization included in benefit cost
|
$
|
214
|
|
|
$
|
135
|
|
|
$
|
318
|
|
|
$
|
118
|
|
|
$
|
74
|
|
|
$
|
89
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
23
|
|
Prior service (credit) cost amortization included in benefit cost
|
(56
|
)
|
|
(61
|
)
|
|
(67
|
)
|
|
(14
|
)
|
|
(15
|
)
|
|
(4
|
)
|
|
(64
|
)
|
|
(72
|
)
|
|
(73
|
)
|
|||||||||
|
$
|
158
|
|
|
$
|
74
|
|
|
$
|
251
|
|
|
$
|
104
|
|
|
$
|
59
|
|
|
$
|
85
|
|
|
$
|
(59
|
)
|
|
$
|
(71
|
)
|
|
$
|
(50
|
)
|
|
U.S. Pension and Other
Postretirement Benefit Plans
|
|
International Pension Plans
|
||||||||||||||
December 31
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.20
|
%
|
|
4.90
|
%
|
|
4.10
|
%
|
|
2.70
|
%
|
|
3.80
|
%
|
|
3.60
|
%
|
Expected rate of return on plan assets
|
8.50
|
%
|
|
8.50
|
%
|
|
8.50
|
%
|
|
5.70
|
%
|
|
6.00
|
%
|
|
5.80
|
%
|
Salary growth rate
|
4.40
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
2.90
|
%
|
|
3.10
|
%
|
|
3.30
|
%
|
Benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.80
|
%
|
|
4.20
|
%
|
|
5.10
|
%
|
|
2.80
|
%
|
|
2.70
|
%
|
|
3.80
|
%
|
Salary growth rate
|
4.30
|
%
|
|
4.40
|
%
|
|
4.50
|
%
|
|
2.90
|
%
|
|
2.90
|
%
|
|
3.10
|
%
|
|
One Percentage Point
|
||||||
|
Increase
|
|
Decrease
|
||||
Effect on total service and interest cost components
|
$
|
34
|
|
|
$
|
(27
|
)
|
Effect on benefit obligation
|
75
|
|
|
(64
|
)
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Interest income
|
$
|
(289
|
)
|
|
$
|
(266
|
)
|
|
$
|
(264
|
)
|
Interest expense
|
672
|
|
|
732
|
|
|
801
|
|
|||
Exchange losses
|
1,277
|
|
|
180
|
|
|
290
|
|
|||
Equity income from affiliates
|
(205
|
)
|
|
(257
|
)
|
|
(404
|
)
|
|||
Other, net
|
72
|
|
|
(12,002
|
)
|
|
(12
|
)
|
|||
|
$
|
1,527
|
|
|
$
|
(11,613
|
)
|
|
$
|
411
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Amount
|
|
Tax Rate
|
|
Amount
|
|
Tax Rate
|
|
Amount
|
|
Tax Rate
|
|||||||||
U.S. statutory rate applied to income before taxes
|
$
|
1,890
|
|
|
35.0
|
%
|
|
$
|
6,049
|
|
|
35.0
|
%
|
|
$
|
1,941
|
|
|
35.0
|
%
|
Differential arising from:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign earnings
|
(2,105
|
)
|
|
(39.0
|
)
|
|
(1,367
|
)
|
|
(7.9
|
)
|
|
(1,296
|
)
|
|
(23.4
|
)
|
|||
Tax settlements
|
(417
|
)
|
|
(7.7
|
)
|
|
(89
|
)
|
|
(0.5
|
)
|
|
(497
|
)
|
|
(9.0
|
)
|
|||
AstraZeneca option exercise
|
—
|
|
|
—
|
|
|
(774
|
)
|
|
(4.5
|
)
|
|
—
|
|
|
—
|
|
|||
Sale of Sirna Therapeutics, Inc.
|
—
|
|
|
—
|
|
|
(357
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|||
The American Taxpayer Relief Act of 2012
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(269
|
)
|
|
(4.8
|
)
|
|||
Impact of purchase accounting adjustments, including amortization
|
797
|
|
|
14.8
|
|
|
1,013
|
|
|
5.9
|
|
|
990
|
|
|
17.8
|
|
|||
Foreign currency devaluation related to Venezuela
|
321
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
0.5
|
|
|||
Unremitted foreign earnings
|
260
|
|
|
4.8
|
|
|
(209
|
)
|
|
(1.2
|
)
|
|
(81
|
)
|
|
(1.5
|
)
|
|||
Restructuring
|
167
|
|
|
3.1
|
|
|
289
|
|
|
1.7
|
|
|
224
|
|
|
4.0
|
|
|||
State taxes
|
159
|
|
|
2.9
|
|
|
7
|
|
|
—
|
|
|
44
|
|
|
0.8
|
|
|||
U.S. health care reform legislation
|
66
|
|
|
1.2
|
|
|
134
|
|
|
0.8
|
|
|
65
|
|
|
1.2
|
|
|||
Divestiture of Merck Consumer Care
|
—
|
|
|
—
|
|
|
440
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|||
Other
(1)
|
(196
|
)
|
|
(3.6
|
)
|
|
213
|
|
|
1.2
|
|
|
(120
|
)
|
|
(2.1
|
)
|
|||
|
$
|
942
|
|
|
17.4
|
%
|
|
$
|
5,349
|
|
|
30.9
|
%
|
|
$
|
1,028
|
|
|
18.5
|
%
|
(1)
|
Other includes the tax effect of contingency reserves, research credits, tax rate changes and miscellaneous items.
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Domestic
|
$
|
2,247
|
|
|
$
|
15,730
|
|
|
$
|
3,513
|
|
Foreign
|
3,154
|
|
|
1,553
|
|
|
2,032
|
|
|||
|
$
|
5,401
|
|
|
$
|
17,283
|
|
|
$
|
5,545
|
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Current provision
|
|
|
|
|
|
||||||
Federal
|
$
|
732
|
|
|
$
|
7,136
|
|
|
$
|
568
|
|
Foreign
|
844
|
|
|
438
|
|
|
923
|
|
|||
State
|
130
|
|
|
375
|
|
|
(133
|
)
|
|||
|
1,706
|
|
|
7,949
|
|
|
1,358
|
|
|||
Deferred provision
|
|
|
|
|
|
||||||
Federal
|
(552
|
)
|
|
(2,162
|
)
|
|
30
|
|
|||
Foreign
|
(163
|
)
|
|
(201
|
)
|
|
(398
|
)
|
|||
State
|
(49
|
)
|
|
(237
|
)
|
|
38
|
|
|||
|
(764
|
)
|
|
(2,600
|
)
|
|
(330
|
)
|
|||
|
$
|
942
|
|
|
$
|
5,349
|
|
|
$
|
1,028
|
|
|
2015
|
|
2014
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Intangibles
|
$
|
—
|
|
|
$
|
4,962
|
|
|
$
|
—
|
|
|
$
|
3,358
|
|
Inventory related
|
49
|
|
|
752
|
|
|
56
|
|
|
699
|
|
||||
Accelerated depreciation
|
43
|
|
|
910
|
|
|
58
|
|
|
892
|
|
||||
Unremitted foreign earnings
|
—
|
|
|
2,124
|
|
|
—
|
|
|
2,016
|
|
||||
Pensions and other postretirement benefits
|
435
|
|
|
131
|
|
|
778
|
|
|
156
|
|
||||
Compensation related
|
535
|
|
|
—
|
|
|
578
|
|
|
—
|
|
||||
Unrecognized tax benefits
|
412
|
|
|
—
|
|
|
401
|
|
|
—
|
|
||||
Net operating losses and other tax credit carryforwards
|
565
|
|
|
—
|
|
|
379
|
|
|
—
|
|
||||
Other
|
1,217
|
|
|
—
|
|
|
1,535
|
|
|
65
|
|
||||
Subtotal
|
3,256
|
|
|
8,879
|
|
|
3,785
|
|
|
7,186
|
|
||||
Valuation allowance
|
(304
|
)
|
|
|
|
(265
|
)
|
|
|
||||||
Total deferred taxes
|
$
|
2,952
|
|
|
$
|
8,879
|
|
|
$
|
3,520
|
|
|
$
|
7,186
|
|
Net deferred income taxes
|
|
|
$
|
5,927
|
|
|
|
|
$
|
3,666
|
|
||||
Recognized as:
|
|
|
|
|
|
|
|
||||||||
Other assets
|
$
|
608
|
|
|
|
|
$
|
801
|
|
|
|
||||
Deferred income taxes
|
|
|
$
|
6,535
|
|
|
|
|
$
|
4,467
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance January 1
|
$
|
3,534
|
|
|
$
|
3,503
|
|
|
$
|
4,425
|
|
Additions related to current year positions
|
198
|
|
|
389
|
|
|
320
|
|
|||
Additions related to prior year positions
|
53
|
|
|
23
|
|
|
177
|
|
|||
Reductions for tax positions of prior years
(1)
|
(59
|
)
|
|
(156
|
)
|
|
(747
|
)
|
|||
Settlements
(1)
|
(184
|
)
|
|
(161
|
)
|
|
(603
|
)
|
|||
Lapse of statute of limitations
|
(94
|
)
|
|
(64
|
)
|
|
(69
|
)
|
|||
Balance December 31
|
$
|
3,448
|
|
|
$
|
3,534
|
|
|
$
|
3,503
|
|
(1)
|
Amounts reflect the settlements with the IRS as discussed below.
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Net income attributable to Merck & Co., Inc.
|
$
|
4,442
|
|
|
$
|
11,920
|
|
|
$
|
4,404
|
|
Average common shares outstanding
|
2,816
|
|
|
2,894
|
|
|
2,963
|
|
|||
Common shares issuable
(1)
|
25
|
|
|
34
|
|
|
33
|
|
|||
Average common shares outstanding assuming dilution
|
2,841
|
|
|
2,928
|
|
|
2,996
|
|
|||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
1.58
|
|
|
$
|
4.12
|
|
|
$
|
1.49
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
1.56
|
|
|
$
|
4.07
|
|
|
$
|
1.47
|
|
(1)
|
Issuable primarily under share-based compensation plans.
|
|
Derivatives
|
|
Investments
|
|
Employee
Benefit
Plans
|
|
Cumulative
Translation
Adjustment
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
||||||||||
Balance January 1, 2013, net of taxes
|
$
|
(97
|
)
|
|
$
|
73
|
|
|
$
|
(3,667
|
)
|
|
$
|
(991
|
)
|
|
$
|
(4,682
|
)
|
Other comprehensive income (loss) before reclassification adjustments, pretax
|
335
|
|
|
33
|
|
|
3,917
|
|
|
(383
|
)
|
|
3,902
|
|
|||||
Tax
|
(132
|
)
|
|
(23
|
)
|
|
(1,365
|
)
|
|
(100
|
)
|
|
(1,620
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, net of taxes
|
203
|
|
|
10
|
|
|
2,552
|
|
|
(483
|
)
|
|
2,282
|
|
|||||
Reclassification adjustments, pretax
|
42
|
|
(1)
|
(39
|
)
|
(2)
|
286
|
|
(3)
|
—
|
|
|
289
|
|
|||||
Tax
|
(16
|
)
|
|
10
|
|
|
(80
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Reclassification adjustments, net of taxes
|
26
|
|
|
(29
|
)
|
|
206
|
|
|
—
|
|
|
203
|
|
|||||
Other comprehensive income (loss), net of taxes
|
229
|
|
|
(19
|
)
|
|
2,758
|
|
|
(483
|
)
|
|
2,485
|
|
|||||
Balance December 31, 2013, net of taxes
|
132
|
|
|
54
|
|
|
(909
|
)
|
|
(1,474
|
)
|
|
(2,197
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, pretax
|
778
|
|
|
48
|
|
|
(3,196
|
)
|
|
(412
|
)
|
|
(2,782
|
)
|
|||||
Tax
|
(285
|
)
|
|
(17
|
)
|
|
1,067
|
|
|
(92
|
)
|
|
673
|
|
|||||
Other comprehensive income (loss) before reclassification adjustments, net of taxes
|
493
|
|
|
31
|
|
|
(2,129
|
)
|
|
(504
|
)
|
|
(2,109
|
)
|
|||||
Reclassification adjustments, pretax
|
(146
|
)
|
(1)
|
43
|
|
(2)
|
62
|
|
(3)
|
—
|
|
|
(41
|
)
|
|||||
Tax
|
51
|
|
|
(17
|
)
|
|
(10
|
)
|
|
—
|
|
|
24
|
|
|||||
Reclassification adjustments, net of taxes
|
(95
|
)
|
|
26
|
|
|
52
|
|
|
—
|
|
|
(17
|
)
|
|||||
Other comprehensive income (loss), net of taxes
|
398
|
|
|
57
|
|
|
(2,077
|
)
|
|
(504
|
)
|
|
(2,126
|
)
|
|||||
Balance December 31, 2014, net of taxes
|
530
|
|
|
111
|
|
|
(2,986
|
)
|
(4)
|
(1,978
|
)
|
|
(4,323
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, pretax
|
526
|
|
|
(9
|
)
|
|
710
|
|
|
(158
|
)
|
|
1,069
|
|
|||||
Tax
|
(177
|
)
|
|
(13
|
)
|
|
(272
|
)
|
|
(28
|
)
|
|
(490
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, net of taxes
|
349
|
|
|
(22
|
)
|
|
438
|
|
|
(186
|
)
|
|
579
|
|
|||||
Reclassification adjustments, pretax
|
(731
|
)
|
(1)
|
(73
|
)
|
(2)
|
203
|
|
(3)
|
(22
|
)
|
|
(623
|
)
|
|||||
Tax
|
256
|
|
|
25
|
|
|
(62
|
)
|
|
—
|
|
|
219
|
|
|||||
Reclassification adjustments, net of taxes
|
(475
|
)
|
|
(48
|
)
|
|
141
|
|
|
(22
|
)
|
|
(404
|
)
|
|||||
Other comprehensive income (loss), net of taxes
|
(126
|
)
|
|
(70
|
)
|
|
579
|
|
|
(208
|
)
|
|
175
|
|
|||||
Balance December 31, 2015, net of taxes
|
$
|
404
|
|
|
$
|
41
|
|
|
$
|
(2,407
|
)
|
(4)
|
$
|
(2,186
|
)
|
|
$
|
(4,148
|
)
|
(1)
|
Relates to foreign currency cash flow hedges that were reclassified from
AOCI
to
Sales
.
|
(2)
|
Represents net realized (gains) losses on the sales of available-for-sale investments that were reclassified from
AOCI
to
Other (income) expense, net
.
|
(3)
|
Includes net amortization of prior service cost and actuarial gains and losses included in net periodic benefit cost (see Note 13).
|
(4)
|
Includes pension plan net loss of $
3.3 billion
and
$3.5 billion
at December 31,
2015
and
2014
, respectively, and other postretirement benefit plan net loss of
$86 million
and
$228 million
at December 31,
2015
and in
2014
, respectively, as well as pension plan prior service credit of
$414 million
and
$473 million
at December 31,
2015
and
2014
, respectively, and other postretirement benefit plan prior service credit of
$547 million
and
$257 million
at December 31,
2015
and
2014
.
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Primary Care and Women’s Health
|
|
|
|
|
|
||||||
Cardiovascular
|
|
|
|
|
|
||||||
Zetia
|
$
|
2,526
|
|
|
$
|
2,650
|
|
|
$
|
2,658
|
|
Vytorin
|
1,251
|
|
|
1,516
|
|
|
1,643
|
|
|||
Diabetes
|
|
|
|
|
|
||||||
Januvia
|
3,863
|
|
|
3,931
|
|
|
4,004
|
|
|||
Janumet
|
2,151
|
|
|
2,071
|
|
|
1,829
|
|
|||
General Medicine and Women’s Health
|
|
|
|
|
|
||||||
NuvaRing
|
732
|
|
|
723
|
|
|
686
|
|
|||
Implanon/Nexplanon
|
588
|
|
|
502
|
|
|
403
|
|
|||
Dulera
|
536
|
|
|
460
|
|
|
324
|
|
|||
Follistim AQ
|
383
|
|
|
412
|
|
|
481
|
|
|||
Hospital and Specialty
|
|
|
|
|
|
||||||
Hepatitis
|
|
|
|
|
|
||||||
PegIntron
|
182
|
|
|
381
|
|
|
496
|
|
|||
HIV
|
|
|
|
|
|
||||||
Isentress
|
1,511
|
|
|
1,673
|
|
|
1,643
|
|
|||
Hospital Acute Care
|
|
|
|
|
|
||||||
Cubicin
(1)
|
1,127
|
|
|
25
|
|
|
24
|
|
|||
Cancidas
|
573
|
|
|
681
|
|
|
660
|
|
|||
Invanz
|
569
|
|
|
529
|
|
|
488
|
|
|||
Noxafil
|
487
|
|
|
402
|
|
|
309
|
|
|||
Bridion
|
353
|
|
|
340
|
|
|
288
|
|
|||
Primaxin
|
313
|
|
|
329
|
|
|
335
|
|
|||
Immunology
|
|
|
|
|
|
||||||
Remicade
|
1,794
|
|
|
2,372
|
|
|
2,271
|
|
|||
Simponi
|
690
|
|
|
689
|
|
|
500
|
|
|||
Oncology
|
|
|
|
|
|
||||||
Keytruda
|
566
|
|
|
55
|
|
|
—
|
|
|||
Emend
|
535
|
|
|
553
|
|
|
507
|
|
|||
Temodar
|
312
|
|
|
350
|
|
|
708
|
|
|||
Diversified Brands
|
|
|
|
|
|
||||||
Respiratory
|
|
|
|
|
|
||||||
Singulair
|
931
|
|
|
1,092
|
|
|
1,196
|
|
|||
Nasonex
|
858
|
|
|
1,099
|
|
|
1,335
|
|
|||
Clarinex
|
187
|
|
|
232
|
|
|
235
|
|
|||
Other
|
|
|
|
|
|
||||||
Cozaar/Hyzaar
|
667
|
|
|
806
|
|
|
1,006
|
|
|||
Arcoxia
|
471
|
|
|
519
|
|
|
484
|
|
|||
Fosamax
|
359
|
|
|
470
|
|
|
560
|
|
|||
Zocor
|
217
|
|
|
258
|
|
|
301
|
|
|||
Propecia
|
183
|
|
|
264
|
|
|
283
|
|
|||
Vaccines
(2)
|
|
|
|
|
|
||||||
Gardasil/Gardasil
9
|
1,908
|
|
|
1,738
|
|
|
1,831
|
|
|||
ProQuad/M-M-R II/Varivax
|
1,505
|
|
|
1,394
|
|
|
1,306
|
|
|||
Zostavax
|
749
|
|
|
765
|
|
|
758
|
|
|||
RotaTeq
|
610
|
|
|
659
|
|
|
636
|
|
|||
Pneumovax 23
|
542
|
|
|
746
|
|
|
653
|
|
|||
Other pharmaceutical
(3)
|
4,553
|
|
|
5,356
|
|
|
6,596
|
|
|||
Total Pharmaceutical segment sales
|
34,782
|
|
|
36,042
|
|
|
37,437
|
|
|||
Other segment sales
(4)
|
3,659
|
|
|
5,758
|
|
|
6,397
|
|
|||
Total segment sales
|
38,441
|
|
|
41,800
|
|
|
43,834
|
|
|||
Other
(5)
|
1,057
|
|
|
437
|
|
|
199
|
|
|||
|
$
|
39,498
|
|
|
$
|
42,237
|
|
|
$
|
44,033
|
|
(1)
|
Sales of
Cubicin
in 2015 represent sales subsequent to the Cubist acquisition date. Sales of
Cubicin
in 2014 and 2013 reflect sales in Japan pursuant to a previously existing licensing agreement.
|
(2)
|
These amounts do not reflect sales of vaccines sold in most major European markets through the Company’s joint venture, Sanofi Pasteur MSD, the results of which are reflected in equity income from affiliates which is included in
Other (income) expense, net
. These amounts do, however, reflect supply sales to Sanofi Pasteur MSD.
|
(3)
|
Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
|
(4)
|
Represents the non-reportable segments of Animal Health, Alliances and Healthcare Services, as well as Consumer Care until its divestiture on October 1, 2014 (see Note 4). The Alliances segment includes revenue from the Company’s relationship with AZLP until termination on June 30, 2014 (see Note 8).
|
(5)
|
Other revenues are primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales. Other revenues in 2014 also include
$232 million
received by Merck in connection with the sale of the U.S. marketing rights to
Saphris
(see Note 4). Other revenues in 2013 reflect
$50 million
of revenue for the out-license of a pipeline compound.
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
17,519
|
|
|
$
|
17,071
|
|
|
$
|
18,246
|
|
Europe, Middle East and Africa
|
10,677
|
|
|
13,174
|
|
|
13,140
|
|
|||
Asia Pacific
|
3,820
|
|
|
3,951
|
|
|
3,845
|
|
|||
Japan
|
2,673
|
|
|
3,471
|
|
|
4,044
|
|
|||
Latin America
|
2,823
|
|
|
3,151
|
|
|
3,203
|
|
|||
Other
|
1,986
|
|
|
1,419
|
|
|
1,555
|
|
|||
|
$
|
39,498
|
|
|
$
|
42,237
|
|
|
$
|
44,033
|
|
Years Ended December 31
|
2015
|
|
2014
|
|
2013
|
||||||
Segment profits:
|
|
|
|
|
|
||||||
Pharmaceutical segment
|
$
|
21,658
|
|
|
$
|
22,164
|
|
|
$
|
22,983
|
|
Other segments
|
1,659
|
|
|
2,458
|
|
|
3,049
|
|
|||
Total segment profits
|
23,317
|
|
|
24,622
|
|
|
26,032
|
|
|||
Other profits
|
810
|
|
|
627
|
|
|
63
|
|
|||
Unallocated:
|
|
|
|
|
|
||||||
Interest income
|
289
|
|
|
266
|
|
|
264
|
|
|||
Interest expense
|
(672
|
)
|
|
(732
|
)
|
|
(801
|
)
|
|||
Equity income from affiliates
|
135
|
|
|
59
|
|
|
(159
|
)
|
|||
Depreciation and amortization
|
(1,573
|
)
|
|
(2,452
|
)
|
|
(2,250
|
)
|
|||
Research and development
|
(5,871
|
)
|
|
(5,823
|
)
|
|
(6,381
|
)
|
|||
Amortization of purchase accounting adjustments
|
(4,856
|
)
|
|
(4,182
|
)
|
|
(4,690
|
)
|
|||
Restructuring costs
|
(619
|
)
|
|
(1,013
|
)
|
|
(1,709
|
)
|
|||
Gain on sale of certain migraine clinical development programs
|
250
|
|
|
—
|
|
|
—
|
|
|||
Gain on the divestiture of certain ophthalmic products
|
147
|
|
|
480
|
|
|
—
|
|
|||
Foreign currency devaluation related to Venezuela
|
(876
|
)
|
|
—
|
|
|
(140
|
)
|
|||
Net charge related to the settlement of
Vioxx
shareholder class action litigation
|
(680
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on divestiture of Merck Consumer Care
|
—
|
|
|
11,209
|
|
|
—
|
|
|||
Gain on AstraZeneca option exercise
|
—
|
|
|
741
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
(628
|
)
|
|
—
|
|
|||
Other unallocated, net
|
(4,400
|
)
|
|
(5,891
|
)
|
|
(4,684
|
)
|
|||
|
$
|
5,401
|
|
|
$
|
17,283
|
|
|
$
|
5,545
|
|
|
Pharmaceutical
|
|
All Other
|
|
Total
|
||||||
Year Ended December 31, 2015
|
|
|
|
|
|
||||||
Included in segment profits:
|
|
|
|
|
|
||||||
Equity income from affiliates
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
70
|
|
Depreciation and amortization
|
(82
|
)
|
|
(18
|
)
|
|
(100
|
)
|
|||
Year Ended December 31, 2014
|
|
|
|
|
|
||||||
Included in segment profits:
|
|
|
|
|
|
||||||
Equity income from affiliates
|
$
|
90
|
|
|
$
|
108
|
|
|
$
|
198
|
|
Depreciation and amortization
|
(39
|
)
|
|
(18
|
)
|
|
(57
|
)
|
|||
Year Ended December 31, 2013
|
|
|
|
|
|
||||||
Included in segment profits:
|
|
|
|
|
|
||||||
Equity income from affiliates
|
$
|
88
|
|
|
$
|
475
|
|
|
$
|
563
|
|
Depreciation and amortization
|
(27
|
)
|
|
(22
|
)
|
|
(49
|
)
|
December 31
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
8,467
|
|
|
$
|
8,727
|
|
|
$
|
10,076
|
|
Europe, Middle East and Africa
|
2,844
|
|
|
3,120
|
|
|
3,346
|
|
|||
Asia Pacific
|
842
|
|
|
897
|
|
|
1,001
|
|
|||
Latin America
|
182
|
|
|
207
|
|
|
242
|
|
|||
Japan
|
164
|
|
|
172
|
|
|
211
|
|
|||
Other
|
8
|
|
|
13
|
|
|
97
|
|
|||
|
$
|
12,507
|
|
|
$
|
13,136
|
|
|
$
|
14,973
|
|
(b)
|
Supplementary Data
|
($ in millions except per share amounts)
|
4th Q
(1)
|
|
3rd Q
(2)
|
|
2nd Q
(3)
|
|
1st Q
(4)
|
||||||||
2015
(5)
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
10,215
|
|
|
$
|
10,073
|
|
|
$
|
9,785
|
|
|
$
|
9,425
|
|
Materials and production
|
3,850
|
|
|
3,761
|
|
|
3,754
|
|
|
3,569
|
|
||||
Marketing and administrative
|
2,615
|
|
|
2,472
|
|
|
2,624
|
|
|
2,601
|
|
||||
Research and development
|
1,797
|
|
|
1,500
|
|
|
1,670
|
|
|
1,737
|
|
||||
Restructuring costs
|
233
|
|
|
113
|
|
|
191
|
|
|
82
|
|
||||
Other (income) expense, net
|
905
|
|
|
(170
|
)
|
|
739
|
|
|
55
|
|
||||
Income before taxes
|
815
|
|
|
2,397
|
|
|
807
|
|
|
1,381
|
|
||||
Net income attributable to Merck & Co., Inc.
|
976
|
|
|
1,826
|
|
|
687
|
|
|
953
|
|
||||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
0.35
|
|
|
$
|
0.65
|
|
|
$
|
0.24
|
|
|
$
|
0.34
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
0.35
|
|
|
$
|
0.64
|
|
|
$
|
0.24
|
|
|
$
|
0.33
|
|
2014
(5)
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
10,482
|
|
|
$
|
10,557
|
|
|
$
|
10,934
|
|
|
$
|
10,264
|
|
Materials and production
|
3,749
|
|
|
4,223
|
|
|
4,893
|
|
|
3,903
|
|
||||
Marketing and administrative
|
2,924
|
|
|
2,975
|
|
|
2,973
|
|
|
2,734
|
|
||||
Research and development
|
2,283
|
|
|
1,659
|
|
|
1,664
|
|
|
1,574
|
|
||||
Restructuring costs
|
349
|
|
|
376
|
|
|
163
|
|
|
125
|
|
||||
Other (income) expense, net
|
(10,634
|
)
|
|
(166
|
)
|
|
(650
|
)
|
|
(163
|
)
|
||||
Income before taxes
|
11,811
|
|
|
1,490
|
|
|
1,891
|
|
|
2,091
|
|
||||
Net income attributable to Merck & Co., Inc.
|
7,316
|
|
|
895
|
|
|
2,004
|
|
|
1,705
|
|
||||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
2.57
|
|
|
$
|
0.31
|
|
|
$
|
0.69
|
|
|
$
|
0.58
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
2.54
|
|
|
$
|
0.31
|
|
|
$
|
0.68
|
|
|
$
|
0.57
|
|
(1)
|
Amounts for 2015 reflect a net charge related to the settlement of
Vioxx
shareholder class action litigation (see Note 10), foreign exchange losses related to Venezuela (see Note 14) and a gain on the sale of the Company’s remaining ophthalmics business in international markets (see Note 4). Amounts for 2014 reflect the divestiture of Merck’s Consumer Care business on October 1, 2014 (see Note 4), including an $11.2 billion gain on the sale. Amounts for 2014 also include a loss on extinguishment of debt (see Note 9).
|
(2)
|
Amounts for 2015 include a gain on the sale of certain migraine clinical development programs (see Note 4). Amounts for 2014 include gains on sales of businesses (see Note 4) and an additional year of expense for the health care reform fee.
|
(5)
|
Amounts for 2015 and 2014 reflect acquisition and divestiture-related costs (see Note 7) and the impact of restructuring actions (see Note 3).
|
Item 9A.
|
Controls and Procedures.
|
|
|
|
|
|
|
|
|
Kenneth C. Frazier
|
|
Robert M. Davis
|
Chairman, President
and Chief Executive Officer
|
|
Executive Vice President
and Chief Financial Officer
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Plan Category
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
(a)
|
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)
|
|
Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding
securities
reflected in column (a))
(c)
|
||||
Equity compensation plans approved by security holders
(1)
|
|
64,668,238
(2)
|
|
|
$
|
41.64
|
|
|
133,513,514
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
64,668,238
|
|
|
$
|
41.64
|
|
|
133,513,514
|
|
(1)
|
Includes options to purchase shares of Company Common Stock and other rights under the following shareholder-approved plans: the Merck Sharp & Dohme 2004, 2007 and 2010 Incentive Stock Plans, the Merck & Co., Inc. 2006 and 2010 Non-Employee Directors Stock Option Plans, and the Merck & Co., Inc. Schering-Plough 2002 and 2006 Stock Incentive Plans.
|
(2)
|
Excludes approximately 13,399,881 shares of restricted stock units and 1,883,597 performance share units (assuming maximum payouts) under the Merck Sharp & Dohme 2004, 2007 and 2010 Incentive Stock Plans. Also excludes 279,862 shares of phantom stock deferred under the MSD Employee Deferral Program and 528,142 shares of phantom stock deferred under the Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
Exhibit
Number
|
|
|
|
Description
|
3.1
|
|
—
|
|
Restated Certificate of Incorporation of Merck & Co., Inc. (November 3, 2009) — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
3.2
|
|
—
|
|
By-Laws of Merck & Co., Inc. (effective July 22, 2015) — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K filed July 28, 2015 (No. 1-6571)
|
4.1
|
|
—
|
|
Indenture, dated as of April 1, 1991, between Merck Sharp & Dohme Corp. (f/k/a Schering Corporation) and U.S. Bank Trust National Association (as successor to Morgan Guaranty Trust Company of New York), as Trustee (the 1991 Indenture) — Incorporated by reference to Exhibit 4 to MSD’s Registration Statement on Form S-3 (No. 33-39349)
|
4.2
|
|
—
|
|
First Supplemental Indenture to the 1991 Indenture, dated as of October 1, 1997 — Incorporated by reference to Exhibit 4(b) to MSD’s Registration Statement on Form S-3 (No. 333-36383)
|
4.3
|
|
—
|
|
Second Supplemental Indenture to the 1991 Indenture, dated November 3, 2009 — Incorporated by reference to Exhibit 4.3 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No.1-6571)
|
4.4
|
|
—
|
|
Third Supplemental Indenture to the 1991 Indenture, dated May 1, 2012 —Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the quarter year ended March 31, 2012 (No. 1-6571)
|
4.5
|
|
—
|
|
Indenture, dated November 26, 2003, between Merck & Co., Inc. (f/k/a Schering-Plough Corporation) and The Bank of New York as Trustee (the 2003 Indenture) — Incorporated by reference to Exhibit 4.1 to Schering-Plough’s Current Report on Form 8‑K filed November 28, 2003 (No. 1-6571)
|
4.6
|
|
—
|
|
First Supplemental Indenture to the 2003 Indenture (including Form of Note), dated November 26, 2003 — Incorporated by reference to Exhibit 4.2 to Schering-Plough’s Current Report on Form 8‑K filed November 28, 2003 (No. 1-6571)
|
4.7
|
|
—
|
|
Second Supplemental Indenture to the 2003 Indenture (including Form of Note), dated November 26, 2003 —Incorporated by reference to Exhibit 4.3 to Schering-Plough’s Current Report on Form 8‑K filed November 28, 2003 (No. 1-6571)
|
4.8
|
|
—
|
|
Third Supplemental Indenture to the 2003 Indenture (including Form of Note), dated September 17, 2007 — Incorporated by reference to Exhibit 4.1 to Schering-Plough’s Current Report on Form 8‑K filed September 17, 2007 (No. 1-6571)
|
4.9
|
|
—
|
|
Fourth Supplemental Indenture to the 2003 Indenture (including Form of Note), dated October 1, 2007 — Incorporated by reference to Exhibit 4.1 to Schering-Plough’s Current Report on Form 8‑K filed October 2, 2007 (No.1-6571)
|
4.10
|
|
—
|
|
Fifth Supplemental Indenture to the 2003 Indenture, dated November 3, 2009 — Incorporated by reference to Exhibit 4.4 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
4.11
|
|
—
|
|
Indenture, dated as of January 6, 2010, between Merck & Co., Inc. and U.S. Bank Trust National Association, as Trustee — Incorporated by reference to Exhibit 4.1 to Merck & Co., Inc.’s Current Report on Form 8-K filed December 10, 2010 (No. 1-6571)
|
4.12
|
|
—
|
|
Long-term debt instruments under which the total amount of securities authorized does not exceed 10% of Merck & Co., Inc.’s total consolidated assets are not filed as exhibits to this report. Merck & Co., Inc. will furnish a copy of these agreements to the Securities and Exchange Commission on request.
|
*10.1
|
|
—
|
|
Merck & Co., Inc. Executive Incentive Plan (as amended and restated effective June 1, 2015) — Incorporated by reference to Merck & Co., Inc.’s Schedule 14A filed April 13, 2015 (No. 1-6571)
|
*10.2
|
|
—
|
|
Merck & Co., Inc. Deferral Program Including the Base Salary Deferral Plan (Amended and Restated effective January 1, 2013) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2012 (No. 1-6571)
|
*10.3
|
|
—
|
|
Merck Sharp & Dohme Corp. 2004 Incentive Stock Plan (amended and restated as of November 3, 2009) — Incorporated by reference to Exhibit 10.8 to Merck & Co., Inc.’s Current Report on Form 8‑K filed November 4, 2009 (No. 1-6571)
|
Exhibit
Number
|
|
|
|
Description
|
*10.4
|
|
—
|
|
Merck Sharp & Dohme Corp. 2007 Incentive Stock Plan (effective as amended and restated as of November 3, 2009) — Incorporated by reference to Exhibit 10.7 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
*10.5
|
|
—
|
|
Amendment One to the Merck Sharp & Dohme Corp. 2007 Incentive Stock Plan (effective February 15, 2010) — Incorporated by reference to Exhibit 10.2 to Merck & Co., Inc.’s Current Report on Form 8-K filed February 18, 2010 (No. 1-6571)
|
*10.6
|
|
—
|
|
Merck & Co., Inc. 2010 Incentive Stock Plan (as amended and restated June 1, 2015) — Incorporated by reference to Merck & Co., Inc.’s Schedule 14A filed April 13, 2015 (No. 1-6571)
|
*10.7
|
|
—
|
|
Form of stock option terms for a non-qualified stock option under the Merck Sharp & Dohme Corp. 2007 Incentive Stock Plan and the Schering-Plough 2006 Stock Incentive Plan — Incorporated by reference to Exhibit 10.3 to Merck & Co., Inc.’s Current Report on Form 8-K filed February 15, 2010 (No. 1-6571)
|
*10.8
|
|
—
|
|
Form of stock option terms for 2011 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10‑Q Quarterly Report for the period ended March 31, 2011 (No. 1-6571)
|
*10.9
|
|
—
|
|
Form of stock option terms for 2012 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10‑K Annual Report for the fiscal year ended December 31, 2011 (No. 1-6571)
|
*10.10
|
|
—
|
|
Form of restricted stock unit terms for 2012 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2011 (No. 1-6571)
|
*10.11
|
|
—
|
|
Form of performance share unit terms for 2012 grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the period ended March 31, 2012 (No. 1-6571)
|
*10.12
|
|
—
|
|
Form of stock option terms for 2013 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2012 (No. 1-6571)
|
*10.13
|
|
—
|
|
Form of restricted stock unit terms for 2013 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2012 (No. 1-6571)
|
*10.14
|
|
—
|
|
Form of performance share unit terms for 2013 grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.15
|
|
—
|
|
Form of stock option terms for 2014 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.16
|
|
—
|
|
Form of restricted stock unit terms for 2014 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.17
|
|
—
|
|
Form of performance share unit terms for 2014 grants under the Merck & Co., Inc. 2010 Stock Incentive Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.18
|
|
—
|
|
Form of stock option terms for 2015 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan
|
*10.19
|
|
—
|
|
Form of restricted stock unit terms for 2015 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan
|
*10.20
|
|
—
|
|
Form of performance share unit terms for 2015 grants under the Merck & Co., Inc. 2010 Stock Incentive Plan
|
Exhibit
Number
|
|
|
|
Description
|
*10.21
|
|
—
|
|
Merck & Co., Inc. Change in Control Separation Benefits Plan (Effective as Amended and Restated, as of January 1, 2013) — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8‑K dated November 29, 2012 (No. 1-6571)
|
*10.22
|
|
—
|
|
Merck & Co., Inc. U.S. Separation Benefits Plan (effective as of January 1, 2013) (amended and restated as of October 1, 2013) — Incorporated by reference to Merck & Co., Inc.’s Form 10‑Q Quarterly Report for the period ended September 30, 2013 (No. 1-6571)
|
*10.23
|
|
—
|
|
Merck & Co., Inc. U.S. Separation Benefits Plan (amended and restated effective as of November 15, 2014) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.24
|
|
—
|
|
Merck & Co., Inc. 2006 Non-Employee Directors Stock Option Plan (amended and restated as of November 3, 2009) — Incorporated by reference to Exhibit 10.5 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
*10.25
|
|
—
|
|
Merck & Co., Inc. 2010 Non-Employee Directors Stock Option Plan (amended and restated as of December 1, 2010) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2010 (No. 1-6571)
|
*10.26
|
|
—
|
|
Retirement Plan for the Directors of Merck & Co., Inc. (amended and restated June 21, 1996) —Incorporated by reference to MSD’s Form 10-Q Quarterly Report for the period ended June 30, 1996 (No. 1-3305)
|
*10.27
|
|
—
|
|
Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation (effective as amended and restated as of December 1, 2010) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2010 (No. 1-6571)
|
*10.28
|
|
—
|
|
Offer Letter between Merck & Co., Inc. and Robert Davis, dated March 17, 2014 — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K dated March 27, 2014 (No. 1-6571)
|
*10.29
|
|
—
|
|
Agreement Letter between Merck & Co., Inc. and Bruce N. Kuhlik, dated July 21, 2015 — Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the period ended September 30, 2015 (No. 1-6571)
|
*10.30
|
|
—
|
|
Form of employment agreement effective upon a change of control between Schering-Plough and certain executives for new agreements beginning in January 1, 2008 — Incorporated by reference to Exhibit 10(e)(xv) to Schering-Plough’s 10-K for the year ended December 31, 2008 (No. 1-6571)
|
10.31
|
|
—
|
|
Distribution agreement between Schering-Plough and Centocor, Inc., dated April 3, 1998 — Incorporated by reference to Exhibit 10(u) to Schering-Plough’s Amended 10-K for the year ended December 31, 2003, filed May 3, 2004 (No. 1-6571)†
|
10.32
|
|
—
|
|
Amendment Agreement to the Distribution Agreement between Centocor, Inc., CAN Development, LLC, and Schering-Plough (Ireland) Company — Incorporated by reference to Exhibit 10.1 to Schering-Plough’s Current Report on Form 8-K filed December 21, 2007 (No. 1-6571)†
|
10.33
|
|
—
|
|
Accelerated Share Purchase Agreement between Merck & Co., Inc. and Goldman, Sachs & Co., dated May 20, 2013 — Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the period ended June 30, 2013 (No. 1-6571)
|
12
|
|
—
|
|
Computation of Ratios of Earnings to Fixed Charges
|
21
|
|
—
|
|
Subsidiaries of Merck & Co., Inc.
|
23
|
|
—
|
|
Consent of Independent Registered Public Accounting Firm
|
24.1
|
|
—
|
|
Power of Attorney
|
24.2
|
|
—
|
|
Certified Resolution of Board of Directors
|
31.1
|
|
—
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2
|
|
—
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
Exhibit
Number
|
|
|
|
Description
|
32.1
|
|
—
|
|
Section 1350 Certification of Chief Executive Officer
|
32.2
|
|
—
|
|
Section 1350 Certification of Chief Financial Officer
|
101
|
|
—
|
|
The following materials from Merck & Co., Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statement of Income, (ii) the Consolidated Statement of Comprehensive Income, (iii) the Consolidated Balance Sheet, (iv) the Consolidated Statement of Equity, (v) the Consolidated Statement of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
*
|
Management contract or compensatory plan or arrangement.
|
†
|
Certain portions of the exhibit have been omitted pursuant to a request for confidential treatment. The non-public information has been filed separately with the Securities and Exchange Commission pursuant to rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
MERCK & CO., INC.
|
||
|
|
|
By:
|
KENNETH C. FRAZIER
|
|
|
(Chairman, President and Chief Executive Officer)
|
|
|
|
|
|
By:
|
/S/ MICHAEL J. HOLSTON
|
|
|
Michael J. Holston
|
|
|
(Attorney-in-Fact)
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
KENNETH C. FRAZIER
|
|
Chairman, President and Chief Executive Officer;
Principal Executive Officer; Director
|
|
February 26, 2016
|
ROBERT M. DAVIS
|
|
Executive Vice President and Chief Financial Officer;
Principal Financial Officer
|
|
February 26, 2016
|
RITA A. KARACHUN
|
|
Senior Vice President Finance-Global Controller;
Principal Accounting Officer
|
|
February 26, 2016
|
LESLIE A. BRUN
|
|
Director
|
|
February 26, 2016
|
THOMAS R. CECH
|
|
Director
|
|
February 26, 2016
|
PAMELA J. CRAIG
|
|
Director
|
|
February 26, 2016
|
THOMAS H. GLOCER
|
|
Director
|
|
February 26, 2016
|
WILLIAM B. HARRISON, JR.
|
|
Director
|
|
February 26, 2016
|
C. ROBERT KIDDER
|
|
Director
|
|
February 26, 2016
|
ROCHELLE B. LAZARUS
|
|
Director
|
|
February 26, 2016
|
CARLOS E. REPRESAS
|
|
Director
|
|
February 26, 2016
|
PAUL B. ROTHMAN
|
|
Director
|
|
February 26, 2016
|
PATRICIA F. RUSSO
|
|
Director
|
|
February 26, 2016
|
CRAIG B. THOMPSON
|
|
Director
|
|
February 26, 2016
|
WENDELL P. WEEKS
|
|
Director
|
|
February 26, 2016
|
PETER C. WENDELL
|
|
Director
|
|
February 26, 2016
|
By:
|
|
/S/ MICHAEL J. HOLSTON
|
|
|
Michael J. Holston
|
|
|
(Attorney-in-Fact)
|
Exhibit
Number
|
|
|
|
Description
|
3.1
|
|
—
|
|
Restated Certificate of Incorporation of Merck & Co., Inc. (November 3, 2009) — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
3.2
|
|
—
|
|
By-Laws of Merck & Co., Inc. (effective July 22, 2015) — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K filed July 28, 2015 (No. 1-6571)
|
4.1
|
|
—
|
|
Indenture, dated as of April 1, 1991, between Merck Sharp & Dohme Corp. (f/k/a Schering Corporation) and U.S. Bank Trust National Association (as successor to Morgan Guaranty Trust Company of New York), as Trustee (the 1991 Indenture) — Incorporated by reference to Exhibit 4 to MSD’s Registration Statement on Form S-3 (No. 33-39349)
|
4.2
|
|
—
|
|
First Supplemental Indenture to the 1991 Indenture, dated as of October 1, 1997 — Incorporated by reference to Exhibit 4(b) to MSD’s Registration Statement on Form S-3 (No. 333-36383)
|
4.3
|
|
—
|
|
Second Supplemental Indenture to the 1991 Indenture, dated November 3, 2009 — Incorporated by reference to Exhibit 4.3 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No.1-6571)
|
4.4
|
|
—
|
|
Third Supplemental Indenture to the 1991 Indenture, dated May 1, 2012 —Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the quarter year ended March 31, 2012 (No. 1-6571)
|
4.5
|
|
—
|
|
Indenture, dated November 26, 2003, between Merck & Co., Inc. (f/k/a Schering-Plough Corporation) and The Bank of New York as Trustee (the 2003 Indenture) — Incorporated by reference to Exhibit 4.1 to Schering-Plough’s Current Report on Form 8‑K filed November 28, 2003 (No. 1-6571)
|
4.6
|
|
—
|
|
First Supplemental Indenture to the 2003 Indenture (including Form of Note), dated November 26, 2003 — Incorporated by reference to Exhibit 4.2 to Schering-Plough’s Current Report on Form 8‑K filed November 28, 2003 (No. 1-6571)
|
4.7
|
|
—
|
|
Second Supplemental Indenture to the 2003 Indenture (including Form of Note), dated November 26, 2003 —Incorporated by reference to Exhibit 4.3 to Schering-Plough’s Current Report on Form 8‑K filed November 28, 2003 (No. 1-6571)
|
4.8
|
|
—
|
|
Third Supplemental Indenture to the 2003 Indenture (including Form of Note), dated September 17, 2007 — Incorporated by reference to Exhibit 4.1 to Schering-Plough’s Current Report on Form 8‑K filed September 17, 2007 (No. 1-6571)
|
4.9
|
|
—
|
|
Fourth Supplemental Indenture to the 2003 Indenture (including Form of Note), dated October 1, 2007 — Incorporated by reference to Exhibit 4.1 to Schering-Plough’s Current Report on Form 8‑K filed October 2, 2007 (No.1-6571)
|
4.10
|
|
—
|
|
Fifth Supplemental Indenture to the 2003 Indenture, dated November 3, 2009 — Incorporated by reference to Exhibit 4.4 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
4.11
|
|
—
|
|
Indenture, dated as of January 6, 2010, between Merck & Co., Inc. and U.S. Bank Trust National Association, as Trustee — Incorporated by reference to Exhibit 4.1 to Merck & Co., Inc.’s Current Report on Form 8-K filed December 10, 2010 (No. 1-6571)
|
4.12
|
|
—
|
|
Long-term debt instruments under which the total amount of securities authorized does not exceed 10% of Merck & Co., Inc.’s total consolidated assets are not filed as exhibits to this report. Merck & Co., Inc. will furnish a copy of these agreements to the Securities and Exchange Commission on request.
|
*10.1
|
|
—
|
|
Merck & Co., Inc. Executive Incentive Plan (as amended and restated effective June 1, 2015) — Incorporated by reference to Merck & Co., Inc.’s Schedule 14A filed April 13, 2015 (No. 1-6571)
|
*10.2
|
|
—
|
|
Merck & Co., Inc. Deferral Program Including the Base Salary Deferral Plan (Amended and Restated effective January 1, 2013) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2012 (No. 1-6571)
|
*10.3
|
|
—
|
|
Merck Sharp & Dohme Corp. 2004 Incentive Stock Plan (amended and restated as of November 3, 2009) — Incorporated by reference to Exhibit 10.8 to Merck & Co., Inc.’s Current Report on Form 8‑K filed November 4, 2009 (No. 1-6571)
|
Exhibit
Number
|
|
|
|
Description
|
*10.4
|
|
—
|
|
Merck Sharp & Dohme Corp. 2007 Incentive Stock Plan (effective as amended and restated as of November 3, 2009) — Incorporated by reference to Exhibit 10.7 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
*10.5
|
|
—
|
|
Amendment One to the Merck Sharp & Dohme Corp. 2007 Incentive Stock Plan (effective February 15, 2010) — Incorporated by reference to Exhibit 10.2 to Merck & Co., Inc.’s Current Report on Form 8-K filed February 18, 2010 (No. 1-6571)
|
*10.6
|
|
—
|
|
Merck & Co., Inc. 2010 Incentive Stock Plan (as amended and restated June 1, 2015) — Incorporated by reference to Merck & Co., Inc.’s Schedule 14A filed April 13, 2015 (No. 1-6571)
|
*10.7
|
|
—
|
|
Form of stock option terms for a non-qualified stock option under the Merck Sharp & Dohme Corp. 2007 Incentive Stock Plan and the Schering-Plough 2006 Stock Incentive Plan — Incorporated by reference to Exhibit 10.3 to Merck & Co., Inc.’s Current Report on Form 8-K filed February 15, 2010 (No. 1-6571)
|
*10.8
|
|
—
|
|
Form of stock option terms for 2011 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10‑Q Quarterly Report for the period ended March 31, 2011 (No. 1-6571)
|
*10.9
|
|
—
|
|
Form of stock option terms for 2012 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10‑K Annual Report for the fiscal year ended December 31, 2011 (No. 1-6571)
|
*10.10
|
|
—
|
|
Form of restricted stock unit terms for 2012 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2011 (No. 1-6571)
|
*10.11
|
|
—
|
|
Form of performance share unit terms for 2012 grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the period ended March 31, 2012 (No. 1-6571)
|
*10.12
|
|
—
|
|
Form of stock option terms for 2013 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2012 (No. 1-6571)
|
*10.13
|
|
—
|
|
Form of restricted stock unit terms for 2013 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2012 (No. 1-6571)
|
*10.14
|
|
—
|
|
Form of performance share unit terms for 2013 grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.15
|
|
—
|
|
Form of stock option terms for 2014 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.16
|
|
—
|
|
Form of restricted stock unit terms for 2014 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.17
|
|
—
|
|
Form of performance share unit terms for 2014 grants under the Merck & Co., Inc. 2010 Stock Incentive Plan — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.18
|
|
—
|
|
Form of stock option terms for 2015 quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan
|
*10.19
|
|
—
|
|
Form of restricted stock unit terms for 2015 quarterly and annual grants under the Merck & Co., Inc. 2010 Incentive Stock Plan
|
*10.20
|
|
—
|
|
Form of performance share unit terms for 2015 grants under the Merck & Co., Inc. 2010 Stock Incentive Plan
|
Exhibit
Number
|
|
|
|
Description
|
*10.21
|
|
—
|
|
Merck & Co., Inc. Change in Control Separation Benefits Plan (Effective as Amended and Restated, as of January 1, 2013) — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8‑K dated November 29, 2012 (No. 1-6571)
|
*10.22
|
|
—
|
|
Merck & Co., Inc. U.S. Separation Benefits Plan (effective as of January 1, 2013) (amended and restated as of October 1, 2013) — Incorporated by reference to Merck & Co., Inc.’s Form 10‑Q Quarterly Report for the period ended September 30, 2013 (No. 1-6571)
|
*10.23
|
|
—
|
|
Merck & Co., Inc. U.S. Separation Benefits Plan (amended and restated effective as of November 15, 2014) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2014 (No. 1-6571)
|
*10.24
|
|
—
|
|
Merck & Co., Inc. 2006 Non-Employee Directors Stock Option Plan (amended and restated as of November 3, 2009) — Incorporated by reference to Exhibit 10.5 to Merck & Co., Inc.’s Current Report on Form 8-K filed November 4, 2009 (No. 1-6571)
|
*10.25
|
|
—
|
|
Merck & Co., Inc. 2010 Non-Employee Directors Stock Option Plan (amended and restated as of December 1, 2010) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2010 (No. 1-6571)
|
*10.26
|
|
—
|
|
Retirement Plan for the Directors of Merck & Co., Inc. (amended and restated June 21, 1996) —Incorporated by reference to MSD’s Form 10-Q Quarterly Report for the period ended June 30, 1996 (No. 1-3305)
|
*10.27
|
|
—
|
|
Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation (effective as amended and restated as of December 1, 2010) — Incorporated by reference to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2010 (No. 1-6571)
|
*10.28
|
|
—
|
|
Offer Letter between Merck & Co., Inc. and Robert Davis, dated March 17, 2014 — Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K dated March 27, 2014 (No. 1-6571)
|
*10.29
|
|
—
|
|
Agreement Letter between Merck & Co., Inc. and Bruce N. Kuhlik, dated July 21, 2015 — Incorporated by reference to Merck & Co., Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (No. 1-6571)
|
10.30
|
|
—
|
|
Form of employment agreement effective upon a change of control between Schering-Plough and certain executives for new agreements beginning in January 1, 2008 — Incorporated by reference to Exhibit 10(e)(xv) to Schering-Plough’s 10-K for the year ended December 31, 2008 (No. 1-6571)
|
10.31
|
|
—
|
|
Distribution agreement between Schering-Plough and Centocor, Inc., dated April 3, 1998 — Incorporated by reference to Exhibit 10(u) to Schering-Plough’s Amended 10-K for the year ended December 31, 2003, filed May 3, 2004 (No. 1-6571)†
|
10.32
|
|
—
|
|
Amendment Agreement to the Distribution Agreement between Centocor, Inc., CAN Development, LLC, and Schering-Plough (Ireland) Company — Incorporated by reference to Exhibit 10.1 to Schering-Plough’s Current Report on Form 8-K filed December 21, 2007 (No. 1-6571)†
|
10.33
|
|
—
|
|
Accelerated Share Purchase Agreement between Merck & Co., Inc. and Goldman, Sachs & Co., dated May 20, 2013 — Incorporated by reference to Merck & Co., Inc.’s Form 10-Q Quarterly Report for the period ended June 30, 2013 (No. 1-6571)
|
12
|
|
—
|
|
Computation of Ratios of Earnings to Fixed Charges
|
21
|
|
—
|
|
Subsidiaries of Merck & Co., Inc.
|
23
|
|
—
|
|
Consent of Independent Registered Public Accounting Firm
|
24.1
|
|
—
|
|
Power of Attorney
|
24.2
|
|
—
|
|
Certified Resolution of Board of Directors
|
31.1
|
|
—
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2
|
|
—
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
Exhibit
Number
|
|
|
|
Description
|
32.1
|
|
—
|
|
Section 1350 Certification of Chief Executive Officer
|
32.2
|
|
—
|
|
Section 1350 Certification of Chief Financial Officer
|
101
|
|
—
|
|
The following materials from Merck & Co., Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statement of Income, (ii) the Consolidated Statement of Comprehensive Income, (iii) the Consolidated Balance Sheet, (iv) the Consolidated Statement of Equity, (v) the Consolidated Statement of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
*
|
Management contract or compensatory plan or arrangement.
|
†
|
Certain portions of the exhibit have been omitted pursuant to a request for confidential treatment. The non-public information has been filed separately with the Securities and Exchange Commission pursuant to rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
Grant Type:
|
NQSO - Annual
|
Option Price:
|
$59.86
|
Grant Date:
|
May 1, 2025
|
Expiration Date:
|
April 30, 2025
|
|
|
Vesting Date
|
Portion that Vests
|
May 1, 2016
|
First: 33.333%
|
May 1, 2017
|
Second: 33.333%
|
May 1, 2018
|
Balance
|
Grant Type:
|
PSU - Annual
|
Grant Date:
|
March 31, 2015
|
Award Period:
|
Jan. 1, 2015 -
|
|
Dec. 31, 2017
|
TSR Performance Payout %
x Target Shares
x 50%
|
+
|
Adjusted Operating Cash Flow Payout %
x Target Shares
x 50%
|
=
|
Final Award
|
|
IX.
|
CLAWBACK POLICY FOR PSUS UPON SIGNIFICANT RESTATEMENT OF FINANCIAL RESULTS
AND CERTAIN COMPLIANCE VIOLATIONS
|
Grant Type:
|
RSU - Annual
|
Grant Date:
|
May 1, 2015
|
Vesting Date:
|
May 1, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Years Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Income Before Taxes
|
$
|
5,401
|
|
|
$
|
17,283
|
|
|
$
|
5,545
|
|
|
$
|
8,739
|
|
|
$
|
7,334
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Add (Subtract):
|
|
|
|
|
|
|
|
|
|
||||||||||
One-third of rents
|
101
|
|
|
117
|
|
|
122
|
|
|
133
|
|
|
138
|
|
|||||
Interest expense, gross
|
672
|
|
|
732
|
|
|
801
|
|
|
714
|
|
|
749
|
|
|||||
Interest capitalized, net of amortization
|
(3)
|
|
|
(1)
|
|
|
(2)
|
|
|
(49)
|
|
|
(2)
|
|
|||||
Equity (income) loss from affiliates, net of distributions
|
(155)
|
|
|
(72)
|
|
|
(168)
|
|
|
(350)
|
|
|
(394)
|
|
|||||
Earnings as defined
|
$
|
6,016
|
|
|
$
|
18,059
|
|
|
$
|
6,298
|
|
|
$
|
9,187
|
|
|
$
|
7,825
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
One-third of rents
|
$
|
101
|
|
|
$
|
117
|
|
|
$
|
122
|
|
|
$
|
133
|
|
|
$
|
138
|
|
Interest expense, gross
|
672
|
|
|
732
|
|
|
801
|
|
|
714
|
|
|
749
|
|
|||||
Preferred stock dividends
|
—
|
|
|
86
|
|
|
147
|
|
|
163
|
|
|
138
|
|
|||||
Fixed Charges
|
$
|
773
|
|
|
$
|
935
|
|
|
$
|
1,070
|
|
|
$
|
1,010
|
|
|
$
|
1,025
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
8
|
|
|
19
|
|
|
6
|
|
|
9
|
|
|
8
|
|
Name
|
Country or State
of Incorporation
|
7728026 Canada Inc.
|
Canada
|
Aacifar-Produtos Quimicos e Farmaceuticos, Lda
|
Portugal
|
Abmaxis Inc.
|
Delaware
|
Aptus Health Holdings, Inc.
|
Delaware
|
Aptus Health, Inc.
|
Delaware
|
Aquaculture Holdings Limited
|
United Kingdom
|
Aquaculture Vaccines Limited
|
United Kingdom
|
Ark Products Limited
|
United Kingdom
|
AVL Holdings Limited
|
United Kingdom
|
Banyu Pharmaceutical Company, Ltd.
|
Japan
|
BRC Ltd.
|
Bermuda
|
Burgwedel Biotech GmbH
|
Germany
|
C3i (UK) Limited
|
United Kingdom
|
C3i Europe EOOD
|
Bulgaria
|
C3i Japan GK
|
Japan
|
C3i Services & Technology (Dalian) Co. Ltd.
|
China
|
C3i Support Services Private Limited
|
India
|
C3i, Inc.
|
New York
|
Canji, Inc.
|
Delaware
|
cCam Biotherapeutics Ltd.
|
Israel
|
Cherokee Pharmaceuticals LLC
|
Delaware
|
Comsort, Inc.
|
Delaware
|
Continuum Professional Services Limited
|
United Kingdom
|
Cooper Veterinary Products (Proprietary) Limited
|
South Africa
|
Coopers Animal Health Limited
|
United Kingdom
|
Coopers Sáude Animal Indústria e Comércio Ltda.
|
Brazil
|
Cosmas B.V.
|
Netherlands
|
Cubist (UK) Ltd
|
United Kingdom
|
Cubist Australia Pty Ltd
|
Australia
|
Cubist Bermuda Ltd.
|
Bermuda
|
Cubist Pharmaceuticals (UK) Ltd.
|
United Kingdom
|
Cubist Pharmaceuticals Danmark ApS
|
Denmark
|
Cubist Pharmaceuticals España, S.L.U.
|
Spain
|
Cubist Pharmaceuticals France
|
France
|
Cubist Pharmaceuticals GmbH
|
Switzerland
|
Cubist Pharmaceuticals Holdings LLC
|
Delaware
|
Cubist Pharmaceuticals Italia-Società a responsabilità limitata
|
Italy
|
Cubist Pharmaceuticals LLC
|
Delaware
|
Cubist Pharmaceuticals U.S.
|
Massachusetts
|
Dashtag
|
United Kingdom
|
Desarrollos Farmaceuticos Y Cosmeticos, S.A.
|
Spain
|
Dieckmann Arzneimittel GmbH
|
Germany
|
Diosynth France
|
France
|
Diosynth Holding B.V.
|
Netherlands
|
Diosynth Limited
|
United Kingdom
|
Diosynth Produtos Farmo-quimicos Ltda.
|
Brazil
|
Elastec S.R.L.
|
Argentina
|
Essex Italia s.r.l.
|
Italy
|
Essex Pharmaceuticals, Inc.
|
Philippines
|
Essexfarm, S.A.
|
Ecuador
|
European Insurance Risk Excess Designated Activity Company
|
Ireland
|
Farmacox-Companhia Farmaceutica, Lda
|
Portugal
|
Farmasix-Produtos Farmaceuticos, Lda
|
Portugal
|
Financiere MSD
|
France
|
Fontelabor-Produtos Farmaceuticos, Lda.
|
Portugal
|
Frosst Laboratories, Inc.
|
Delaware
|
Frosst Portuguesa - Produtos Farmaceuticos, Lda.
|
Portugal
|
Fulford (India) Limited
1
|
India
|
Global Safety Surveillance LLC
|
Delaware
|
GlycoFi, Inc.
|
Delaware
|
Hangzhou MSD Pharmaceutical Co., Ltd.
1
|
China
|
Harrisvaccines, Inc.
|
Iowa
|
Hawk and Falcon L.L.C.
|
Delaware
|
Healthcare Services and Solutions, LLC
|
Delaware
|
Heptafarma - Companhia Farmacêutica, Sociedade Unipessoal, Lda.
|
Portugal
|
HMR Weight Management Services Corp.
|
Delaware
|
Hydrochemie GmbH
|
Germany
|
Idenix GmbH
|
Switzerland
|
Idenix Pharmaceuticals LLC
|
Delaware
|
Idenix SARL
|
France
|
InfoMedics International, Inc.
|
Delaware
|
InfoMedics, Inc.
|
Delaware
|
International Indemnity Ltd.
|
Bermuda
|
Intervet
|
France
|
Intervet (Hong Kong) Limited
|
Hong Kong
|
Intervet (Ireland) Limited
|
Ireland
|
Intervet (Israel) Ltd.
|
Israel
|
Intervet (M) Sdn. Bhd.
|
Malaysia
|
Intervet (Proprietary) Limited
|
South Africa
|
Intervet (Thailand) Ltd.
|
Thailand
|
Intervet AB
|
Sweden
|
Intervet Agencies B.V.
|
Netherlands
|
Intervet Animal Health Production B.V.
|
Netherlands
|
Interveterinaria SA de CV
|
Mexico
|
Kirby-Warrick Pharmaceuticals Limited
|
United Kingdom
|
Koneksa Health LLC
|
Delaware
|
Laboratoires Merck Sharp & Dohme-Chibret
|
France
|
Laboratorios Abello, S.A.
|
Spain
|
Laboratorios Biopat, S.A.
|
Spain
|
Laboratorios Chibret, S.A.
|
Spain
|
Laboratorios Essex S.A.
|
Argentina
|
Laboratorios Frosst, S.A.
|
Spain
|
Laboratorios Quimico-Farmaceuticos Chibret, Lda.
|
Portugal
|
Livestock Nutrition Technologies Pty. Ltd.
|
Australia
|
Maple Leaf Holdings GmbH
|
Switzerland
|
Maya Tibbi Limited Sirketi
|
Turkey
|
MCM Vaccine Co.
1
|
Pennsylvania
|
Med Help International, Inc.
|
Delaware
|
Med-Nim (Proprietary) Limited
|
South Africa
|
Merck and Company, Incorporated
|
Delaware
|
Merck Canada Inc.
|
Canada
|
Merck Capital Ventures, LLC
1
|
Delaware
|
Merck Frosst Canada & Co.
|
Canada
|
Merck Frosst Company
|
Canada
|
Merck Frosst Finco LP
|
Canada
|
Merck Global Health Innovation Fund, LLC
|
Delaware
|
Merck Global Health Innovation, Private Equity, LLC
|
Delaware
|
Merck Global Research LLC
|
Delaware
|
Merck HDAC Research, LLC
|
Delaware
|
Merck Holdings II Corp.
|
Delaware
|
Merck Holdings III Corp.
|
Delaware
|
Merck Holdings LLC
|
Delaware
|
Merck Lumira Biosciences Fund L.P.
1
|
Canada
|
Merck Registry Holdings, Inc.
|
New Jersey
|
Merck Respiratory Health Company
|
Nevada
|
Merck SH Inc.
|
Delaware
|
Merck Sharp & Dohme (Argentina) Inc.
|
Delaware
|
Merck Sharp & Dohme (Asia) Limited
|
Hong Kong
|
Merck Sharp & Dohme (Australia) Pty. Limited
|
Australia
|
Merck Sharp & Dohme (Chile) Ltda.
|
Chile
|
Merck Sharp & Dohme (China) Limited
|
Hong Kong
|
Merck Sharp & Dohme (Enterprises) B.V.
|
Netherlands
|
Merck Sharp & Dohme (Europe) Inc.
|
Delaware
|
Merck Sharp & Dohme (Holdings) B.V.
|
Netherlands
|
Merck Sharp & Dohme (Holdings) Limited
|
United Kingdom
|
Merck Sharp & Dohme (Holdings) Pty Ltd
|
Australia
|
Merck Sharp & Dohme (I.A.) LLC
|
Delaware
|
Merck Sharp & Dohme (International) Limited
|
Bermuda
|
Merck Sharp & Dohme (Israel - 1996) Company Ltd.
|
Israel
|
Merck Sharp & Dohme (Italia) S.p.A.
|
Italy
|
Merck Sharp & Dohme (Malaysia) SDN. BHD.
|
Malaysia
|
Merck Sharp & Dohme (New Zealand) Limited
|
New Zealand
|
Merck Sharp & Dohme (Sweden) A.B.
|
Sweden
|
Merck Sharp & Dohme (Switzerland) GmbH
|
Switzerland
|
Merck Sharp & Dohme Animal Health, S.L.
|
Spain
|
Merck Sharp & Dohme Asia Pacific Services Pte. Ltd.
|
Singapore
|
Merck Sharp & Dohme B.V.
|
Netherlands
|
Merck Sharp & Dohme BH d.o.o.
|
Bosnia
|
Merck Sharp & Dohme Bulgaria EOOD
|
Bulgaria
|
Merck Sharp & Dohme Colombia S.A.S.
|
Colombia
|
Merck Sharp & Dohme Comercializadora, S. de R.L. de C.V.
|
Mexico
|
Merck Sharp & Dohme Corp.
|
New Jersey
|
Merck Sharp & Dohme Cyprus Limited
|
Cyprus
|
Merck Sharp & Dohme d.o.o.
|
Croatia
|
Merck Sharp & Dohme d.o.o. Belgrade
|
Serbia
|
Merck Sharp & Dohme de Espana SAU
|
Spain
|
Merck Sharp & Dohme de Puerto Rico, Inc.
|
Delaware
|
Merck Sharp & Dohme Farmaceutica Ltda.
|
Brazil
|
Merck Sharp & Dohme Finance Europe Limited
|
United Kingdom
|
Merck Sharp & Dohme Gesellschaft m.b.H.
|
Austria
|
Merck Sharp & Dohme IDEA AG
|
Switzerland
|
Merck Sharp & Dohme inovativna zdravila d.o.o.
|
Slovenia
|
Merck Sharp & Dohme International Services B.V.
|
Netherlands
|
Merck Sharp & Dohme Ireland (Human Health) Ltd
|
Ireland
|
Merck Sharp & Dohme Limited
|
United Kingdom
|
Merck Sharp & Dohme Manufacturing
|
Ireland
|
Merck Sharp & Dohme OU
|
Estonia
|
Merck Sharp & Dohme Peru SRL
|
Peru
|
Merck Sharp & Dohme Pharmaceutical Industrial and Commercial Societe Anonyme
|
Greece
|
Merck Sharp & Dohme Quimica de Puerto Rico, Inc.
|
Delaware
|
Merck Sharp & Dohme Research GmbH
|
Switzerland
|
Merck Sharp & Dohme Romania SRL
|
Romania
|
Merck Sharp & Dohme S.A.
|
Morocco
|
Merck Sharp & Dohme s.r.o.
|
Czech Republic
|
Merck Sharp & Dohme Saude Animal Ltda.
|
Brazil
|
Merck Sharp & Dohme SIA
|
Latvia
|
Merck Sharp & Dohme Singapore Trading Pte. Ltd.
|
Singapore
|
Merck Sharp & Dohme Tunisie SARL
|
Tunisia
|
Merck Sharp & Dohme, Limitada
|
Portugal
|
Merck Sharp & Dohme, S. de R.L. de C.V.
|
Mexico
|
Merck Sharp & Dohme, s.r.o.
|
Slovakia
|
Merck Sharp Dohme Ilaclari Limited Sirketi
|
Turkey
|
ML Holdings (Canada) Inc.
|
Canada
|
MRL Ventures Fund LLC
|
Delaware
|
MSD (I.A.) B.V.
|
Netherlands
|
MSD (L-SP) Unterstützungskasse GmbH
|
Germany
|
MSD (Nippon Holdings) B.V.
|
Netherlands
|
MSD (Norge) AS
|
Norway
|
MSD (Proprietary) Limited
|
South Africa
|
MSD (Shanghai) Pharmaceuticals Consultancy Co., Ltd.
|
China
|
MSD (Thailand) Ltd.
|
Thailand
|
MSD Access Sdn. Bhd.
|
Malaysia
|
MSD Animal Health (Shanghai) Trading Co., Ltd.
|
China
|
MSD Animal Health BVBA
|
Belgium
|
MSD Animal Health FZ-LLC
|
United Arab Emirates
|
MSD Animal Health GmbH
|
Switzerland
|
MSD Animal Health Innovation
|
France
|
MSD Animal Health Innovation AS
|
Norway
|
MSD Animal Health Innovation GmbH
|
Germany
|
MSD Animal Health Innovation Pte. Ltd.
|
Singapore
|
MSD Animal Health Korea Ltd.
|
Korea, Republic of
|
MSD Animal Health Limited
|
United Kingdom
|
MSD Animal Health Norge AS
|
Norway
|
MSD Animal Health Pension Trustee Limited
|
United Kingdom
|
MSD Animal Health S.r.l.
|
Italy
|
MSD Animal Health, Lda.
|
Portugal
|
MSD Argentina Holdings B.V.
|
Netherlands
|
MSD Argentina SRL
|
Argentina
|
MSD Asia Holdings Pte. Ltd.
|
Singapore
|
MSD Belgium BVBA/SPRL
|
Belgium
|
MSD Biopharma B.V.
|
Netherlands
|
MSD BM 1 Ltd.
|
Bermuda
|
MSD BM 2 Ltd.
|
Bermuda
|
MSD Brazil Investments B.V.
|
Netherlands
|
MSD Central America Services S. de R.L.
|
Panama
|
MSD China (Investments) B.V.
|
Netherlands
|
MSD China B.V.
|
Netherlands
|
MSD China Holding Co., Ltd.
|
China
|
MSD Consumer Care Limited
|
United Kingdom
|
MSD Cubist Holdings
|
Ireland
|
MSD Danmark ApS
|
Denmark
|
MSD Egypt LLC
|
Egypt
|
MSD EIC
|
Ireland
|
MSD Eurofinance
|
Bermuda
|
MSD Farmaceutica C.A.
|
Venezuela
|
MSD FI BV
|
Netherlands
|
MSD Finance 2 LLC
|
Delaware
|
MSD Finance B.V.
|
Netherlands
|
MSD Finance Company
|
Bermuda
|
MSD Finance Holding NL B.V.
|
Netherlands
|
MSD Finance Holdings
|
Ireland
|
MSD Finland Oy
|
Finland
|
MSD France
|
France
|
MSD Global Research GmbH
|
Switzerland
|
MSD Holdings 2 G.K.
|
Japan
|
MSD Holdings G.K.
|
Japan
|
MSD Hong Kong Holdings Coöperatief U.A.
|
Netherlands
|
MSD Human Health Holding B.V.
|
Netherlands
|
MSD IDEA Pharmaceuticals Nigeria Limited
|
Nigeria
|
MSD IDEA Tunisie
|
Tunisia
|
MSD Idenix Holdings
|
Ireland
|
MSD International Finance Coöperatief U.A.
|
Netherlands
|
MSD International Finance LLC
|
Delaware
|
MSD International GmbH
|
Switzerland
|
MSD International Holdings 2 B.V.
|
Netherlands
|
MSD International Holdings GmbH
|
Switzerland
|
MSD International Holdings, Inc.
|
Delaware
|
MSD International Investment Holdings
|
Ireland
|
MSD International Manufacturing GmbH
|
Switzerland
|
MSD Investment Holdings (Ireland)
|
Ireland
|
MSD Investments (Holdings) GmbH
|
Switzerland
|
MSD Ireland Finance B.V.
|
Netherlands
|
MSD IT Global Innovation Center s.r.o.
|
Czech Republic
|
MSD Italia s.r.l.
|
Italy
|
MSD K.K.
|
Japan
|
MSD Korea Ltd.
|
Korea
|
MSD Laboratories India LLC
|
Delaware
|
MSD Latin America Services S. de R.L.
|
Panama
|
MSD Latin America Services S. de R.L. de C.V.
|
Mexico
|
MSD Limited
|
United Kingdom
|
MSD Luxembourg S.a.r.l.
|
Luxembourg
|
MSD Merck Sharp & Dohme AG
|
Switzerland
|
MSD Mexico Investments B.V.
|
Netherlands
|
MSD Netherlands (Holding) B.V.
|
Netherlands
|
MSD NL 10 Coöperatief U.A.
|
Netherlands
|
MSD NL 2 B.V.
|
Netherlands
|
MSD NL 4 B.V.
|
Netherlands
|
MSD Overseas Manufacturing Co (Ireland)
|
Ireland
|
MSD Panama International Services S. de R.L.
|
Panama
|
MSD Participations B.V.
|
Netherlands
|
MSD Pharma (Singapore) Pte. Ltd.
|
Singapore
|
MSD Pharma GmbH
|
Germany
|
MSD Pharma Hungary Korlatolt Felelossegu Tarsasag
|
Hungary
|
MSD Pharmaceuticals
|
Russian Federation
|
MSD Pharmaceuticals Holdings
|
Ireland
|
MSD Pharmaceuticals Investments 1
|
Ireland
|
MSD Pharmaceuticals Investments 3
|
Ireland
|
MSD Pharmaceuticals Ireland
|
Ireland
|
MSD Pharmaceuticals Private Limited
|
India
|
MSD Polska Dystrybucja Sp. z.o.o.
|
Poland
|
MSD Polska Sp.z.o.o.
|
Poland
|
MSD R&D (China) Co., Ltd.
|
China
|
MSD R&D Innovation Centre Limited
|
United Kingdom
|
MSD Regional Business Support Center GmbH
|
Germany
|
MSD Registry Holdings, Inc.
|
New Jersey
|
MSD Shared Business Services EMEA Limited
|
Ireland
|
MSD Sharp & Dohme Gesellschaft mit beschränkter Haftung
|
Germany
|
MSD Supply Services Inc.
|
Puerto Rico
|
MSD Switzerland Investments 1
|
Ireland
|
MSD Switzerland Investments 2
|
Ireland
|
MSD Switzerland Investments 3
|
Ireland
|
MSD Switzerland Investments 4
|
Ireland
|
MSD Technology Singapore Pte. Ltd.
|
Singapore
|
MSD Tuas Singapore Pte. Ltd.
|
Singapore
|
MSD Ukraine Limited Liability Company
|
Ukraine
|
MSD Unterstutzungskasse GmbH
|
Germany
|
MSD Venezuela Holding GmbH
|
Switzerland
|
MSD Ventures (Ireland)
|
Ireland
|
MSD Verwaltungs GmbH
|
Germany
|
MSD Vietnam Company Limited
|
Vietnam
|
MSD Vietnam Holdings B.V.
|
Netherlands
|
MSD Vostok B.V.
|
Netherlands
|
MSDRG LLC
|
Delaware
|
MSD-SP Ltd.
|
United Kingdom
|
MSD-Sun FZ-LLC
|
United Arab Emirates
|
MSD-SUN, LLC
1
|
Delaware
|
MSP Singapore Company, LLC
|
Delaware
|
Multilan AG
|
Switzerland
|
Mycofarm UK Limited
|
United Kingdom
|
N.V. Organon
|
Netherlands
|
Nanjing Organon Pharmaceutical Co., Ltd.
|
China
|
Nihon MSD G.K.
|
Japan
|
Nourifarma - Produtos Quimicos e Farmaceuticos Lda
|
Portugal
|
Nourypharma Ltd.
|
United Kingdom
|
NovaCardia, Inc.
|
Delaware
|
OBS Holdings B.V.
|
Netherlands
|
Oncoethix GmbH
|
Switzerland
|
Optimer Pharmaceuticals LLC
|
Delaware
|
Organon (India) Private Limited
1
|
India
|
Organon (Ireland) Ltd
|
Ireland
|
Organon (Philippines) Inc.
|
Philippines
|
Organon A/O
|
Russian Federation
|
Organon Agencies B.V.
|
Netherlands
|
Organon BioSciences International B.V.
|
Netherlands
|
Organon BioSciences Ventures B.V.
|
Netherlands
|
Organon China B.V.
|
Netherlands
|
Organon Dominicana SA
|
Dominican Republic
|
Organon Egypt Ltd
|
Egypt
|
Organon Laboratories Limited
|
United Kingdom
|
Organon Latin America S.A.
|
Uruguay
|
Organon Middle East Ltd.
|
Cyprus
|
Organon Middle East S.A.L. (Lebanon)
|
Lebanon
|
Organon Participations B.V.
|
Netherlands
|
Organon Teknika Corporation LLC
|
Delaware
|
Organon USA Inc.
|
New Jersey
|
P.T. Merck Sharp & Dohme Indonesia
|
Indonesia
|
PI International PVT LTD.
|
United Kingdom
|
Pitman-Moore Saude Animal Comercio e Distribuicao de Produtos Veterinarios
|
Brazil
|
Plough (U.K.) Limited
|
United Kingdom
|
Protein Transaction, LLC
|
Delaware
|
PT Intervet Indonesia
|
Indonesia
|
PT Merck Sharp Dohme Pharma Tbk
1
|
Indonesia
|
PT Organon Indonesia
|
Indonesia
|
Rosetta Biosoftware UK Limited
|
United Kingdom
|
Rosetta Inpharmatics LLC
|
Delaware
|
Sanofi Pasteur MSD AB
1
|
Sweden
|
Sanofi Pasteur MSD AG
1
|
Switzerland
|
Sanofi Pasteur MSD Gestion S.A.
1
|
France
|
Sanofi Pasteur MSD GmbH
1
|
Austria
|
Sanofi Pasteur MSD GmbH
1
|
Germany
|
Sanofi Pasteur MSD Limited
1
|
United Kingdom
|
Sanofi Pasteur MSD Ltd.
1
|
Ireland
|
Sanofi Pasteur MSD N.V./S.A.
1
|
Belgium
|
Sanofi Pasteur MSD S.A.
1
|
Portugal
|
Sanofi Pasteur MSD S.A.
1
|
Spain
|
Sanofi Pasteur MSD S.p.A.
1
|
Italy
|
Sanofi Pasteur MSD SNC
1
|
France
|
SARL Merck Sharp & Dohme Algerie
|
Algeria
|
Schering-Plough
|
France
|
Schering-Plough (India) Private Limited
|
India
|
Schering-Plough (Ireland) Company
|
Ireland
|
Schering-Plough Animal Health Limited
|
New Zealand
|
Schering-Plough Animal Health, Inc.
|
Philippines
|
Schering-Plough Bermuda Ltd.
|
Bermuda
|
Schering-Plough Canada Inc.
|
Canada
|
Schering-Plough Central East AG
|
Switzerland
|
Schering-Plough Clinical Trials, S.E.
|
United Kingdom
|
Schering-Plough Corporation
|
Philippines
|
Schering-Plough Corporation, U.S.A.
|
Delaware
|
Schering-Plough del Ecuador, S.A.
|
Ecuador
|
Schering-Plough del Peru S.A.
|
Peru
|
Schering-Plough Holdings (Ireland) Company
|
Ireland
|
Schering-Plough Holdings Limited
|
United Kingdom
|
Schering-Plough Indústria Farmacêutica Ltda.
|
Brazil
|
Schering-Plough Int Limited
|
United Kingdom
|
Schering-Plough Investments Ltd.
|
Delaware
|
Schering-Plough Israel AG
|
Switzerland
|
Schering-Plough Labo NV
|
Belgium
|
Schering-Plough Limited
|
Taiwan (Republic of China)
|
Schering-Plough Limited
|
United Kingdom
|
Schering-Plough Maroc S.a.R.L.
|
Morocco
|
Schering-Plough S.A.
|
Panama
|
Schering-Plough S.A.
|
Paraguay
|
Schering-Plough S.A.
|
Spain
|
Schering-Plough S.A.
|
Uruguay
|
Schering-Plough S.A. de C.V.
|
Mexico
|
Schering-Plough Sante Animale
|
France
|
Sentipharm AG
|
Switzerland
|
Servicios Veterniarios Servet, Sociedad Anónima
|
Costa Rica
|
Sewaren Corp.
|
Delaware
|
Shanghai MSD Pharmaceutical Trading Co., Ltd.
|
China
|
Simcere MSD (Shanghai) Pharmaceuticals Co., Ltd.
1
|
China
|
Sinova AG
1
|
Switzerland
|
Skyscape.Com India Private Limited
|
India
|
SmartCells, Inc.
|
Delaware
|
SOL Limited
|
Bermuda
|
S-P Ril Ltd.
|
United Kingdom
|
S-P Veterinary (UK) Limited
|
United Kingdom
|
S-P Veterinary Holdings Limited
|
United Kingdom
|
S-P Veterinary Limited
|
United Kingdom
|
S-P Veterinary Pensions Limited
|
United Kingdom
|
Supera Rx Medicamentos Ltda.
1
|
Brazil
|
Tasman Vaccine Laboratory (UK) Ltd
|
United Kingdom
|
TELERx Marketing Inc.
|
Pennsylvania
|
Theriak B.V.
|
Netherlands
|
Thomas Morson & Son Limited
|
United Kingdom
|
Tomorrow Networks, LLC
|
Delaware
|
/s/ Kenneth C. Frazier
|
Chairman, President and Chief Executive Officer
|
|
Kenneth C. Frazier
|
(Principal Executive Officer; Director)
|
|
|
|
|
/s/ Robert M. Davis
|
Executive Vice President and Chief Financial Officer
|
|
Robert M. Davis
|
(Principal Financial Officer)
|
|
|
|
|
/s/ Rita A. Karachun
|
Senior Vice President Finance—Global Controller
|
|
Rita A. Karachun
|
(Principal Accounting Officer)
|
/s/ Leslie A. Brun
|
|
/s/ Carlos E. Represas
|
Leslie A. Brun
|
|
Carlos E. Represas
|
|
|
|
/s/ Thomas R. Cech
|
|
/s/ Paul B. Rothman
|
Thomas R. Cech
|
|
Paul B. Rothman
|
|
|
|
/s/ Pamela J. Craig
|
|
/s/ Patricia F. Russo
|
Pamela J. Craig
|
|
Patricia F. Russo
|
|
|
|
/s/ Thomas H. Glocer
|
|
/s/ Craig B. Thompson
|
Thomas H. Glocer
|
|
Craig B. Thompson
|
|
|
|
/s/ William B. Harrison, Jr.
|
|
/s/ Wendell P. Weeks
|
William B. Harrison, Jr.
|
|
Wendell P. Weeks
|
|
|
|
/s/ C. Robert Kidder
|
|
/s/ Peter C. Wendell
|
C. Robert Kidder
|
|
Peter C. Wendell
|
|
|
|
/s/ Rochelle B. Lazarus
|
|
|
Rochelle B. Lazarus
|
|
|
|
|
|
|
|
|
|
|
[Corporate Seal]
|
|
|
/s/ Katie E. Fedosz
|
|
|
|
Katie E. Fedosz
Senior Assistant Secretary
|
By:
|
/s/ Kenneth C. Frazier
|
|
KENNETH C. FRAZIER
Chairman, President and Chief Executive Officer
|
By:
|
/s/ Robert M. Davis
|
|
ROBERT M. DAVIS
Executive Vice President and Chief Financial Officer
|
Dated: February 26, 2016
|
|
/s/ Kenneth C. Frazier
|
|
|
Name: KENNETH C. FRAZIER
|
|
|
Title: Chairman, President and Chief Executive Officer
|
Dated: February 26, 2016
|
|
/s/ Robert M. Davis
|
|
|
Name: ROBERT M. DAVIS
|
|
|
Title: Executive Vice President and Chief Financial Officer
|