|
|
☒
|
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
☐
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
2000 Galloping Hill Road
|
||||
Kenilworth
|
New Jersey
|
07033
|
New Jersey
|
22-1918501
|
|
(State or other jurisdiction of incorporation)
|
(I.R.S Employer Identification No.)
|
Securities Registered pursuant to Section 12(b) of the Act:
|
||
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on which Registered
|
Common Stock ($0.50 par value)
|
MRK
|
New York Stock Exchange
|
1.125% Notes due 2021
|
MRK/21
|
New York Stock Exchange
|
0.500% Notes due 2024
|
MRK 24
|
New York Stock Exchange
|
1.875% Notes due 2026
|
MRK/26
|
New York Stock Exchange
|
2.500% Notes due 2034
|
MRK/34
|
New York Stock Exchange
|
1.375% Notes due 2036
|
MRK 36A
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
Documents Incorporated by Reference:
|
||
Document
|
|
Part of Form 10-K
|
Proxy Statement for the Annual Meeting of Shareholders to be held May 26, 2020, to be filed with the
Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this report |
|
Part III
|
|
|
|
Page
|
Item 1.
|
|||
Item 1A.
|
|||
|
|||
Item 1B.
|
|||
Item 2.
|
|||
Item 3.
|
|||
Item 4.
|
|||
|
|||
Item 5.
|
|||
Item 6.
|
|||
Item 7.
|
|||
Item 7A.
|
|||
Item 8.
|
|||
|
(a)
|
||
|
|
||
|
|
||
|
(b)
|
||
Item 9.
|
|||
Item 9A.
|
|||
|
|||
Item 9B.
|
|||
Item 10.
|
|||
Item 11.
|
|||
Item 12.
|
|||
Item 13.
|
|||
Item 14.
|
|||
Item 15.
|
|||
|
|
|
|
Item 16.
|
|||
|
Item 1.
|
Business.
|
($ in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Total Sales
|
$
|
46,840
|
|
|
$
|
42,294
|
|
|
$
|
40,122
|
|
Pharmaceutical
|
41,751
|
|
|
37,689
|
|
|
35,390
|
|
|||
Keytruda
|
11,084
|
|
|
7,171
|
|
|
3,809
|
|
|||
Januvia/Janumet
|
5,524
|
|
|
5,914
|
|
|
5,896
|
|
|||
Gardasil/Gardasil 9
|
3,737
|
|
|
3,151
|
|
|
2,308
|
|
|||
ProQuad/M-M-R II/Varivax
|
2,275
|
|
|
1,798
|
|
|
1,676
|
|
|||
Bridion
|
1,131
|
|
|
917
|
|
|
704
|
|
|||
Isentress/Isentress HD
|
975
|
|
|
1,140
|
|
|
1,204
|
|
|||
Pneumovax 23
|
926
|
|
|
907
|
|
|
821
|
|
|||
NuvaRing
|
879
|
|
|
902
|
|
|
761
|
|
|||
Zetia/Vytorin
|
874
|
|
|
1,355
|
|
|
2,095
|
|
|||
Simponi
|
830
|
|
|
893
|
|
|
819
|
|
|||
Animal Health
|
4,393
|
|
|
4,212
|
|
|
3,875
|
|
|||
Livestock
|
2,784
|
|
|
2,630
|
|
|
2,484
|
|
|||
Companion Animals
|
1,609
|
|
|
1,582
|
|
|
1,391
|
|
|||
Other Revenues(1)
|
696
|
|
|
393
|
|
|
857
|
|
(1)
|
Other revenues are primarily comprised of Healthcare Services segment revenue, third-party manufacturing sales, and miscellaneous corporate revenues, including revenue hedging activities.
|
Recarbrio
|
July 2019
|
FDA approved Recarbrio (imipenem, cilastatin, and relebactam) for the treatment of adults with complicated urinary tract and complicated intra-abdominal bacterial infections where limited or no alternative treatment options are available.
|
Zerbaxa
|
August 2019
|
EC approved Zerbaxa for the treatment of adults with hospital-acquired pneumonia, including ventilator-associated pneumonia (to be used in combination with an antibacterial agent active against Gram-positive pathogens when these are known or suspected to be contributing to the infectious process.)
|
June 2019
|
FDA approved Zerbaxa 3g dose for the treatment of patients 18 years and older with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP).
|
|
Bravecto
|
November 2019
|
FDA approved Bravecto Plus topical solution for cats indicated for both external and internal parasite infestations.
|
(1)
|
In July 2017, Merck and AstraZeneca entered into a global strategic oncology collaboration to co-develop and co-commercialize AstraZeneca’s Lynparza.
|
Product
|
Year of Expiration (U.S.)
|
Year of Expiration (EU)(1)
|
Year of Expiration (Japan)(2)
|
Year of Expiration (China)
|
Emend for Injection
|
Expired
|
2020(3)
|
2020
|
N/A
|
Januvia
|
2022(3)
|
2022(3)
|
2025-2026
|
2022
|
Janumet
|
2022(3)
|
2023
|
N/A
|
2022
|
Janumet XR
|
2022(3)
|
N/A
|
N/A
|
2022
|
Isentress
|
2024
|
2023(3)
|
2022-2026
|
2022
|
Simponi
|
N/A(4)
|
2024(5)
|
N/A(4)
|
N/A(4)
|
Lenvima(6)
|
2025(3) (with pending PTE)
|
2021 (patents), 2026(3) (SPCs)
|
2026
|
2021
|
Adempas(7)
|
2026(3)
|
2028(3)
|
2027-2028
|
2023
|
Bridion
|
2026(3) (with pending PTE)
|
2023
|
2024
|
2020
|
Nexplanon
|
2027 (device)
|
2025 (device)
|
Not Marketed
|
2025
|
Bravecto
|
2027 (with pending PTE)
|
2025 (patents), 2029 (SPCs)
|
2029
|
2033
|
Gardasil
|
2028
|
2021(3)
|
Expired
|
N/A
|
Gardasil 9
|
2028
|
2025 (patents), 2030(3) (SPCs)
|
N/A
|
2025
|
Keytruda
|
2028
|
2028 (patents), 2030(3) (SPCs)
|
2032-2033
|
2028
|
Lynparza(8)
|
2028(3) (with pending PTE)
|
2024 (patents), 2029(3) (SPCs)
|
2028-2029
|
2024
|
Zerbaxa
|
2028(3)
|
2023 (patents), 2028(3) (SPCs)
|
2028 (with pending PTE)
|
N/A
|
Belsomra
|
2029(3)
|
N/A
|
2031
|
N/A
|
Prevymis
|
2029(3) (with pending PTE)
|
2024 (patents), 2029(3) (SPCs)
|
2029
|
N/A
|
Steglatro(9)
|
2031(3) (with pending PTE)
|
2029 (patents), 2034(3) (SPCs)
|
N/A
|
2029
|
Steglujan(9)
|
2031 (with pending PTE)
|
2029 (patents), 2034 (SPCs)
|
N/A
|
2029
|
Segluromet(9)
|
2031 (with pending PTE)
|
2029 (patents), 2034 (SPCs)
|
N/A
|
2029
|
Delstrigo
|
2032 (with pending PTE)
|
2031 (patents), 2033 (SPCs)
|
N/A
|
N/A
|
Pifeltro
|
2032 (with pending PTE)
|
2031 (patents), 2033 (SPCs)
|
N/A
|
N/A
|
Recarbrio
|
2033(3) (with pending PTE)
|
N/A
|
N/A
|
N/A
|
Note:
|
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.
|
N/A:
|
Currently no marketing approval.
|
(1)
|
The EU date represents the expiration date for the following five countries: France, Germany, Italy, Spain and the United Kingdom (Major EU Markets). If SPC applications have been filed but have not been granted in all Major EU Markets, both the patent expiry date and the SPC expiry date are listed.
|
(2)
|
The PTE system in Japan allows for a patent to be extended more than once provided the later approval is directed to a different indication from that of the previous approval. This may result in multiple PTE approvals for a given patent, each with its own expiration date.
|
(3)
|
Eligible for 6 months Pediatric Exclusivity.
|
(4)
|
The Company has no marketing rights in the U.S., Japan or China.
|
(5)
|
Expiration of the distribution agreement with Janssen Pharmaceuticals, Inc.
|
(6)
|
Part of a global strategic oncology collaboration with Eisai.
|
(7)
|
Being commercialized in a worldwide collaboration with Bayer AG.
|
(8)
|
Part of a global strategic oncology collaboration with AstraZeneca.
|
(9)
|
Being commercialized and promoted in a worldwide, except Japan, collaboration with Pfizer Inc.
|
(1)
|
Being developed in a worldwide collaboration with Bayer AG.
|
Phase 2
|
Phase 3 (Phase 3 Entry Date)
|
Under Review
|
Cancer
|
Cancer
|
New Molecular Entities/Vaccines
|
MK-3475 Keytruda
|
MK-3475 Keytruda
|
Pediatric Neurofibromatosis Type-1
|
Advanced Solid Tumors
|
Biliary Tract (September 2019)
|
MK-5618 (selumetinib)(1) (U.S.)
|
MK-6482
|
Breast (October 2015)
|
HPV Vaccine
|
Renal Cell Carcinoma
|
Cervical (October 2018) (EU)
|
V503 Human Papillomavirus 9-valent Vaccine,
|
MK-7123(2)
|
Colorectal (November 2015)
|
Recombinant (JPN)
|
Solid Tumors
|
Cutaneous Squamous Cell Carcinoma
|
Certain Supplemental Filings
|
MK-7339 Lynparza(1)
|
(August 2019) (EU)
|
Cancer
|
Advanced Solid Tumors
|
Endometrial (August 2019) (EU)
|
MK-3475 Keytruda
|
MK-7690 (vicriviroc)(2)
|
Esophageal (December 2015) (EU)
|
● First-Line Metastatic Non-Small-Cell Lung
|
Colorectal
|
Gastric (May 2015) (EU)
|
Cancer (KEYNOTE-042) (EU)
|
MK-7902 Lenvima(1)
|
Hepatocellular (May 2016) (EU)
|
● First-Line Metastatic Gastric Cancer
|
Biliary Tract
|
Mesothelioma (May 2018)
|
(KEYNOTE-062) (JPN)
|
V937
|
Nasopharyngeal (April 2016)
|
● Recurrent Locally Advanced or Metastatic
|
Melanoma
|
Ovarian (December 2018)
|
Esophageal Cancer (KEYNOTE-180/181)
|
MK-7684(2)
|
Prostate (May 2019)
|
(JPN)
|
Non-Small-Cell Lung
|
Small-Cell Lung (May 2017) (EU)
|
● Recurrent and/or Metastatic Cutaneous
|
MK-1026
|
MK-7339 Lynparza(1,2)
|
Squamous Cell Carcinoma
|
Hematological Malignancies
|
Non-Small-Cell Lung (June 2019)
|
(KEYNOTE-629) (U.S.)
|
MK-4280(2)
|
MK-7902 Lenvima(1,2)
|
● Alternative Dosing Regimen(3)
|
Hematological Malignancies
|
Bladder (May 2019)
|
(Q6W) (U.S.)
|
Non-Small-Cell Lung
|
Endometrial (June 2018) (EU)
|
MK-7339 Lynparza(1)
|
MK-1308(2)
|
Head and Neck Squamous Cell Carcinoma
|
● First-Line gBRCAm Pancreatic Cancer
|
Non-Small-Cell Lung
|
(February 2020)
|
(POLO) (EU)
|
MK-5890(2)
|
Melanoma (March 2019)
|
● First-Line Maintenance Newly Diagnosed
|
Non-Small-Cell Lung
|
Non-Small-Cell Lung (March 2019)
|
Advanced Ovarian Cancer (PAOLA)
|
Cytomegalovirus
|
Cough
|
(U.S.) (EU)
|
V160
|
MK-7264 (gefapixant) (March 2018)
|
● Metastatic Prostate Cancer (PROfound)
|
HIV-1 Infection
|
Heart Failure
|
(U.S.) (EU)
|
MK-8591 (islatravir)
|
MK-1242 (vericiguat) (September 2016)(1)
|
Footnotes:
|
Overgrowth Syndrome
|
HIV-1 Infection
|
(1) Being developed in a collaboration.
|
MK-7075
|
MK-8591A (islatravir/doravirine) (February 2020)
|
(2) Being developed in combination with
|
Pediatric Neurofibromatosis Type-1
|
Pneumoconjugate Vaccine
|
Keytruda.
|
MK-5618 (selumetinib)(1) (EU)
|
V114 (June 2018)
|
(3) The Company received a CRL in February
|
Respiratory Syncytial Virus
|
|
2020. Merck is reviewing the letter and will
|
MK-1654
|
|
discuss next steps with the FDA.
|
Schizophrenia
|
|
|
MK-8189
|
|
|
Item 1A.
|
Risk Factors.
|
•
|
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, or the anticipated labeling, 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.
|
•
|
results in post-approval Phase 4 trials or other studies;
|
•
|
the re-review of products that are already marketed;
|
•
|
the recall or loss of marketing approval of products that are already marketed;
|
•
|
changing government standards or public expectations regarding safety, efficacy, quality or labeling changes; and
|
•
|
scrutiny of 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, including the imposition of trade sanctions or similar restrictions by the United States or other governments;
|
•
|
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 and vaccines 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 pre-clinical and clinical trial data and extensive data regarding the manufacturing procedures, is required for human vaccine candidates, and FDA approval is generally required for the release of each manufactured commercial lot.
|
•
|
Manufacturing biologics and vaccines, 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 and vaccine 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
|
•
|
Biologics and vaccines are frequently costly to manufacture because production ingredients are derived from living animal or plant material, and most biologics and vaccines 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 variability in the manufacturing process and could lead to allegations of harm, including infections or allergic reactions, which allegations would be reviewed through a standard investigation process that could lead to 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.
|
Name
|
Age
|
Offices and Business Experience
|
Kenneth C. Frazier
|
65
|
Chairman, President and Chief Executive Officer (since December 2011)
|
Sanat Chattopadhyay
|
60
|
Executive Vice President and President, Merck Manufacturing Division (since March 2016); Senior Vice President, Operations, Merck Manufacturing Division (November 2009-March 2016)
|
Frank Clyburn
|
55
|
Executive Vice President, Chief Commercial Officer (since January 2019); President, Global Oncology Business Unit (October 2013-December 2018)
|
Robert M. Davis
|
53
|
Executive Vice President, Global Services, and Chief Financial Officer (since April 2016); Executive Vice President and Chief Financial Officer (April 2014-April 2016)
|
Richard R. DeLuca, Jr.
|
57
|
Executive Vice President and President, Merck Animal Health (since September 2011)
|
Michael W. Fleming
|
61
|
Senior Vice President, Chief Ethics and Compliance Officer (since March 2019); Senior Vice President, International Legal and Compliance (January 2017-March 2019); Vice President, International Legal and Compliance (July 2008-January 2017)
|
Julie L. Gerberding
|
64
|
Executive Vice President and Chief Patient Officer, Strategic Communications, Global Public Policy and Population Health (since July 2016); Executive Vice President for Strategic Communications, Global Public Policy and Population Health (January 2015-July 2016)
|
Rita A. Karachun
|
56
|
Senior Vice President Finance - Global Controller (since March 2014)
|
Steven C. Mizell
|
59
|
Executive Vice President, Chief Human Resources Officer (since October 2018); Executive Vice President, Chief Human Resources Officer (December 2016-October 2018) and Executive Vice President, Human Resources, Monsanto Company (August 2011-December 2016)
|
Michael T. Nally
|
44
|
Executive Vice President, Chief Marketing Officer (since January 2019); President, Global Vaccines, Global Human Health (September 2016-January 2019); Managing Director, United Kingdom and Ireland, Global Human Health (January 2014-September 2016)
|
Roger M. Perlmutter, M.D., Ph.D.
|
67
|
Executive Vice President and President, Merck Research Laboratories (since April 2013)
|
Jennifer Zachary
|
42
|
Executive Vice President, General Counsel and Corporate Secretary (since January 2020); Executive Vice President and General Counsel (April 2018-January 2020); Partner, Covington & Burling LLP (January 2013-March 2018)
|
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 October 2018 to purchase up to $10 billion in Merck shares for its treasury.
|
|
End of
Period Value
|
|
2019/2014
CAGR*
|
MERCK
|
$187
|
|
13%
|
PEER GRP.**
|
152
|
|
9%
|
S&P 500
|
174
|
|
12%
|
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
MERCK
|
100.0
|
96.0
|
110.5
|
108.8
|
152.5
|
186.5
|
PEER GRP.
|
100.0
|
103.0
|
99.9
|
119.6
|
127.8
|
151.6
|
S&P 500
|
100.0
|
101.4
|
113.5
|
138.3
|
132.2
|
173.8
|
*
|
Compound Annual Growth Rate
|
**
|
Peer group average was calculated on a market cap weighted basis.
|
Item 6.
|
Selected Financial Data.
|
|
2019 (1)
|
|
2018 (2)
|
|
2017 (3)
|
|
2016 (4)
|
|
2015 (5)
|
||||||||||
Results for Year:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
46,840
|
|
|
$
|
42,294
|
|
|
$
|
40,122
|
|
|
$
|
39,807
|
|
|
$
|
39,498
|
|
Cost of sales
|
14,112
|
|
|
13,509
|
|
|
12,912
|
|
|
14,030
|
|
|
15,043
|
|
|||||
Selling, general and administrative
|
10,615
|
|
|
10,102
|
|
|
10,074
|
|
|
10,017
|
|
|
10,508
|
|
|||||
Research and development
|
9,872
|
|
|
9,752
|
|
|
10,339
|
|
|
10,261
|
|
|
6,796
|
|
|||||
Restructuring costs
|
638
|
|
|
632
|
|
|
776
|
|
|
651
|
|
|
619
|
|
|||||
Other (income) expense, net
|
139
|
|
|
(402
|
)
|
|
(500
|
)
|
|
189
|
|
|
1,131
|
|
|||||
Income before taxes
|
11,464
|
|
|
8,701
|
|
|
6,521
|
|
|
4,659
|
|
|
5,401
|
|
|||||
Taxes on income
|
1,687
|
|
|
2,508
|
|
|
4,103
|
|
|
718
|
|
|
942
|
|
|||||
Net income
|
9,777
|
|
|
6,193
|
|
|
2,418
|
|
|
3,941
|
|
|
4,459
|
|
|||||
Less: Net (loss) income attributable to noncontrolling interests
|
(66
|
)
|
|
(27
|
)
|
|
24
|
|
|
21
|
|
|
17
|
|
|||||
Net income attributable to Merck & Co., Inc.
|
9,843
|
|
|
6,220
|
|
|
2,394
|
|
|
3,920
|
|
|
4,442
|
|
|||||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
3.84
|
|
|
$
|
2.34
|
|
|
$
|
0.88
|
|
|
$
|
1.42
|
|
|
$
|
1.58
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
3.81
|
|
|
$
|
2.32
|
|
|
$
|
0.87
|
|
|
$
|
1.41
|
|
|
$
|
1.56
|
|
Cash dividends declared
|
5,820
|
|
|
5,313
|
|
|
5,177
|
|
|
5,135
|
|
|
5,115
|
|
|||||
Cash dividends declared per common share
|
$
|
2.26
|
|
|
$
|
1.99
|
|
|
$
|
1.89
|
|
|
$
|
1.85
|
|
|
$
|
1.81
|
|
Capital expenditures
|
3,473
|
|
|
2,615
|
|
|
1,888
|
|
|
1,614
|
|
|
1,283
|
|
|||||
Depreciation
|
1,679
|
|
|
1,416
|
|
|
1,455
|
|
|
1,611
|
|
|
1,593
|
|
|||||
Average common shares outstanding (millions)
|
2,565
|
|
|
2,664
|
|
|
2,730
|
|
|
2,766
|
|
|
2,816
|
|
|||||
Average common shares outstanding assuming dilution (millions)
|
2,580
|
|
|
2,679
|
|
|
2,748
|
|
|
2,787
|
|
|
2,841
|
|
|||||
Year-End Position:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
5,263
|
|
|
$
|
3,669
|
|
|
$
|
6,152
|
|
|
$
|
13,410
|
|
|
$
|
10,550
|
|
Property, plant and equipment, net
|
15,053
|
|
|
13,291
|
|
|
12,439
|
|
|
12,026
|
|
|
12,507
|
|
|||||
Total assets
|
84,397
|
|
|
82,637
|
|
|
87,872
|
|
|
95,377
|
|
|
101,677
|
|
|||||
Long-term debt
|
22,736
|
|
|
19,806
|
|
|
21,353
|
|
|
24,274
|
|
|
23,829
|
|
|||||
Total equity
|
26,001
|
|
|
26,882
|
|
|
34,569
|
|
|
40,308
|
|
|
44,767
|
|
|||||
Year-End Statistics:
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of stockholders of record
|
110,023
|
|
|
115,800
|
|
|
121,700
|
|
|
129,500
|
|
|
135,500
|
|
|||||
Number of employees
|
71,000
|
|
|
69,000
|
|
|
69,000
|
|
|
68,000
|
|
|
68,000
|
|
(1)
|
Amounts for 2019 include a charge for the acquisition of Peloton Therapeutics, Inc.
|
(2)
|
Amounts for 2018 include a charge related to the formation of a collaboration with Eisai Co., Ltd.
|
(3)
|
Amounts for 2017 include a provisional net tax charge related to the enactment of U.S. tax legislation and a charge related to the formation of a collaboration with AstraZeneca PLC.
|
(4)
|
Amounts for 2016 include a charge related to the settlement of worldwide patent litigation related to Keytruda.
|
(5)
|
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.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
United States
|
$
|
20,325
|
|
|
12
|
%
|
|
12
|
%
|
|
$
|
18,212
|
|
|
5
|
%
|
|
5
|
%
|
|
$
|
17,424
|
|
International
|
26,515
|
|
|
10
|
%
|
|
13
|
%
|
|
24,083
|
|
|
6
|
%
|
|
6
|
%
|
|
22,698
|
|
|||
Total
|
$
|
46,840
|
|
|
11
|
%
|
|
13
|
%
|
|
$
|
42,294
|
|
|
5
|
%
|
|
5
|
%
|
|
$
|
40,122
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Keytruda
|
$
|
11,084
|
|
|
55
|
%
|
|
58
|
%
|
|
$
|
7,171
|
|
|
88
|
%
|
|
88
|
%
|
|
$
|
3,809
|
|
Alliance Revenue - Lynparza (1)
|
444
|
|
|
137
|
%
|
|
141
|
%
|
|
187
|
|
|
*
|
|
|
*
|
|
|
20
|
|
|||
Alliance Revenue - Lenvima (1)
|
404
|
|
|
171
|
%
|
|
173
|
%
|
|
149
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|||
Emend
|
388
|
|
|
(26
|
)%
|
|
(24
|
)%
|
|
522
|
|
|
(6
|
)%
|
|
(7
|
)%
|
|
556
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Gardasil/Gardasil 9
|
$
|
3,737
|
|
|
19
|
%
|
|
21
|
%
|
|
$
|
3,151
|
|
|
37
|
%
|
|
36
|
%
|
|
$
|
2,308
|
|
ProQuad
|
756
|
|
|
27
|
%
|
|
29
|
%
|
|
593
|
|
|
12
|
%
|
|
12
|
%
|
|
528
|
|
|||
M-M-R II
|
549
|
|
|
28
|
%
|
|
29
|
%
|
|
430
|
|
|
13
|
%
|
|
12
|
%
|
|
382
|
|
|||
Varivax
|
970
|
|
|
25
|
%
|
|
28
|
%
|
|
774
|
|
|
1
|
%
|
|
1
|
%
|
|
767
|
|
|||
RotaTeq
|
791
|
|
|
9
|
%
|
|
10
|
%
|
|
728
|
|
|
6
|
%
|
|
6
|
%
|
|
686
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Bridion
|
$
|
1,131
|
|
|
23
|
%
|
|
26
|
%
|
|
$
|
917
|
|
|
30
|
%
|
|
30
|
%
|
|
$
|
704
|
|
Noxafil
|
662
|
|
|
(11
|
)%
|
|
(7
|
)%
|
|
742
|
|
|
17
|
%
|
|
15
|
%
|
|
636
|
|
|||
Invanz
|
263
|
|
|
(47
|
)%
|
|
(44
|
)%
|
|
496
|
|
|
(18
|
)%
|
|
(17
|
)%
|
|
602
|
|
|||
Cubicin
|
257
|
|
|
(30
|
)%
|
|
(28
|
)%
|
|
367
|
|
|
(4
|
)%
|
|
(5
|
)%
|
|
382
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Simponi
|
$
|
830
|
|
|
(7
|
)%
|
|
(2
|
)%
|
|
$
|
893
|
|
|
9
|
%
|
|
5
|
%
|
|
$
|
819
|
|
Remicade
|
411
|
|
|
(29
|
)%
|
|
(25
|
)%
|
|
582
|
|
|
(31
|
)%
|
|
(33
|
)%
|
|
837
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Isentress/Isentress HD
|
$
|
975
|
|
|
(15
|
)%
|
|
(10
|
)%
|
|
$
|
1,140
|
|
|
(5
|
)%
|
|
(5
|
)%
|
|
$
|
1,204
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Zetia/Vytorin
|
$
|
874
|
|
|
(35
|
)%
|
|
(34
|
)%
|
|
$
|
1,355
|
|
|
(35
|
)%
|
|
(38
|
)%
|
|
$
|
2,095
|
|
Atozet
|
391
|
|
|
13
|
%
|
|
18
|
%
|
|
347
|
|
|
54
|
%
|
|
48
|
%
|
|
225
|
|
|||
Rosuzet
|
120
|
|
|
107
|
%
|
|
115
|
%
|
|
58
|
|
|
12
|
%
|
|
9
|
%
|
|
52
|
|
|||
Adempas
|
419
|
|
|
27
|
%
|
|
30
|
%
|
|
329
|
|
|
10
|
%
|
|
7
|
%
|
|
300
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Januvia/Janumet
|
$
|
5,524
|
|
|
(7
|
)%
|
|
(4
|
)%
|
|
$
|
5,914
|
|
|
—
|
%
|
|
(1
|
)%
|
|
$
|
5,896
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
NuvaRing
|
$
|
879
|
|
|
(3
|
)%
|
|
(2
|
)%
|
|
$
|
902
|
|
|
19
|
%
|
|
18
|
%
|
|
$
|
761
|
|
Implanon/Nexplanon
|
787
|
|
|
12
|
%
|
|
14
|
%
|
|
703
|
|
|
2
|
%
|
|
3
|
%
|
|
686
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||
Biosimilars
|
$
|
252
|
|
|
*
|
|
*
|
|
$
|
64
|
|
|
*
|
|
*
|
|
$
|
5
|
|
($ in millions)
|
2019
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2018
|
|
% Change
|
|
% Change
Excluding
Exchange
|
|
2017
|
||||||||||
Livestock
|
$
|
2,784
|
|
|
6
|
%
|
|
11
|
%
|
|
$
|
2,630
|
|
|
6
|
%
|
|
7
|
%
|
|
$
|
2,484
|
|
Companion Animal
|
1,609
|
|
|
2
|
%
|
|
5
|
%
|
|
1,582
|
|
|
14
|
%
|
|
13
|
%
|
|
1,391
|
|
($ in millions)
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
2017
|
||||||||
Cost of sales
|
$
|
14,112
|
|
|
4
|
%
|
|
$
|
13,509
|
|
|
5
|
%
|
|
$
|
12,912
|
|
Selling, general and administrative
|
10,615
|
|
|
5
|
%
|
|
10,102
|
|
|
—
|
%
|
|
10,074
|
|
|||
Research and development
|
9,872
|
|
|
1
|
%
|
|
9,752
|
|
|
-6
|
%
|
|
10,339
|
|
|||
Restructuring costs
|
638
|
|
|
1
|
%
|
|
632
|
|
|
-19
|
%
|
|
776
|
|
|||
Other (income) expense, net
|
139
|
|
|
*
|
|
|
(402
|
)
|
|
-20
|
%
|
|
(500
|
)
|
|||
|
$
|
35,376
|
|
|
5
|
%
|
|
$
|
33,593
|
|
|
—
|
%
|
|
$
|
33,601
|
|
Segment Profits
|
|
|
|
|
|
||||||
($ in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Pharmaceutical segment profits
|
$
|
28,324
|
|
|
$
|
24,871
|
|
|
$
|
23,018
|
|
Animal Health segment profits
|
1,609
|
|
|
1,659
|
|
|
1,552
|
|
|||
Other non-reportable segment profits
|
(7
|
)
|
|
103
|
|
|
275
|
|
|||
Other
|
(18,462
|
)
|
|
(17,932
|
)
|
|
(18,324
|
)
|
|||
Income Before Taxes
|
$
|
11,464
|
|
|
$
|
8,701
|
|
|
$
|
6,521
|
|
($ in millions except per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||
Income before taxes as reported under GAAP
|
$
|
11,464
|
|
|
$
|
8,701
|
|
|
$
|
6,521
|
|
Increase (decrease) for excluded items:
|
|
|
|
|
|
||||||
Acquisition and divestiture-related costs
|
2,681
|
|
|
3,066
|
|
|
3,760
|
|
|||
Restructuring costs
|
927
|
|
|
658
|
|
|
927
|
|
|||
Other items:
|
|
|
|
|
|
||||||
Charge for the acquisition of Peloton
|
993
|
|
|
—
|
|
|
—
|
|
|||
Charge related to the formation of an oncology collaboration with Eisai
|
—
|
|
|
1,400
|
|
|
—
|
|
|||
Charge related to the termination of a collaboration with Samsung
|
—
|
|
|
423
|
|
|
—
|
|
|||
Charge for the acquisition of Viralytics
|
—
|
|
|
344
|
|
|
—
|
|
|||
Charge related to the formation of an oncology collaboration with AstraZeneca
|
—
|
|
|
—
|
|
|
2,350
|
|
|||
Other
|
55
|
|
|
(57
|
)
|
|
(16
|
)
|
|||
Non-GAAP income before taxes
|
16,120
|
|
|
14,535
|
|
|
13,542
|
|
|||
Taxes on income as reported under GAAP
|
1,687
|
|
|
2,508
|
|
|
4,103
|
|
|||
Estimated tax benefit on excluded items (1)
|
695
|
|
|
535
|
|
|
785
|
|
|||
Net tax charge related to the enactment of the TCJA and subsequent finalization of related treasury regulations (2)
|
(117
|
)
|
|
(160
|
)
|
|
(2,625
|
)
|
|||
Net tax benefit from the settlement of certain federal income tax matters
|
364
|
|
|
—
|
|
|
234
|
|
|||
Tax benefit from the reversal of tax reserves related to the divestiture of MCC
|
86
|
|
|
—
|
|
|
—
|
|
|||
Tax benefit related to the settlement of a state income tax matter
|
—
|
|
|
—
|
|
|
88
|
|
|||
Non-GAAP taxes on income
|
2,715
|
|
|
2,883
|
|
|
2,585
|
|
|||
Non-GAAP net income
|
13,405
|
|
|
11,652
|
|
|
10,957
|
|
|||
Less: Net (loss) income attributable to noncontrolling interests as reported under GAAP
|
(66
|
)
|
|
(27
|
)
|
|
24
|
|
|||
Acquisition and divestiture-related costs attributable to noncontrolling interests
|
(89
|
)
|
|
(58
|
)
|
|
—
|
|
|||
Non-GAAP net income attributable to noncontrolling interests
|
23
|
|
|
31
|
|
|
24
|
|
|||
Non-GAAP net income attributable to Merck & Co., Inc.
|
$
|
13,382
|
|
|
$
|
11,621
|
|
|
$
|
10,933
|
|
EPS assuming dilution as reported under GAAP
|
$
|
3.81
|
|
|
$
|
2.32
|
|
|
$
|
0.87
|
|
EPS difference
|
1.38
|
|
|
2.02
|
|
|
3.11
|
|
|||
Non-GAAP EPS assuming dilution
|
$
|
5.19
|
|
|
$
|
4.34
|
|
|
$
|
3.98
|
|
(1)
|
The estimated tax impact on the excluded items is determined by applying the statutory rate of the originating territory of the non-GAAP adjustments.
|
Selected Data
|
|
|
|
|
|
||||||
($ in millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Working capital
|
$
|
5,263
|
|
|
$
|
3,669
|
|
|
$
|
6,152
|
|
Total debt to total liabilities and equity
|
31.2
|
%
|
|
30.4
|
%
|
|
27.8
|
%
|
|||
Cash provided by operations to total debt
|
0.5:1
|
|
|
0.4:1
|
|
|
0.3:1
|
|
Payments Due by Period
|
|
|
|
|
|
|
|
|
|
||||||||||
($ in millions)
|
Total
|
|
2020
|
|
2021—2022
|
|
2023—2024
|
|
Thereafter
|
||||||||||
Purchase obligations (1)
|
$
|
3,167
|
|
|
$
|
1,097
|
|
|
$
|
1,108
|
|
|
$
|
421
|
|
|
$
|
541
|
|
Loans payable and current portion of long-term debt
|
3,612
|
|
|
3,612
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
22,779
|
|
|
—
|
|
|
4,515
|
|
|
3,058
|
|
|
15,206
|
|
|||||
Interest related to debt obligations
|
10,021
|
|
|
760
|
|
|
1,372
|
|
|
1,189
|
|
|
6,700
|
|
|||||
Unrecognized tax benefits (2)
|
49
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Transition tax related to the enactment of the TCJA (3)
|
3,397
|
|
|
390
|
|
|
781
|
|
|
1,181
|
|
|
1,045
|
|
|||||
Milestone payments related to collaborations (4)
|
400
|
|
|
400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Leases (5)
|
1,012
|
|
|
254
|
|
|
354
|
|
|
202
|
|
|
202
|
|
|||||
|
$
|
44,437
|
|
|
$
|
6,562
|
|
|
$
|
8,130
|
|
|
$
|
6,051
|
|
|
$
|
23,694
|
|
(1)
|
Includes future inventory purchases the Company has committed to in connection with certain divestitures.
|
(2)
|
As of December 31, 2019, the Company’s Consolidated Balance Sheet reflects liabilities for unrecognized tax benefits, interest and penalties of $1.5 billion, including $49 million reflected as a current liability. Due to the high degree of uncertainty regarding the timing of future cash outflows of liabilities for unrecognized tax benefits beyond one year, a reasonable estimate of the period of cash settlement for years beyond 2020 cannot be made.
|
(3)
|
In connection with the enactment of the TCJA, the Company is required to pay a one-time transition tax, which the Company has elected to pay over a period of eight years through 2025 as permitted under the TCJA (see Note 15 to the consolidated financial statements).
|
(4)
|
Reflects payments under collaborative agreements for sales-based milestones that were achieved in 2019 (and therefore deemed to be contractual obligations) but not paid until January 2020 (see Note 4 to the consolidated financial statements).
|
($ in millions)
|
2019
|
|||||||||
Debt Instrument
|
Par Value of Debt
|
|
Number of Interest Rate Swaps Held
|
|
Total Swap Notional Amount
|
|||||
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)
|
2019
|
|
2018
|
||||
Balance January 1
|
$
|
2,630
|
|
|
$
|
2,551
|
|
Current provision
|
11,999
|
|
|
10,837
|
|
||
Adjustments to prior years
|
(230
|
)
|
|
(117
|
)
|
||
Payments
|
(11,963
|
)
|
|
(10,641
|
)
|
||
Balance December 31
|
$
|
2,436
|
|
|
$
|
2,630
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
(a)
|
Financial Statements
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
46,840
|
|
|
$
|
42,294
|
|
|
$
|
40,122
|
|
Costs, Expenses and Other
|
|
|
|
|
|
||||||
Cost of sales
|
14,112
|
|
|
13,509
|
|
|
12,912
|
|
|||
Selling, general and administrative
|
10,615
|
|
|
10,102
|
|
|
10,074
|
|
|||
Research and development
|
9,872
|
|
|
9,752
|
|
|
10,339
|
|
|||
Restructuring costs
|
638
|
|
|
632
|
|
|
776
|
|
|||
Other (income) expense, net
|
139
|
|
|
(402
|
)
|
|
(500
|
)
|
|||
|
35,376
|
|
|
33,593
|
|
|
33,601
|
|
|||
Income Before Taxes
|
11,464
|
|
|
8,701
|
|
|
6,521
|
|
|||
Taxes on Income
|
1,687
|
|
|
2,508
|
|
|
4,103
|
|
|||
Net Income
|
9,777
|
|
|
6,193
|
|
|
2,418
|
|
|||
Less: Net (Loss) Income Attributable to Noncontrolling Interests
|
(66
|
)
|
|
(27
|
)
|
|
24
|
|
|||
Net Income Attributable to Merck & Co., Inc.
|
$
|
9,843
|
|
|
$
|
6,220
|
|
|
$
|
2,394
|
|
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders
|
$
|
3.84
|
|
|
$
|
2.34
|
|
|
$
|
0.88
|
|
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders
|
$
|
3.81
|
|
|
$
|
2.32
|
|
|
$
|
0.87
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net Income Attributable to Merck & Co., Inc.
|
$
|
9,843
|
|
|
$
|
6,220
|
|
|
$
|
2,394
|
|
Other Comprehensive (Loss) Income Net of Taxes:
|
|
|
|
|
|
||||||
Net unrealized (loss) gain on derivatives, net of reclassifications
|
(135
|
)
|
|
297
|
|
|
(446
|
)
|
|||
Net unrealized gain (loss) on investments, net of reclassifications
|
96
|
|
|
(10
|
)
|
|
(58
|
)
|
|||
Benefit plan net (loss) gain and prior service (cost) credit, net of amortization
|
(705
|
)
|
|
(425
|
)
|
|
419
|
|
|||
Cumulative translation adjustment
|
96
|
|
|
(223
|
)
|
|
401
|
|
|||
|
(648
|
)
|
|
(361
|
)
|
|
316
|
|
|||
Comprehensive Income Attributable to Merck & Co., Inc.
|
$
|
9,195
|
|
|
$
|
5,859
|
|
|
$
|
2,710
|
|
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,676
|
|
|
$
|
7,965
|
|
Short-term investments
|
774
|
|
|
899
|
|
||
Accounts receivable (net of allowance for doubtful accounts of $86 in 2019
and $119 in 2018)
|
6,778
|
|
|
7,071
|
|
||
Inventories (excludes inventories of $1,480 in 2019 and $1,417 in 2018
classified in Other assets - see Note 7)
|
5,978
|
|
|
5,440
|
|
||
Other current assets
|
4,277
|
|
|
4,500
|
|
||
Total current assets
|
27,483
|
|
|
25,875
|
|
||
Investments
|
1,469
|
|
|
6,233
|
|
||
Property, Plant and Equipment (at cost)
|
|
|
|
||||
Land
|
343
|
|
|
333
|
|
||
Buildings
|
11,989
|
|
|
11,486
|
|
||
Machinery, equipment and office furnishings
|
15,394
|
|
|
14,441
|
|
||
Construction in progress
|
5,013
|
|
|
3,355
|
|
||
|
32,739
|
|
|
29,615
|
|
||
Less: accumulated depreciation
|
17,686
|
|
|
16,324
|
|
||
|
15,053
|
|
|
13,291
|
|
||
Goodwill
|
19,425
|
|
|
18,253
|
|
||
Other Intangibles, Net
|
14,196
|
|
|
13,104
|
|
||
Other Assets
|
6,771
|
|
|
5,881
|
|
||
|
$
|
84,397
|
|
|
$
|
82,637
|
|
Liabilities and Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Loans payable and current portion of long-term debt
|
$
|
3,610
|
|
|
$
|
5,308
|
|
Trade accounts payable
|
3,738
|
|
|
3,318
|
|
||
Accrued and other current liabilities
|
12,549
|
|
|
10,151
|
|
||
Income taxes payable
|
736
|
|
|
1,971
|
|
||
Dividends payable
|
1,587
|
|
|
1,458
|
|
||
Total current liabilities
|
22,220
|
|
|
22,206
|
|
||
Long-Term Debt
|
22,736
|
|
|
19,806
|
|
||
Deferred Income Taxes
|
1,470
|
|
|
1,702
|
|
||
Other Noncurrent Liabilities
|
11,970
|
|
|
12,041
|
|
||
Merck & Co., Inc. Stockholders’ Equity
|
|
|
|
||||
Common stock, $0.50 par value
Authorized - 6,500,000,000 shares
Issued - 3,577,103,522 shares in 2019 and 2018
|
1,788
|
|
|
1,788
|
|
||
Other paid-in capital
|
39,660
|
|
|
38,808
|
|
||
Retained earnings
|
46,602
|
|
|
42,579
|
|
||
Accumulated other comprehensive loss
|
(6,193
|
)
|
|
(5,545
|
)
|
||
|
81,857
|
|
|
77,630
|
|
||
Less treasury stock, at cost:
1,038,087,496 shares in 2019 and 984,543,979 shares in 2018
|
55,950
|
|
|
50,929
|
|
||
Total Merck & Co., Inc. stockholders’ equity
|
25,907
|
|
|
26,701
|
|
||
Noncontrolling Interests
|
94
|
|
|
181
|
|
||
Total equity
|
26,001
|
|
|
26,882
|
|
||
|
$
|
84,397
|
|
|
$
|
82,637
|
|
|
Common
Stock
|
|
Other
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Non-
controlling
Interests
|
|
Total
|
||||||||||||||
Balance January 1, 2017
|
|
$1,788
|
|
|
$
|
39,939
|
|
|
$
|
44,133
|
|
|
$
|
(5,226
|
)
|
|
$
|
(40,546
|
)
|
|
$
|
220
|
|
|
$
|
40,308
|
|
Net income attributable to Merck & Co., Inc.
|
—
|
|
|
—
|
|
|
2,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,394
|
|
|||||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||||
Cash dividends declared on common stock ($1.89 per share)
|
—
|
|
|
—
|
|
|
(5,177
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,177
|
)
|
|||||||
Treasury stock shares purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,014
|
)
|
|
—
|
|
|
(4,014
|
)
|
|||||||
Acquisition of Vallée S.A.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|||||||
Distributions attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|||||||
Share-based compensation plans and other
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
766
|
|
|
—
|
|
|
729
|
|
|||||||
Balance December 31, 2017
|
1,788
|
|
|
39,902
|
|
|
41,350
|
|
|
(4,910
|
)
|
|
(43,794
|
)
|
|
233
|
|
|
34,569
|
|
|||||||
Net income attributable to Merck & Co., Inc.
|
—
|
|
|
—
|
|
|
6,220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,220
|
|
|||||||
Adoption of new accounting standards
|
—
|
|
|
—
|
|
|
322
|
|
|
(274
|
)
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||||
Other comprehensive loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(361
|
)
|
|
—
|
|
|
—
|
|
|
(361
|
)
|
|||||||
Cash dividends declared on common stock ($1.99 per share)
|
—
|
|
|
—
|
|
|
(5,313
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,313
|
)
|
|||||||
Treasury stock shares purchased
|
—
|
|
|
(1,000
|
)
|
|
—
|
|
|
—
|
|
|
(8,091
|
)
|
|
—
|
|
|
(9,091
|
)
|
|||||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
|||||||
Distributions attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
|||||||
Share-based compensation plans and other
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
956
|
|
|
—
|
|
|
862
|
|
|||||||
Balance December 31, 2018
|
1,788
|
|
|
38,808
|
|
|
42,579
|
|
|
(5,545
|
)
|
|
(50,929
|
)
|
|
181
|
|
|
26,882
|
|
|||||||
Net income attributable to Merck & Co., Inc.
|
—
|
|
|
—
|
|
|
9,843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,843
|
|
|||||||
Other comprehensive loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(648
|
)
|
|
—
|
|
|
—
|
|
|
(648
|
)
|
|||||||
Cash dividends declared on common stock ($2.26 per share)
|
—
|
|
|
—
|
|
|
(5,820
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,820
|
)
|
|||||||
Treasury stock shares purchased
|
—
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
(5,780
|
)
|
|
—
|
|
|
(4,780
|
)
|
|||||||
Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
(66
|
)
|
|||||||
Distributions attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
|||||||
Share-based compensation plans and other
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
759
|
|
|
—
|
|
|
611
|
|
|||||||
Balance December 31, 2019
|
$
|
1,788
|
|
|
$
|
39,660
|
|
|
$
|
46,602
|
|
|
$
|
(6,193
|
)
|
|
$
|
(55,950
|
)
|
|
$
|
94
|
|
|
$
|
26,001
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
9,777
|
|
|
$
|
6,193
|
|
|
$
|
2,418
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
3,652
|
|
|
4,519
|
|
|
4,676
|
|
|||
Intangible asset impairment charges
|
1,040
|
|
|
296
|
|
|
646
|
|
|||
Charge for the acquisition of Peloton Therapeutics, Inc.
|
993
|
|
|
—
|
|
|
—
|
|
|||
Charge for future payments related to collaboration license options
|
—
|
|
|
650
|
|
|
500
|
|
|||
Provisional charge for one-time transition tax related to the enactment of U.S. tax legislation
|
—
|
|
|
—
|
|
|
5,347
|
|
|||
Deferred income taxes
|
(556
|
)
|
|
(509
|
)
|
|
(2,621
|
)
|
|||
Share-based compensation
|
417
|
|
|
348
|
|
|
312
|
|
|||
Other
|
184
|
|
|
978
|
|
|
190
|
|
|||
Net changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
294
|
|
|
(418
|
)
|
|
297
|
|
|||
Inventories
|
(508
|
)
|
|
(911
|
)
|
|
(145
|
)
|
|||
Trade accounts payable
|
399
|
|
|
230
|
|
|
254
|
|
|||
Accrued and other current liabilities
|
376
|
|
|
(341
|
)
|
|
(922
|
)
|
|||
Income taxes payable
|
(2,359
|
)
|
|
827
|
|
|
(3,291
|
)
|
|||
Noncurrent liabilities
|
(237
|
)
|
|
(266
|
)
|
|
(123
|
)
|
|||
Other
|
(32
|
)
|
|
(674
|
)
|
|
(1,087
|
)
|
|||
Net Cash Provided by Operating Activities
|
13,440
|
|
|
10,922
|
|
|
6,451
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(3,473
|
)
|
|
(2,615
|
)
|
|
(1,888
|
)
|
|||
Purchases of securities and other investments
|
(3,202
|
)
|
|
(7,994
|
)
|
|
(10,739
|
)
|
|||
Proceeds from sales of securities and other investments
|
8,622
|
|
|
15,252
|
|
|
15,664
|
|
|||
Acquisition of Antelliq Corporation, net of cash acquired
|
(3,620
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of Peloton Therapeutics, Inc., net of cash acquired
|
(1,040
|
)
|
|
—
|
|
|
—
|
|
|||
Other acquisitions, net of cash acquired
|
(294
|
)
|
|
(431
|
)
|
|
(396
|
)
|
|||
Other
|
378
|
|
|
102
|
|
|
38
|
|
|||
Net Cash (Used in) Provided by Investing Activities
|
(2,629
|
)
|
|
4,314
|
|
|
2,679
|
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Net change in short-term borrowings
|
(3,710
|
)
|
|
5,124
|
|
|
(26
|
)
|
|||
Payments on debt
|
—
|
|
|
(4,287
|
)
|
|
(1,103
|
)
|
|||
Proceeds from issuance of debt
|
4,958
|
|
|
—
|
|
|
—
|
|
|||
Purchases of treasury stock
|
(4,780
|
)
|
|
(9,091
|
)
|
|
(4,014
|
)
|
|||
Dividends paid to stockholders
|
(5,695
|
)
|
|
(5,172
|
)
|
|
(5,167
|
)
|
|||
Proceeds from exercise of stock options
|
361
|
|
|
591
|
|
|
499
|
|
|||
Other
|
5
|
|
|
(325
|
)
|
|
(195
|
)
|
|||
Net Cash Used in Financing Activities
|
(8,861
|
)
|
|
(13,160
|
)
|
|
(10,006
|
)
|
|||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
17
|
|
|
(205
|
)
|
|
457
|
|
|||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
|
1,967
|
|
|
1,871
|
|
|
(419
|
)
|
|||
Cash, Cash Equivalents and Restricted Cash at Beginning of Year (includes $2 million of restricted cash at January 1, 2019 included in Other Assets)
|
7,967
|
|
|
6,096
|
|
|
6,515
|
|
|||
Cash, Cash Equivalents and Restricted Cash at End of Year (includes $258 million of restricted cash at December 31, 2019 included in Other Assets - see Note 6)
|
$
|
9,934
|
|
|
$
|
7,967
|
|
|
$
|
6,096
|
|
($ in millions)
|
April 1, 2019
|
||
Cash and cash equivalents
|
$
|
31
|
|
Accounts receivable
|
73
|
|
|
Inventories
|
95
|
|
|
Property, plant and equipment
|
62
|
|
|
Identifiable intangible assets (useful lives ranging from 18-24 years) (1)
|
2,689
|
|
|
Deferred income tax liabilities
|
(520
|
)
|
|
Other assets and liabilities, net
|
(81
|
)
|
|
Total identifiable net assets
|
2,349
|
|
|
Goodwill (2)
|
1,302
|
|
|
Consideration transferred
|
$
|
3,651
|
|
(1)
|
The estimated fair values of identifiable intangible assets relate primarily to trade names and were determined using an income approach. The future net cash flows were discounted to present value utilizing a discount rate of 11.5%. Actual cash flows are likely to be different than those assumed.
|
(2)
|
The goodwill recognized is largely attributable to anticipated synergies expected to arise after the acquisition and was allocated to the Animal Health segment. The goodwill is not deductible for tax purposes.
|
Years Ended December 31
|
2019
|
|
2018
|
|
|
2017
|
|||||
Alliance revenue
|
$
|
444
|
|
|
$
|
187
|
|
|
$
|
20
|
|
|
|
|
|
|
|
||||||
Cost of sales (1)
|
148
|
|
|
93
|
|
|
4
|
|
|||
Selling, general and administrative
|
138
|
|
|
48
|
|
|
1
|
|
|||
Research and development (2)
|
168
|
|
|
152
|
|
|
2,419
|
|
|||
|
|
|
|
|
|
||||||
December 31
|
2019
|
|
2018
|
|
|
||||||
Receivables from AstraZeneca included in Other current assets
|
$
|
128
|
|
|
$
|
52
|
|
|
|
||
Payables to AstraZeneca included in Accrued and other current liabilities (3)
|
577
|
|
|
405
|
|
|
|
||||
Payables to AstraZeneca included Other Noncurrent Liabilities (3)
|
—
|
|
|
250
|
|
|
|
Years Ended December 31
|
2019
|
|
2018
|
||||
Alliance revenue
|
$
|
404
|
|
|
$
|
149
|
|
|
|
|
|
||||
Cost of sales (1)
|
206
|
|
|
39
|
|
||
Selling, general and administrative
|
80
|
|
|
13
|
|
||
Research and development (2)
|
189
|
|
|
1,489
|
|
||
|
|
|
|
||||
December 31
|
2019
|
|
2018
|
||||
Receivables from Eisai included in Other current assets
|
$
|
150
|
|
|
$
|
71
|
|
Payables to Eisai included in Accrued and other current liabilities (3)
|
700
|
|
|
375
|
|
||
Payables to Eisai included in Other Noncurrent Liabilities (3)
|
525
|
|
|
543
|
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Net product sales recorded by Merck
|
$
|
215
|
|
|
$
|
190
|
|
|
$
|
149
|
|
Merck’s profit share from sales in Bayer’s marketing territories
|
204
|
|
|
139
|
|
|
151
|
|
|||
Total sales
|
419
|
|
|
329
|
|
|
300
|
|
|||
|
|
|
|
|
|
||||||
Cost of sales (1)
|
113
|
|
|
216
|
|
|
99
|
|
|||
Selling, general and administrative
|
41
|
|
|
35
|
|
|
27
|
|
|||
Research and development
|
126
|
|
|
127
|
|
|
101
|
|
|||
|
|
|
|
|
|
||||||
December 31
|
2019
|
|
2018
|
|
|
|
|||||
Receivables from Bayer included in Other current assets
|
$
|
49
|
|
|
$
|
32
|
|
|
|
||
Payables to Bayer included in Other Noncurrent Liabilities (2)
|
375
|
|
|
375
|
|
|
|
|
Separation
Costs
|
|
Accelerated
Depreciation
|
|
Other
|
|
Total
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
—
|
|
|
$
|
198
|
|
|
$
|
53
|
|
|
$
|
251
|
|
Selling, general and administrative
|
—
|
|
|
33
|
|
|
1
|
|
|
34
|
|
||||
Research and development
|
—
|
|
|
2
|
|
|
2
|
|
|
4
|
|
||||
Restructuring costs
|
572
|
|
|
—
|
|
|
66
|
|
|
638
|
|
||||
|
$
|
572
|
|
|
$
|
233
|
|
|
$
|
122
|
|
|
$
|
927
|
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
21
|
|
Selling, general and administrative
|
—
|
|
|
2
|
|
|
1
|
|
|
3
|
|
||||
Research and development
|
—
|
|
|
(13
|
)
|
|
15
|
|
|
2
|
|
||||
Restructuring costs
|
473
|
|
|
—
|
|
|
159
|
|
|
632
|
|
||||
|
$
|
473
|
|
|
$
|
(1
|
)
|
|
$
|
186
|
|
|
$
|
658
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
86
|
|
|
$
|
138
|
|
Selling, general and administrative
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Research and development
|
—
|
|
|
6
|
|
|
5
|
|
|
11
|
|
||||
Restructuring costs
|
552
|
|
|
—
|
|
|
224
|
|
|
776
|
|
||||
|
$
|
552
|
|
|
$
|
60
|
|
|
$
|
315
|
|
|
$
|
927
|
|
|
Separation
Costs
|
|
Accelerated
Depreciation
|
|
Other
|
|
Total
|
||||||||
Restructuring reserves January 1, 2018
|
$
|
619
|
|
|
$
|
—
|
|
|
$
|
128
|
|
|
$
|
747
|
|
Expenses
|
473
|
|
|
(1
|
)
|
|
186
|
|
|
658
|
|
||||
(Payments) receipts, net
|
(649
|
)
|
|
—
|
|
|
(238
|
)
|
|
(887
|
)
|
||||
Non-cash activity
|
—
|
|
|
1
|
|
|
15
|
|
|
16
|
|
||||
Restructuring reserves December 31, 2018
|
443
|
|
|
—
|
|
|
91
|
|
|
534
|
|
||||
Expenses
|
572
|
|
|
233
|
|
|
122
|
|
|
927
|
|
||||
(Payments) receipts, net
|
(325
|
)
|
|
—
|
|
|
(136
|
)
|
|
(461
|
)
|
||||
Non-cash activity
|
—
|
|
|
(233
|
)
|
|
(8
|
)
|
|
(241
|
)
|
||||
Restructuring reserves December 31, 2019 (1)
|
$
|
690
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
759
|
|
(1)
|
The remaining cash outlays are expected to be substantially completed by the end of 2023.
|
|
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
|
|
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
|
||||||||||||||||||||
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Net Investment Hedging Relationships
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
$
|
(10
|
)
|
|
$
|
(18
|
)
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
Euro-denominated notes
|
(75
|
)
|
|
(183
|
)
|
|
520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2019
|
|||||||||
Debt Instrument
|
Par Value of Debt
|
|
Number of Interest Rate Swaps Held
|
|
Total Swap Notional Amount
|
|||||
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
|
|
|
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
|
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
|
Other Assets
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
3,400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
Accrued and other current liabilities
|
|
—
|
|
|
1
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate swap contracts
|
Other Noncurrent Liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81
|
|
|
4,650
|
|
||||||
Foreign exchange contracts
|
Other current assets
|
|
152
|
|
|
—
|
|
|
6,117
|
|
|
263
|
|
|
—
|
|
|
6,222
|
|
||||||
Foreign exchange contracts
|
Other Assets
|
|
55
|
|
|
—
|
|
|
2,160
|
|
|
75
|
|
|
—
|
|
|
2,655
|
|
||||||
Foreign exchange contracts
|
Accrued and other current liabilities
|
|
—
|
|
|
22
|
|
|
1,748
|
|
|
—
|
|
|
7
|
|
|
774
|
|
||||||
Foreign exchange contracts
|
Other Noncurrent Liabilities
|
|
—
|
|
|
1
|
|
|
53
|
|
|
—
|
|
|
1
|
|
|
89
|
|
||||||
|
|
|
$
|
222
|
|
|
$
|
24
|
|
|
$
|
14,728
|
|
|
$
|
338
|
|
|
$
|
89
|
|
|
$
|
14,390
|
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
7,245
|
|
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
5,430
|
|
Foreign exchange contracts
|
Accrued and other current liabilities
|
|
—
|
|
|
73
|
|
|
8,693
|
|
|
—
|
|
|
71
|
|
|
9,922
|
|
||||||
|
|
|
$
|
66
|
|
|
$
|
73
|
|
|
$
|
15,938
|
|
|
$
|
116
|
|
|
$
|
71
|
|
|
$
|
15,352
|
|
|
|
|
$
|
288
|
|
|
$
|
97
|
|
|
$
|
30,666
|
|
|
$
|
454
|
|
|
$
|
160
|
|
|
$
|
29,742
|
|
|
2019
|
|
2018
|
||||||||||||
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||
Gross amounts recognized in the consolidated balance sheet
|
$
|
288
|
|
|
$
|
97
|
|
|
$
|
454
|
|
|
$
|
160
|
|
Gross amounts subject to offset in master netting arrangements not offset in the consolidated balance sheet
|
(84
|
)
|
|
(84
|
)
|
|
(121
|
)
|
|
(121
|
)
|
||||
Cash collateral received
|
(34
|
)
|
|
—
|
|
|
(107
|
)
|
|
—
|
|
||||
Net amounts
|
$
|
170
|
|
|
$
|
13
|
|
|
$
|
226
|
|
|
$
|
39
|
|
|
Sales
|
|
Other (income) expense, net (1)
|
|
Other comprehensive income (loss)
|
||||||||||||||||||||||||||||
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||
Financial Statement Line Items in which Effects of Fair Value or Cash Flow Hedges are Recorded
|
$
|
46,840
|
|
|
$
|
42,294
|
|
|
$
|
40,122
|
|
|
$
|
139
|
|
|
(402
|
)
|
|
(500
|
)
|
|
$
|
(648
|
)
|
|
$
|
(361
|
)
|
|
$
|
316
|
|
(Gain) loss on fair value hedging relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swap contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Hedged items
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
(27
|
)
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Derivatives designated as hedging instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
50
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Impact of cash flow hedging relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amount of gain (loss) recognized in OCI on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
228
|
|
|
(562
|
)
|
|||||||
(Decrease) increase in Sales as a result of AOCI reclassifications
|
255
|
|
|
(160
|
)
|
|
138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
160
|
|
|
(138
|
)
|
|||||||
Interest rate contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amount of gain recognized in Other (income) expense, net on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Amount of loss recognized in OCI on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
|
|
Amount of Derivative Pretax (Gain) Loss Recognized in Income
|
||||||||||
Years Ended December 31
|
Income Statement Caption
|
|
2019
|
|
2018
|
|
2017
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts (1)
|
Other (income) expense, net
|
|
$
|
174
|
|
|
$
|
(260
|
)
|
|
$
|
110
|
|
Foreign exchange contracts (2)
|
Sales
|
|
1
|
|
|
(8
|
)
|
|
(3
|
)
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
||||||||||||||||||||
|
Gains
|
|
Losses
|
|
Gains
|
|
Losses
|
|
|||||||||||||||||||||||
Commercial paper
|
$
|
668
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
668
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes and bonds
|
608
|
|
|
13
|
|
|
—
|
|
|
621
|
|
|
4,985
|
|
|
3
|
|
|
(68
|
)
|
|
4,920
|
|
||||||||
U.S. government and agency securities
|
266
|
|
|
3
|
|
|
—
|
|
|
269
|
|
|
895
|
|
|
2
|
|
|
(5
|
)
|
|
892
|
|
||||||||
Asset-backed securities
|
226
|
|
|
1
|
|
|
—
|
|
|
227
|
|
|
1,285
|
|
|
1
|
|
|
(11
|
)
|
|
1,275
|
|
||||||||
Foreign government bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|
—
|
|
|
(1
|
)
|
|
166
|
|
||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||||
Total debt securities
|
1,768
|
|
|
17
|
|
|
—
|
|
|
1,785
|
|
|
7,340
|
|
|
6
|
|
|
(85
|
)
|
|
7,261
|
|
||||||||
Publicly traded equity securities (1)
|
|
|
|
|
|
|
838
|
|
|
|
|
|
|
|
|
456
|
|
||||||||||||||
Total debt and publicly traded equity securities
|
|
|
|
|
|
|
|
|
|
$
|
2,623
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,717
|
|
|
Fair Value Measurements Using
|
|
Fair Value Measurements Using
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
668
|
|
|
$
|
—
|
|
|
$
|
668
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes and bonds
|
—
|
|
|
621
|
|
|
—
|
|
|
621
|
|
|
—
|
|
|
4,835
|
|
|
—
|
|
|
4,835
|
|
||||||||
Asset-backed securities (1)
|
—
|
|
|
227
|
|
|
—
|
|
|
227
|
|
|
—
|
|
|
1,253
|
|
|
—
|
|
|
1,253
|
|
||||||||
U.S. government and agency securities
|
—
|
|
|
209
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
731
|
|
|
—
|
|
|
731
|
|
||||||||
Foreign government bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
||||||||
Publicly traded equity securities
|
518
|
|
|
—
|
|
|
—
|
|
|
518
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
147
|
|
||||||||
|
518
|
|
|
1,725
|
|
|
—
|
|
|
2,243
|
|
|
147
|
|
|
6,985
|
|
|
—
|
|
|
7,132
|
|
||||||||
Other assets (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government and agency securities
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
55
|
|
|
106
|
|
|
—
|
|
|
161
|
|
||||||||
Corporate notes and bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
85
|
|
||||||||
Asset-backed securities (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Publicly traded equity securities
|
320
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
309
|
|
|
—
|
|
|
—
|
|
|
309
|
|
||||||||
|
380
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|
364
|
|
|
221
|
|
|
—
|
|
|
585
|
|
||||||||
Derivative assets (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward exchange contracts
|
—
|
|
|
169
|
|
|
—
|
|
|
169
|
|
|
—
|
|
|
241
|
|
|
—
|
|
|
241
|
|
||||||||
Purchased currency options
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
213
|
|
|
—
|
|
|
213
|
|
||||||||
Interest rate swaps
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
—
|
|
|
288
|
|
|
—
|
|
|
288
|
|
|
—
|
|
|
454
|
|
|
—
|
|
|
454
|
|
||||||||
Total assets
|
$
|
898
|
|
|
$
|
2,013
|
|
|
$
|
—
|
|
|
$
|
2,911
|
|
|
$
|
511
|
|
|
$
|
7,660
|
|
|
$
|
—
|
|
|
$
|
8,171
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
767
|
|
|
$
|
767
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
788
|
|
|
$
|
788
|
|
Derivative liabilities (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forward exchange contracts
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||||
Interest rate swaps
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
81
|
|
||||||||
Written currency options
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||||
|
—
|
|
|
97
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
97
|
|
|
$
|
767
|
|
|
$
|
864
|
|
|
$
|
—
|
|
|
$
|
160
|
|
|
$
|
788
|
|
|
$
|
948
|
|
(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 auto loan, credit card and student loan receivables, with weighted-average lives of primarily 5 years or less.
|
(2)
|
Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
|
(3)
|
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.
|
|
2019
|
|
2018
|
||||
Fair value January 1
|
$
|
788
|
|
|
$
|
935
|
|
Changes in estimated fair value (1)
|
64
|
|
|
89
|
|
||
Additions
|
—
|
|
|
8
|
|
||
Payments
|
(85
|
)
|
|
(244
|
)
|
||
Fair value December 31 (2)(3)
|
$
|
767
|
|
|
$
|
788
|
|
|
2019
|
|
2018
|
||||
Finished goods
|
$
|
1,772
|
|
|
$
|
1,658
|
|
Raw materials and work in process
|
5,650
|
|
|
5,004
|
|
||
Supplies
|
207
|
|
|
194
|
|
||
Total (approximates current cost)
|
7,629
|
|
|
6,856
|
|
||
(Decrease) increase to LIFO cost
|
(171
|
)
|
|
1
|
|
||
|
$
|
7,458
|
|
|
$
|
6,857
|
|
Recognized as:
|
|
|
|
||||
Inventories
|
$
|
5,978
|
|
|
$
|
5,440
|
|
Other assets
|
1,480
|
|
|
1,417
|
|
|
Pharmaceutical
|
|
Animal Health
|
|
All Other
|
|
Total
|
||||||||
Balance January 1, 2018
|
$
|
16,066
|
|
|
$
|
1,877
|
|
|
$
|
341
|
|
|
$
|
18,284
|
|
Acquisitions
|
—
|
|
|
17
|
|
|
24
|
|
|
41
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
(144
|
)
|
||||
Other (1)
|
96
|
|
|
(24
|
)
|
|
—
|
|
|
72
|
|
||||
Balance December 31, 2018 (2)
|
16,162
|
|
|
1,870
|
|
|
221
|
|
|
18,253
|
|
||||
Acquisitions
|
19
|
|
|
1,322
|
|
|
—
|
|
|
1,341
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
(162
|
)
|
|
(162
|
)
|
||||
Other (1)
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||
Balance December 31, 2019 (2)
|
$
|
16,181
|
|
|
$
|
3,192
|
|
|
$
|
52
|
|
|
$
|
19,425
|
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Products and product rights
|
$
|
45,947
|
|
|
$
|
38,852
|
|
|
$
|
7,095
|
|
|
$
|
46,615
|
|
|
$
|
37,585
|
|
|
$
|
9,030
|
|
Licenses
|
3,185
|
|
|
824
|
|
|
2,361
|
|
|
2,081
|
|
|
408
|
|
|
1,673
|
|
||||||
IPR&D
|
1,032
|
|
|
—
|
|
|
1,032
|
|
|
1,064
|
|
|
—
|
|
|
1,064
|
|
||||||
Trade names
|
2,899
|
|
|
217
|
|
|
2,682
|
|
|
209
|
|
|
107
|
|
|
102
|
|
||||||
Other
|
2,261
|
|
|
1,235
|
|
|
1,026
|
|
|
2,403
|
|
|
1,168
|
|
|
1,235
|
|
||||||
|
$
|
55,324
|
|
|
$
|
41,128
|
|
|
$
|
14,196
|
|
|
$
|
52,372
|
|
|
$
|
39,268
|
|
|
$
|
13,104
|
|
|
2019
|
|
2018
|
||||
2.75% notes due 2025
|
$
|
2,492
|
|
|
$
|
2,490
|
|
3.70% notes due 2045
|
1,975
|
|
|
1,974
|
|
||
2.80% notes due 2023
|
1,747
|
|
|
1,745
|
|
||
3.40% notes due 2029
|
1,732
|
|
|
—
|
|
||
4.00% notes due 2049
|
1,468
|
|
|
—
|
|
||
2.35% notes due 2022
|
1,248
|
|
|
1,214
|
|
||
4.15% notes due 2043
|
1,238
|
|
|
1,237
|
|
||
3.875% notes due 2021
|
1,151
|
|
|
1,132
|
|
||
1.125% euro-denominated notes due 2021
|
1,113
|
|
|
1,134
|
|
||
1.875% euro-denominated notes due 2026
|
1,107
|
|
|
1,127
|
|
||
2.40% notes due 2022
|
1,010
|
|
|
983
|
|
||
3.90% notes due 2039
|
982
|
|
|
—
|
|
||
2.90% notes due 2024
|
745
|
|
|
—
|
|
||
6.50% notes due 2033
|
722
|
|
|
726
|
|
||
0.50% euro-denominated notes due 2024
|
555
|
|
|
565
|
|
||
1.375% euro-denominated notes due 2036
|
551
|
|
|
561
|
|
||
2.50% euro-denominated notes due 2034
|
550
|
|
|
560
|
|
||
3.60% notes due 2042
|
490
|
|
|
490
|
|
||
6.55% notes due 2037
|
412
|
|
|
414
|
|
||
5.75% notes due 2036
|
338
|
|
|
338
|
|
||
5.95% debentures due 2028
|
306
|
|
|
306
|
|
||
5.85% notes due 2039
|
271
|
|
|
270
|
|
||
6.40% debentures due 2028
|
250
|
|
|
250
|
|
||
6.30% debentures due 2026
|
135
|
|
|
135
|
|
||
1.85% notes due 2020
|
—
|
|
|
1,231
|
|
||
Floating-rate notes due 2020
|
—
|
|
|
699
|
|
||
Other
|
148
|
|
|
225
|
|
||
|
$
|
22,736
|
|
|
$
|
19,806
|
|
December 31
|
2019
|
||
Assets
|
|
||
Other Assets (1)
|
$
|
1,073
|
|
Liabilities
|
|
||
Accrued and other current liabilities
|
236
|
|
|
Other Noncurrent Liabilities
|
768
|
|
|
|
$
|
1,004
|
|
Weighted-average remaining lease term (years)
|
7.4
|
|
|
Weighted-average discount rate
|
3.2
|
%
|
2020
|
$
|
264
|
|
2021
|
200
|
|
|
2022
|
168
|
|
|
2023
|
113
|
|
|
2024
|
89
|
|
|
Thereafter
|
297
|
|
|
Total lease payments
|
1,131
|
|
|
Less: Imputed interest
|
127
|
|
|
|
$
|
1,004
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
Common
Stock
|
|
Treasury
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
||||||
Balance January 1
|
3,577
|
|
|
985
|
|
|
3,577
|
|
|
880
|
|
|
3,577
|
|
|
828
|
|
Purchases of treasury stock
|
—
|
|
|
66
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
67
|
|
Issuances (1)
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(15
|
)
|
Balance December 31
|
3,577
|
|
|
1,038
|
|
|
3,577
|
|
|
985
|
|
|
3,577
|
|
|
880
|
|
(1)
|
Issuances primarily reflect activity under share-based compensation plans.
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
|||
Expected dividend yield
|
3.2
|
%
|
|
3.4
|
%
|
|
3.6
|
%
|
Risk-free interest rate
|
2.4
|
%
|
|
2.9
|
%
|
|
2.0
|
%
|
Expected volatility
|
18.7
|
%
|
|
19.1
|
%
|
|
17.8
|
%
|
Expected life (years)
|
5.9
|
|
|
6.1
|
|
|
6.1
|
|
|
Number
of Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding January 1, 2019
|
23,807
|
|
|
$
|
51.89
|
|
|
|
|
|
||
Granted
|
2,796
|
|
|
80.05
|
|
|
|
|
|
|||
Exercised
|
(8,119
|
)
|
|
44.48
|
|
|
|
|
|
|||
Forfeited
|
(616
|
)
|
|
45.48
|
|
|
|
|
|
|||
Outstanding December 31, 2019
|
17,868
|
|
|
$
|
59.88
|
|
|
6.48
|
|
$
|
555
|
|
Exercisable December 31, 2019
|
11,837
|
|
|
$
|
55.40
|
|
|
5.45
|
|
$
|
421
|
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Total intrinsic value of stock options exercised
|
$
|
295
|
|
|
$
|
348
|
|
|
$
|
236
|
|
Fair value of stock options vested
|
27
|
|
|
29
|
|
|
30
|
|
|||
Cash received from the exercise of stock options
|
361
|
|
|
591
|
|
|
499
|
|
|
|
RSUs
|
|
PSUs
|
||||||||||
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Number
of Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Nonvested January 1, 2019
|
|
16,128
|
|
|
$
|
58.85
|
|
|
2,039
|
|
|
$
|
59.42
|
|
Granted
|
|
4,811
|
|
|
80.08
|
|
|
763
|
|
|
83.90
|
|
||
Vested
|
|
(6,594
|
)
|
|
55.70
|
|
|
(748
|
)
|
|
57.87
|
|
||
Forfeited
|
|
(818
|
)
|
|
64.75
|
|
|
(82
|
)
|
|
66.68
|
|
||
Nonvested December 31, 2019
|
|
13,527
|
|
|
$
|
67.58
|
|
|
1,972
|
|
|
$
|
69.18
|
|
|
Pension Benefits
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
Other Postretirement Benefits
|
||||||||||||||||||||||||||||||
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
Service cost
|
$
|
293
|
|
|
$
|
326
|
|
|
$
|
312
|
|
|
$
|
238
|
|
|
$
|
238
|
|
|
$
|
252
|
|
|
$
|
48
|
|
|
$
|
57
|
|
|
$
|
57
|
|
Interest cost
|
458
|
|
|
432
|
|
|
454
|
|
|
177
|
|
|
178
|
|
|
172
|
|
|
69
|
|
|
69
|
|
|
81
|
|
|||||||||
Expected return on plan assets
|
(817
|
)
|
|
(851
|
)
|
|
(862
|
)
|
|
(426
|
)
|
|
(431
|
)
|
|
(393
|
)
|
|
(72
|
)
|
|
(83
|
)
|
|
(78
|
)
|
|||||||||
Amortization of unrecognized prior service cost
|
(49
|
)
|
|
(50
|
)
|
|
(53
|
)
|
|
(12
|
)
|
|
(13
|
)
|
|
(11
|
)
|
|
(78
|
)
|
|
(84
|
)
|
|
(98
|
)
|
|||||||||
Net loss amortization
|
151
|
|
|
232
|
|
|
180
|
|
|
64
|
|
|
84
|
|
|
98
|
|
|
(10
|
)
|
|
1
|
|
|
1
|
|
|||||||||
Termination benefits
|
31
|
|
|
19
|
|
|
44
|
|
|
8
|
|
|
2
|
|
|
4
|
|
|
5
|
|
|
3
|
|
|
8
|
|
|||||||||
Curtailments
|
14
|
|
|
10
|
|
|
3
|
|
|
6
|
|
|
1
|
|
|
(4
|
)
|
|
(11
|
)
|
|
(8
|
)
|
|
(31
|
)
|
|||||||||
Settlements
|
—
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|
13
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net periodic benefit cost (credit)
|
$
|
81
|
|
|
$
|
123
|
|
|
$
|
78
|
|
|
$
|
56
|
|
|
$
|
72
|
|
|
$
|
123
|
|
|
$
|
(49
|
)
|
|
$
|
(45
|
)
|
|
$
|
(60
|
)
|
|
Pension Benefits
|
|
Other
Postretirement
Benefits
|
||||||||||||||||||||
|
U.S.
|
|
International
|
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Fair value of plan assets January 1
|
$
|
9,648
|
|
|
$
|
10,896
|
|
|
$
|
8,580
|
|
|
$
|
9,339
|
|
|
$
|
968
|
|
|
$
|
1,114
|
|
Actual return on plan assets
|
2,165
|
|
|
(810
|
)
|
|
1,505
|
|
|
(289
|
)
|
|
203
|
|
|
(72
|
)
|
||||||
Company contributions
|
130
|
|
|
378
|
|
|
262
|
|
|
167
|
|
|
14
|
|
|
6
|
|
||||||
Effects of exchange rate changes
|
—
|
|
|
—
|
|
|
31
|
|
|
(352
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(582
|
)
|
|
(772
|
)
|
|
(230
|
)
|
|
(202
|
)
|
|
(104
|
)
|
|
(80
|
)
|
||||||
Settlements
|
—
|
|
|
(44
|
)
|
|
(12
|
)
|
|
(106
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
27
|
|
|
23
|
|
|
21
|
|
|
—
|
|
||||||
Fair value of plan assets December 31
|
$
|
11,361
|
|
|
$
|
9,648
|
|
|
$
|
10,163
|
|
|
$
|
8,580
|
|
|
$
|
1,102
|
|
|
$
|
968
|
|
Benefit obligation January 1
|
$
|
10,620
|
|
|
$
|
11,904
|
|
|
$
|
9,083
|
|
|
$
|
9,483
|
|
|
$
|
1,615
|
|
|
$
|
1,922
|
|
Service cost
|
293
|
|
|
326
|
|
|
238
|
|
|
238
|
|
|
48
|
|
|
57
|
|
||||||
Interest cost
|
458
|
|
|
432
|
|
|
177
|
|
|
178
|
|
|
69
|
|
|
69
|
|
||||||
Actuarial losses (gains) (1)
|
2,165
|
|
|
(1,258
|
)
|
|
1,313
|
|
|
(154
|
)
|
|
21
|
|
|
(341
|
)
|
||||||
Benefits paid
|
(582
|
)
|
|
(772
|
)
|
|
(230
|
)
|
|
(202
|
)
|
|
(104
|
)
|
|
(80
|
)
|
||||||
Effects of exchange rate changes
|
—
|
|
|
—
|
|
|
4
|
|
|
(387
|
)
|
|
1
|
|
|
(6
|
)
|
||||||
Plan amendments
|
—
|
|
|
—
|
|
|
1
|
|
|
10
|
|
|
—
|
|
|
(9
|
)
|
||||||
Curtailments
|
18
|
|
|
13
|
|
|
3
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Termination benefits
|
31
|
|
|
19
|
|
|
8
|
|
|
2
|
|
|
5
|
|
|
3
|
|
||||||
Settlements
|
—
|
|
|
(44
|
)
|
|
(12
|
)
|
|
(106
|
)
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
27
|
|
|
23
|
|
|
18
|
|
|
—
|
|
||||||
Benefit obligation December 31
|
$
|
13,003
|
|
|
$
|
10,620
|
|
|
$
|
10,612
|
|
|
$
|
9,083
|
|
|
$
|
1,673
|
|
|
$
|
1,615
|
|
Funded status December 31
|
$
|
(1,642
|
)
|
|
$
|
(972
|
)
|
|
$
|
(449
|
)
|
|
$
|
(503
|
)
|
|
$
|
(571
|
)
|
|
$
|
(647
|
)
|
Recognized as:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
837
|
|
|
$
|
659
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued and other current liabilities
|
(92
|
)
|
|
(47
|
)
|
|
(18
|
)
|
|
(14
|
)
|
|
(10
|
)
|
|
(10
|
)
|
||||||
Other Noncurrent Liabilities
|
(1,550
|
)
|
|
(925
|
)
|
|
(1,268
|
)
|
|
(1,148
|
)
|
|
(561
|
)
|
|
(637
|
)
|
|
U.S.
|
|
International
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Pension plans with a projected benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
13,003
|
|
|
$
|
10,620
|
|
|
$
|
7,421
|
|
|
$
|
6,251
|
|
Fair value of plan assets
|
11,361
|
|
|
9,648
|
|
|
6,135
|
|
|
5,089
|
|
||||
Pension plans with an accumulated benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
$
|
12,009
|
|
|
$
|
9,702
|
|
|
$
|
2,476
|
|
|
$
|
5,936
|
|
Fair value of plan assets
|
10,484
|
|
|
8,966
|
|
|
1,501
|
|
|
5,071
|
|
|
Fair Value Measurements Using
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV (1)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV (1)
|
|
Total
|
||||||||||||||||||||
|
2019
|
|
|
|
|
|
2018
|
|
|
|
|
||||||||||||||||||||||||||||
U.S. Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
236
|
|
|
$
|
239
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
182
|
|
|
$
|
222
|
|
Investment funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Developed markets equities
|
205
|
|
|
—
|
|
|
—
|
|
|
3,542
|
|
|
3,747
|
|
|
169
|
|
|
—
|
|
|
—
|
|
|
3,021
|
|
|
3,190
|
|
||||||||||
Emerging markets equities
|
165
|
|
|
—
|
|
|
—
|
|
|
723
|
|
|
888
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
720
|
|
|
841
|
|
||||||||||
Government and agency obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
161
|
|
||||||||||
Corporate obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
||||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Developed markets
|
2,451
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,451
|
|
|
2,172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,172
|
|
||||||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||||||
Government and agency obligations
|
—
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
|
2,094
|
|
|
—
|
|
|
1,509
|
|
|
—
|
|
|
—
|
|
|
1,509
|
|
||||||||||
Corporate obligations
|
—
|
|
|
1,582
|
|
|
—
|
|
|
—
|
|
|
1,582
|
|
|
—
|
|
|
1,246
|
|
|
—
|
|
|
—
|
|
|
1,246
|
|
||||||||||
Mortgage and asset-backed securities
|
—
|
|
|
178
|
|
|
—
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
262
|
|
|
—
|
|
|
—
|
|
|
262
|
|
||||||||||
Other investments
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||||||
Plan assets at fair value
|
$
|
2,824
|
|
|
$
|
3,854
|
|
|
$
|
9
|
|
|
$
|
4,674
|
|
|
$
|
11,361
|
|
|
$
|
2,502
|
|
|
$
|
3,017
|
|
|
$
|
13
|
|
|
$
|
4,116
|
|
|
$
|
9,648
|
|
International Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
70
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
86
|
|
|
$
|
50
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
69
|
|
Investment funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Developed markets equities
|
546
|
|
|
3,761
|
|
|
—
|
|
|
96
|
|
|
4,403
|
|
|
461
|
|
|
3,071
|
|
|
—
|
|
|
75
|
|
|
3,607
|
|
||||||||||
Government and agency obligations
|
462
|
|
|
2,534
|
|
|
—
|
|
|
207
|
|
|
3,203
|
|
|
372
|
|
|
2,082
|
|
|
—
|
|
|
180
|
|
|
2,634
|
|
||||||||||
Emerging markets equities
|
66
|
|
|
96
|
|
|
—
|
|
|
90
|
|
|
252
|
|
|
56
|
|
|
112
|
|
|
—
|
|
|
83
|
|
|
251
|
|
||||||||||
Corporate obligations
|
5
|
|
|
11
|
|
|
—
|
|
|
109
|
|
|
125
|
|
|
4
|
|
|
7
|
|
|
—
|
|
|
94
|
|
|
105
|
|
||||||||||
Fixed income obligations
|
9
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
7
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||||||
Real estate
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Developed markets
|
565
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
565
|
|
|
544
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
544
|
|
||||||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Government and agency obligations
|
3
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
379
|
|
|
2
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
293
|
|
||||||||||
Corporate obligations
|
1
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|
1
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
114
|
|
||||||||||
Mortgage and asset-backed securities
|
—
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||||||||
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Insurance contracts (2)
|
—
|
|
|
65
|
|
|
851
|
|
|
—
|
|
|
916
|
|
|
—
|
|
|
66
|
|
|
811
|
|
|
—
|
|
|
877
|
|
||||||||||
Other
|
—
|
|
|
5
|
|
|
—
|
|
|
16
|
|
|
21
|
|
|
—
|
|
|
4
|
|
|
1
|
|
|
13
|
|
|
18
|
|
||||||||||
Plan assets at fair value
|
$
|
1,727
|
|
|
$
|
7,052
|
|
|
$
|
851
|
|
|
$
|
533
|
|
|
$
|
10,163
|
|
|
$
|
1,497
|
|
|
$
|
5,809
|
|
|
$
|
813
|
|
|
$
|
461
|
|
|
$
|
8,580
|
|
(1)
|
Certain investments that were measured at net asset value (NAV) per share or its equivalent have not been classified in the fair value hierarchy. The NAV amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of plan assets at December 31, 2019 and 2018.
|
(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.
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
Insurance
Contracts
|
|
Real
Estate
|
|
Other
|
|
Total
|
|
Insurance
Contracts
|
|
Real
Estate
|
|
Other
|
|
Total
|
||||||||||||||||
U.S. Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance January 1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
15
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Relating to assets still held at December 31
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Relating to assets sold during the year
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||
Purchases and sales, net
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Balance December 31
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
13
|
|
International Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance January 1
|
$
|
811
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
813
|
|
|
$
|
470
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
473
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Relating to assets still held at December 31
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
||||||||
Purchases and sales, net
|
(14
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(16
|
)
|
|
380
|
|
|
(1
|
)
|
|
—
|
|
|
379
|
|
||||||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||||
Balance December 31
|
$
|
851
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
851
|
|
|
$
|
811
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
813
|
|
|
Fair Value Measurements Using
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
|
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV (1)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV (1)
|
|
Total
|
||||||||||||||||||||
|
2019
|
|
|
|
|
|
2018
|
|
|
|
|
||||||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
74
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
94
|
|
Investment funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Developed markets equities
|
19
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|
343
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
279
|
|
|
295
|
|
||||||||||
Emerging markets equities
|
15
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
81
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
79
|
|
||||||||||
Government and agency obligations
|
1
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
17
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
16
|
|
||||||||||
Corporate obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||||||||
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||||||
Developed markets
|
225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||||||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Government and agency obligations
|
—
|
|
|
196
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
||||||||||
Corporate obligations
|
—
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
149
|
|
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
||||||||||
Mortgage and asset-backed securities
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||||||||
Plan assets at fair value
|
$
|
312
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
428
|
|
|
$
|
1,102
|
|
|
$
|
307
|
|
|
$
|
281
|
|
|
$
|
—
|
|
|
$
|
380
|
|
|
$
|
968
|
|
(1)
|
Certain investments that were measured at net asset value (NAV) per share or its equivalent have not been classified in the fair value hierarchy. The NAV amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of plan assets at December 31, 2019 and 2018.
|
|
U.S. Pension Benefits
|
|
International Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||||
2020
|
$
|
747
|
|
|
$
|
242
|
|
|
$
|
88
|
|
2021
|
717
|
|
|
225
|
|
|
92
|
|
|||
2022
|
710
|
|
|
243
|
|
|
94
|
|
|||
2023
|
718
|
|
|
250
|
|
|
98
|
|
|||
2024
|
708
|
|
|
250
|
|
|
100
|
|
|||
2025 — 2029
|
3,943
|
|
|
1,417
|
|
|
540
|
|
|
Pension Plans
|
|
Other Postretirement
Benefit Plans
|
||||||||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
|||||||||||||||||||||||||||||||
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
Net (loss) gain arising during the period
|
$
|
(816
|
)
|
|
$
|
(397
|
)
|
|
$
|
(19
|
)
|
|
$
|
(227
|
)
|
|
$
|
(505
|
)
|
|
$
|
309
|
|
|
$
|
112
|
|
|
$
|
186
|
|
|
$
|
170
|
|
Prior service (cost) credit arising during the period
|
(4
|
)
|
|
(4
|
)
|
|
(13
|
)
|
|
(1
|
)
|
|
(10
|
)
|
|
22
|
|
|
(11
|
)
|
|
2
|
|
|
(31
|
)
|
|||||||||
|
$
|
(820
|
)
|
|
$
|
(401
|
)
|
|
$
|
(32
|
)
|
|
$
|
(228
|
)
|
|
$
|
(515
|
)
|
|
$
|
331
|
|
|
$
|
101
|
|
|
$
|
188
|
|
|
$
|
139
|
|
Net loss amortization included in benefit cost
|
$
|
151
|
|
|
$
|
232
|
|
|
$
|
180
|
|
|
$
|
64
|
|
|
$
|
84
|
|
|
$
|
98
|
|
|
$
|
(10
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
Prior service credit amortization included in benefit cost
|
(49
|
)
|
|
(50
|
)
|
|
(53
|
)
|
|
(12
|
)
|
|
(13
|
)
|
|
(11
|
)
|
|
(78
|
)
|
|
(84
|
)
|
|
(98
|
)
|
|||||||||
|
$
|
102
|
|
|
$
|
182
|
|
|
$
|
127
|
|
|
$
|
52
|
|
|
$
|
71
|
|
|
$
|
87
|
|
|
$
|
(88
|
)
|
|
$
|
(83
|
)
|
|
$
|
(97
|
)
|
|
U.S. Pension and Other
Postretirement Benefit Plans
|
|
International Pension Plans
|
||||||||||||||
December 31
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.40
|
%
|
|
3.70
|
%
|
|
4.30
|
%
|
|
2.20
|
%
|
|
2.10
|
%
|
|
2.20
|
%
|
Expected rate of return on plan assets
|
8.10
|
%
|
|
8.20
|
%
|
|
8.70
|
%
|
|
4.90
|
%
|
|
5.10
|
%
|
|
5.10
|
%
|
Salary growth rate
|
4.30
|
%
|
|
4.30
|
%
|
|
4.30
|
%
|
|
2.80
|
%
|
|
2.90
|
%
|
|
2.90
|
%
|
Interest crediting rate
|
3.40
|
%
|
|
3.30
|
%
|
|
3.30
|
%
|
|
2.90
|
%
|
|
2.80
|
%
|
|
3.00
|
%
|
Benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.40
|
%
|
|
4.40
|
%
|
|
3.70
|
%
|
|
1.50
|
%
|
|
2.20
|
%
|
|
2.10
|
%
|
Salary growth rate
|
4.20
|
%
|
|
4.30
|
%
|
|
4.30
|
%
|
|
2.80
|
%
|
|
2.80
|
%
|
|
2.90
|
%
|
Interest crediting rate
|
4.90
|
%
|
|
3.40
|
%
|
|
3.30
|
%
|
|
2.80
|
%
|
|
2.90
|
%
|
|
2.80
|
%
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Interest income
|
$
|
(274
|
)
|
|
$
|
(343
|
)
|
|
$
|
(385
|
)
|
Interest expense
|
893
|
|
|
772
|
|
|
754
|
|
|||
Exchange losses (gains)
|
187
|
|
|
145
|
|
|
(11
|
)
|
|||
Income from investments in equity securities, net (1)
|
(170
|
)
|
|
(324
|
)
|
|
(352
|
)
|
|||
Net periodic defined benefit plan (credit) cost other than service cost
|
(545
|
)
|
|
(512
|
)
|
|
(512
|
)
|
|||
Other, net
|
48
|
|
|
(140
|
)
|
|
6
|
|
|||
|
$
|
139
|
|
|
$
|
(402
|
)
|
|
$
|
(500
|
)
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
Tax Rate
|
|
Amount
|
|
Tax Rate
|
|
Amount
|
|
Tax Rate
|
|||||||||
U.S. statutory rate applied to income before taxes
|
$
|
2,408
|
|
|
21.0
|
%
|
|
$
|
1,827
|
|
|
21.0
|
%
|
|
$
|
2,282
|
|
|
35.0
|
%
|
Differential arising from:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign earnings
|
(1,020
|
)
|
|
(8.9
|
)
|
|
(245
|
)
|
|
(2.8
|
)
|
|
(1,654
|
)
|
|
(25.4
|
)
|
|||
GILTI and the foreign-derived intangible income deduction
|
336
|
|
|
2.9
|
|
|
(25
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|||
Tax settlements
|
(403
|
)
|
|
(3.5
|
)
|
|
(22
|
)
|
|
(0.3
|
)
|
|
(356
|
)
|
|
(5.5
|
)
|
|||
R&D tax credit
|
(118
|
)
|
|
(1.0
|
)
|
|
(96
|
)
|
|
(1.1
|
)
|
|
(71
|
)
|
|
(1.1
|
)
|
|||
State taxes
|
(2
|
)
|
|
—
|
|
|
201
|
|
|
2.3
|
|
|
77
|
|
|
1.2
|
|
|||
Acquisition of Peloton
|
209
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
TCJA
|
117
|
|
|
1.0
|
|
|
289
|
|
|
3.3
|
|
|
2,625
|
|
|
40.3
|
|
|||
Valuation allowances
|
113
|
|
|
1.0
|
|
|
269
|
|
|
3.1
|
|
|
632
|
|
|
9.7
|
|
|||
Acquisition-related costs, including amortization
|
95
|
|
|
0.8
|
|
|
267
|
|
|
3.1
|
|
|
713
|
|
|
10.9
|
|
|||
Restructuring
|
39
|
|
|
0.3
|
|
|
56
|
|
|
0.6
|
|
|
142
|
|
|
2.2
|
|
|||
Other (1)
|
(87
|
)
|
|
(0.7
|
)
|
|
(13
|
)
|
|
(0.1
|
)
|
|
(287
|
)
|
|
(4.4
|
)
|
|||
|
$
|
1,687
|
|
|
14.7
|
%
|
|
$
|
2,508
|
|
|
28.8
|
%
|
|
$
|
4,103
|
|
|
62.9
|
%
|
(1)
|
Other includes the tax effects of losses on foreign subsidiaries and miscellaneous items.
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
439
|
|
|
$
|
3,717
|
|
|
$
|
3,483
|
|
Foreign
|
11,025
|
|
|
4,984
|
|
|
3,038
|
|
|||
|
$
|
11,464
|
|
|
$
|
8,701
|
|
|
$
|
6,521
|
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Current provision
|
|
|
|
|
|
||||||
Federal
|
$
|
514
|
|
|
$
|
536
|
|
|
$
|
5,585
|
|
Foreign
|
1,806
|
|
|
2,281
|
|
|
1,229
|
|
|||
State
|
(77
|
)
|
|
200
|
|
|
(90
|
)
|
|||
|
2,243
|
|
|
3,017
|
|
|
6,724
|
|
|||
Deferred provision
|
|
|
|
|
|
||||||
Federal
|
(330
|
)
|
|
(402
|
)
|
|
(2,958
|
)
|
|||
Foreign
|
(240
|
)
|
|
(64
|
)
|
|
75
|
|
|||
State
|
14
|
|
|
(43
|
)
|
|
262
|
|
|||
|
(556
|
)
|
|
(509
|
)
|
|
(2,621
|
)
|
|||
|
$
|
1,687
|
|
|
$
|
2,508
|
|
|
$
|
4,103
|
|
|
2019
|
|
2018
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Product intangibles and licenses
|
$
|
442
|
|
|
$
|
1,778
|
|
|
$
|
720
|
|
|
$
|
1,640
|
|
Inventory related
|
32
|
|
|
354
|
|
|
32
|
|
|
377
|
|
||||
Accelerated depreciation
|
—
|
|
|
594
|
|
|
—
|
|
|
582
|
|
||||
Pensions and other postretirement benefits
|
785
|
|
|
191
|
|
|
565
|
|
|
151
|
|
||||
Compensation related
|
322
|
|
|
—
|
|
|
291
|
|
|
—
|
|
||||
Unrecognized tax benefits
|
109
|
|
|
—
|
|
|
174
|
|
|
—
|
|
||||
Net operating losses and other tax credit carryforwards
|
897
|
|
|
—
|
|
|
715
|
|
|
—
|
|
||||
Other
|
764
|
|
|
84
|
|
|
621
|
|
|
66
|
|
||||
Subtotal
|
3,351
|
|
|
3,001
|
|
|
3,118
|
|
|
2,816
|
|
||||
Valuation allowance
|
(1,100
|
)
|
|
|
|
(1,348
|
)
|
|
|
||||||
Total deferred taxes
|
$
|
2,251
|
|
|
$
|
3,001
|
|
|
$
|
1,770
|
|
|
$
|
2,816
|
|
Net deferred income taxes
|
|
|
$
|
750
|
|
|
|
|
$
|
1,046
|
|
||||
Recognized as:
|
|
|
|
|
|
|
|
||||||||
Other Assets
|
$
|
719
|
|
|
|
|
$
|
656
|
|
|
|
||||
Deferred Income Taxes
|
|
|
$
|
1,470
|
|
|
|
|
$
|
1,702
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance January 1
|
$
|
1,893
|
|
|
$
|
1,723
|
|
|
$
|
3,494
|
|
Additions related to current year positions
|
199
|
|
|
221
|
|
|
146
|
|
|||
Additions related to prior year positions
|
46
|
|
|
142
|
|
|
520
|
|
|||
Reductions for tax positions of prior years (1)
|
(454
|
)
|
|
(73
|
)
|
|
(1,038
|
)
|
|||
Settlements (1)
|
(356
|
)
|
|
(91
|
)
|
|
(1,388
|
)
|
|||
Lapse of statute of limitations (2)
|
(103
|
)
|
|
(29
|
)
|
|
(11
|
)
|
|||
Balance December 31
|
$
|
1,225
|
|
|
$
|
1,893
|
|
|
$
|
1,723
|
|
(1)
|
Amounts reflect the settlements with the IRS as discussed below.
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Merck & Co., Inc.
|
$
|
9,843
|
|
|
$
|
6,220
|
|
|
$
|
2,394
|
|
Average common shares outstanding
|
2,565
|
|
|
2,664
|
|
|
2,730
|
|
|||
Common shares issuable (1)
|
15
|
|
|
15
|
|
|
18
|
|
|||
Average common shares outstanding assuming dilution
|
2,580
|
|
|
2,679
|
|
|
2,748
|
|
|||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
3.84
|
|
|
$
|
2.34
|
|
|
$
|
0.88
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
3.81
|
|
|
$
|
2.32
|
|
|
$
|
0.87
|
|
(1)
|
Issuable primarily under share-based compensation plans.
|
|
Derivatives
|
|
Investments
|
|
Employee
Benefit
Plans
|
|
Cumulative
Translation
Adjustment
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
||||||||||
Balance January 1, 2017, net of taxes
|
$
|
338
|
|
|
$
|
(3
|
)
|
|
$
|
(3,206
|
)
|
|
$
|
(2,355
|
)
|
|
$
|
(5,226
|
)
|
Other comprehensive income (loss) before reclassification adjustments, pretax
|
(561
|
)
|
|
212
|
|
|
438
|
|
|
235
|
|
|
324
|
|
|||||
Tax
|
207
|
|
|
(35
|
)
|
|
(106
|
)
|
|
166
|
|
|
232
|
|
|||||
Other comprehensive income (loss) before reclassification adjustments, net of taxes
|
(354
|
)
|
|
177
|
|
|
332
|
|
|
401
|
|
|
556
|
|
|||||
Reclassification adjustments, pretax
|
(141
|
)
|
(1)
|
(291
|
)
|
(2)
|
117
|
|
(3)
|
—
|
|
|
(315
|
)
|
|||||
Tax
|
49
|
|
|
56
|
|
|
(30
|
)
|
|
—
|
|
|
75
|
|
|||||
Reclassification adjustments, net of taxes
|
(92
|
)
|
|
(235
|
)
|
|
87
|
|
|
—
|
|
|
(240
|
)
|
|||||
Other comprehensive income (loss), net of taxes
|
(446
|
)
|
|
(58
|
)
|
|
419
|
|
|
401
|
|
|
316
|
|
|||||
Balance at December 31, 2017, net of taxes
|
(108
|
)
|
|
(61
|
)
|
|
(2,787
|
)
|
|
(1,954
|
)
|
|
(4,910
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, pretax
|
228
|
|
|
(108
|
)
|
|
(728
|
)
|
|
(84
|
)
|
|
(692
|
)
|
|||||
Tax
|
(55
|
)
|
|
1
|
|
|
169
|
|
|
(139
|
)
|
|
(24
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, net of taxes
|
173
|
|
|
(107
|
)
|
|
(559
|
)
|
|
(223
|
)
|
|
(716
|
)
|
|||||
Reclassification adjustments, pretax
|
157
|
|
(1)
|
97
|
|
(2)
|
170
|
|
(3)
|
—
|
|
|
424
|
|
|||||
Tax
|
(33
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(69
|
)
|
|||||
Reclassification adjustments, net of taxes
|
124
|
|
|
97
|
|
|
134
|
|
|
—
|
|
|
355
|
|
|||||
Other comprehensive income (loss), net of taxes
|
297
|
|
|
(10
|
)
|
|
(425
|
)
|
|
(223
|
)
|
|
(361
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adoption of ASU 2018-02
|
(23
|
)
|
|
1
|
|
|
(344
|
)
|
|
100
|
|
|
(266
|
)
|
|||||
Adoption of ASU 2016-01
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018, net of taxes
|
166
|
|
|
(78
|
)
|
|
(3,556
|
)
|
(4)
|
(2,077
|
)
|
|
(5,545
|
)
|
|||||
Other comprehensive income (loss) before reclassification adjustments, pretax
|
86
|
|
|
140
|
|
|
(948
|
)
|
|
112
|
|
|
(610
|
)
|
|||||
Tax
|
(15
|
)
|
|
—
|
|
|
192
|
|
|
(16
|
)
|
|
161
|
|
|||||
Other comprehensive income (loss) before reclassification adjustments, net of taxes
|
71
|
|
|
140
|
|
|
(756
|
)
|
|
96
|
|
|
(449
|
)
|
|||||
Reclassification adjustments, pretax
|
(261
|
)
|
(1)
|
(44
|
)
|
(2)
|
66
|
|
(3)
|
—
|
|
|
(239
|
)
|
|||||
Tax
|
55
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
40
|
|
|||||
Reclassification adjustments, net of taxes
|
(206
|
)
|
|
(44
|
)
|
|
51
|
|
|
—
|
|
|
(199
|
)
|
|||||
Other comprehensive income (loss), net of taxes
|
(135
|
)
|
|
96
|
|
|
(705
|
)
|
|
96
|
|
|
(648
|
)
|
|||||
Balance at December 31, 2019, net of taxes
|
$
|
31
|
|
|
$
|
18
|
|
|
$
|
(4,261
|
)
|
(4)
|
$
|
(1,981
|
)
|
|
$
|
(6,193
|
)
|
(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. In 2017, these amounts included both investments in debt and equity securities; however, as a result of the adoption of ASU 2016-01 in 2018, these amounts relate only to investments in available-for-sale debt securities.
|
(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 $5.1 billion and $4.4 billion at December 31, 2019 and 2018, respectively, and other postretirement benefit plan net gain of $247 million and $170 million at December 31, 2019 and 2018, respectively, as well as pension plan prior service credit of $263 million and $314 million at December 31, 2019 and 2018, respectively, and other postretirement benefit plan prior service credit of $305 million and $375 million at December 31, 2019 and 2018, respectively.
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||
|
U.S.
|
|
Int’l
|
|
Total
|
|
U.S.
|
|
Int’l
|
|
Total
|
|
U.S.
|
|
Int’l
|
|
Total
|
||||||||||||||||||
Pharmaceutical:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Oncology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Keytruda
|
$
|
6,305
|
|
|
$
|
4,779
|
|
|
$
|
11,084
|
|
|
$
|
4,150
|
|
|
$
|
3,021
|
|
|
$
|
7,171
|
|
|
$
|
2,309
|
|
|
$
|
1,500
|
|
|
$
|
3,809
|
|
Alliance revenue - Lynparza (1)
|
269
|
|
|
176
|
|
|
444
|
|
|
127
|
|
|
61
|
|
|
187
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|||||||||
Alliance revenue - Lenvima (1)
|
239
|
|
|
165
|
|
|
404
|
|
|
95
|
|
|
54
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Emend
|
183
|
|
|
205
|
|
|
388
|
|
|
312
|
|
|
210
|
|
|
522
|
|
|
342
|
|
|
213
|
|
|
556
|
|
|||||||||
Vaccines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gardasil/Gardasil 9
|
1,831
|
|
|
1,905
|
|
|
3,737
|
|
|
1,873
|
|
|
1,279
|
|
|
3,151
|
|
|
1,565
|
|
|
743
|
|
|
2,308
|
|
|||||||||
ProQuad/M-M-R II/Varivax
|
1,683
|
|
|
592
|
|
|
2,275
|
|
|
1,430
|
|
|
368
|
|
|
1,798
|
|
|
1,374
|
|
|
303
|
|
|
1,676
|
|
|||||||||
Pneumovax 23
|
679
|
|
|
247
|
|
|
926
|
|
|
627
|
|
|
281
|
|
|
907
|
|
|
581
|
|
|
240
|
|
|
821
|
|
|||||||||
RotaTeq
|
506
|
|
|
284
|
|
|
791
|
|
|
496
|
|
|
232
|
|
|
728
|
|
|
481
|
|
|
204
|
|
|
686
|
|
|||||||||
Vaqta
|
130
|
|
|
108
|
|
|
238
|
|
|
127
|
|
|
112
|
|
|
239
|
|
|
94
|
|
|
124
|
|
|
218
|
|
|||||||||
Hospital Acute Care
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Bridion
|
533
|
|
|
598
|
|
|
1,131
|
|
|
386
|
|
|
531
|
|
|
917
|
|
|
239
|
|
|
465
|
|
|
704
|
|
|||||||||
Noxafil
|
282
|
|
|
380
|
|
|
662
|
|
|
353
|
|
|
389
|
|
|
742
|
|
|
309
|
|
|
327
|
|
|
636
|
|
|||||||||
Primaxin
|
2
|
|
|
271
|
|
|
273
|
|
|
7
|
|
|
258
|
|
|
265
|
|
|
10
|
|
|
270
|
|
|
280
|
|
|||||||||
Invanz
|
30
|
|
|
233
|
|
|
263
|
|
|
253
|
|
|
243
|
|
|
496
|
|
|
361
|
|
|
241
|
|
|
602
|
|
|||||||||
Cubicin
|
92
|
|
|
165
|
|
|
257
|
|
|
191
|
|
|
176
|
|
|
367
|
|
|
189
|
|
|
193
|
|
|
382
|
|
|||||||||
Cancidas
|
6
|
|
|
242
|
|
|
249
|
|
|
12
|
|
|
314
|
|
|
326
|
|
|
20
|
|
|
402
|
|
|
422
|
|
|||||||||
Immunology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Simponi
|
—
|
|
|
830
|
|
|
830
|
|
|
—
|
|
|
893
|
|
|
893
|
|
|
—
|
|
|
819
|
|
|
819
|
|
|||||||||
Remicade
|
—
|
|
|
411
|
|
|
411
|
|
|
—
|
|
|
582
|
|
|
582
|
|
|
—
|
|
|
837
|
|
|
837
|
|
|||||||||
Neuroscience
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Belsomra
|
92
|
|
|
214
|
|
|
306
|
|
|
96
|
|
|
164
|
|
|
260
|
|
|
98
|
|
|
112
|
|
|
210
|
|
|||||||||
Virology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Isentress/Isentress HD
|
398
|
|
|
576
|
|
|
975
|
|
|
513
|
|
|
627
|
|
|
1,140
|
|
|
565
|
|
|
639
|
|
|
1,204
|
|
|||||||||
Zepatier
|
118
|
|
|
252
|
|
|
370
|
|
|
8
|
|
|
447
|
|
|
455
|
|
|
771
|
|
|
888
|
|
|
1,660
|
|
|||||||||
Cardiovascular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Zetia
|
14
|
|
|
575
|
|
|
590
|
|
|
45
|
|
|
813
|
|
|
857
|
|
|
352
|
|
|
992
|
|
|
1,344
|
|
|||||||||
Vytorin
|
16
|
|
|
269
|
|
|
285
|
|
|
10
|
|
|
487
|
|
|
497
|
|
|
124
|
|
|
627
|
|
|
751
|
|
|||||||||
Atozet
|
—
|
|
|
391
|
|
|
391
|
|
|
—
|
|
|
347
|
|
|
347
|
|
|
—
|
|
|
225
|
|
|
225
|
|
|||||||||
Adempas
|
—
|
|
|
419
|
|
|
419
|
|
|
—
|
|
|
329
|
|
|
329
|
|
|
—
|
|
|
300
|
|
|
300
|
|
|||||||||
Diabetes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Januvia
|
1,724
|
|
|
1,758
|
|
|
3,482
|
|
|
1,969
|
|
|
1,718
|
|
|
3,686
|
|
|
2,153
|
|
|
1,584
|
|
|
3,737
|
|
|||||||||
Janumet
|
589
|
|
|
1,452
|
|
|
2,041
|
|
|
811
|
|
|
1,417
|
|
|
2,228
|
|
|
863
|
|
|
1,296
|
|
|
2,158
|
|
|||||||||
Women’s Health
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
NuvaRing
|
742
|
|
|
136
|
|
|
879
|
|
|
722
|
|
|
180
|
|
|
902
|
|
|
564
|
|
|
197
|
|
|
761
|
|
|||||||||
Implanon/Nexplanon
|
568
|
|
|
219
|
|
|
787
|
|
|
495
|
|
|
208
|
|
|
703
|
|
|
496
|
|
|
191
|
|
|
686
|
|
|||||||||
Diversified Brands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Singulair
|
29
|
|
|
669
|
|
|
698
|
|
|
20
|
|
|
688
|
|
|
708
|
|
|
40
|
|
|
692
|
|
|
732
|
|
|||||||||
Cozaar/Hyzaar
|
24
|
|
|
418
|
|
|
442
|
|
|
23
|
|
|
431
|
|
|
453
|
|
|
18
|
|
|
466
|
|
|
484
|
|
|||||||||
Nasonex
|
9
|
|
|
284
|
|
|
293
|
|
|
23
|
|
|
353
|
|
|
376
|
|
|
54
|
|
|
333
|
|
|
387
|
|
|||||||||
Arcoxia
|
—
|
|
|
288
|
|
|
288
|
|
|
—
|
|
|
335
|
|
|
335
|
|
|
—
|
|
|
363
|
|
|
363
|
|
|||||||||
Follistim AQ
|
103
|
|
|
138
|
|
|
241
|
|
|
115
|
|
|
153
|
|
|
268
|
|
|
123
|
|
|
174
|
|
|
298
|
|
|||||||||
Other pharmaceutical (2)
|
1,563
|
|
|
3,343
|
|
|
4,901
|
|
|
1,319
|
|
|
3,380
|
|
|
4,705
|
|
|
1,759
|
|
|
3,556
|
|
|
5,314
|
|
|||||||||
Total Pharmaceutical segment sales
|
18,759
|
|
|
22,992
|
|
|
41,751
|
|
|
16,608
|
|
|
21,081
|
|
|
37,689
|
|
|
15,854
|
|
|
19,536
|
|
|
35,390
|
|
|||||||||
Animal Health:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Livestock
|
582
|
|
|
2,201
|
|
|
2,784
|
|
|
528
|
|
|
2,102
|
|
|
2,630
|
|
|
471
|
|
|
2,013
|
|
|
2,484
|
|
|||||||||
Companion Animals
|
724
|
|
|
885
|
|
|
1,609
|
|
|
710
|
|
|
872
|
|
|
1,582
|
|
|
619
|
|
|
772
|
|
|
1,391
|
|
|||||||||
Total Animal Health segment sales
|
1,306
|
|
|
3,086
|
|
|
4,393
|
|
|
1,238
|
|
|
2,974
|
|
|
4,212
|
|
|
1,090
|
|
|
2,785
|
|
|
3,875
|
|
|||||||||
Other segment sales (3)
|
174
|
|
|
1
|
|
|
175
|
|
|
248
|
|
|
2
|
|
|
250
|
|
|
396
|
|
|
1
|
|
|
397
|
|
|||||||||
Total segment sales
|
20,239
|
|
|
26,079
|
|
|
46,319
|
|
|
18,094
|
|
|
24,057
|
|
|
42,151
|
|
|
17,340
|
|
|
22,322
|
|
|
39,662
|
|
|||||||||
Other (4)
|
86
|
|
|
436
|
|
|
521
|
|
|
118
|
|
|
26
|
|
|
143
|
|
|
84
|
|
|
376
|
|
|
460
|
|
|||||||||
|
$
|
20,325
|
|
|
$
|
26,515
|
|
|
$
|
46,840
|
|
|
$
|
18,212
|
|
|
$
|
24,083
|
|
|
$
|
42,294
|
|
|
$
|
17,424
|
|
|
$
|
22,698
|
|
|
$
|
40,122
|
|
(1)
|
Alliance revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs (see Note 4).
|
(2)
|
Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
|
(3)
|
Represents the non-reportable segments of Healthcare Services and Alliances.
|
(4)
|
Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales. Other in 2019, 2018 and 2017 also includes approximately $80 million, $95 million and $85 million, respectively, related to the sale of the marketing rights to certain products.
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
20,325
|
|
|
$
|
18,212
|
|
|
$
|
17,424
|
|
Europe, Middle East and Africa
|
12,707
|
|
|
12,213
|
|
|
11,478
|
|
|||
Japan
|
3,583
|
|
|
3,212
|
|
|
3,122
|
|
|||
China
|
3,207
|
|
|
2,184
|
|
|
1,586
|
|
|||
Asia Pacific (other than Japan and China)
|
2,943
|
|
|
2,909
|
|
|
2,751
|
|
|||
Latin America
|
2,469
|
|
|
2,415
|
|
|
2,339
|
|
|||
Other
|
1,606
|
|
|
1,149
|
|
|
1,422
|
|
|||
|
$
|
46,840
|
|
|
$
|
42,294
|
|
|
$
|
40,122
|
|
Years Ended December 31
|
2019
|
|
2018
|
|
2017
|
||||||
Segment profits:
|
|
|
|
|
|
||||||
Pharmaceutical segment
|
$
|
28,324
|
|
|
$
|
24,871
|
|
|
$
|
23,018
|
|
Animal Health segment
|
1,609
|
|
|
1,659
|
|
|
1,552
|
|
|||
Other segments
|
(7
|
)
|
|
103
|
|
|
275
|
|
|||
Total segment profits
|
29,926
|
|
|
26,633
|
|
|
24,845
|
|
|||
Other profits
|
363
|
|
|
6
|
|
|
26
|
|
|||
Unallocated:
|
|
|
|
|
|
||||||
Interest income
|
274
|
|
|
343
|
|
|
385
|
|
|||
Interest expense
|
(893
|
)
|
|
(772
|
)
|
|
(754
|
)
|
|||
Depreciation and amortization
|
(1,573
|
)
|
|
(1,334
|
)
|
|
(1,378
|
)
|
|||
Research and development
|
(9,499
|
)
|
|
(9,432
|
)
|
|
(10,004
|
)
|
|||
Amortization of purchase accounting adjustments
|
(1,419
|
)
|
|
(2,664
|
)
|
|
(3,056
|
)
|
|||
Restructuring costs
|
(638
|
)
|
|
(632
|
)
|
|
(776
|
)
|
|||
Charge related to the termination of a collaboration with Samsung
|
—
|
|
|
(423
|
)
|
|
—
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(191
|
)
|
|||
Other unallocated, net
|
(5,077
|
)
|
|
(3,024
|
)
|
|
(2,576
|
)
|
|||
Income Before Taxes
|
$
|
11,464
|
|
|
$
|
8,701
|
|
|
$
|
6,521
|
|
|
Pharmaceutical
|
|
Animal Health
|
|
All Other
|
|
Total
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Included in segment profits:
|
|
|
|
|
|
|
|
||||||||
Equity (income) loss from affiliates
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Depreciation and amortization
|
137
|
|
|
109
|
|
|
10
|
|
|
256
|
|
||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Included in segment profits:
|
|
|
|
|
|
|
|
||||||||
Equity (income) loss from affiliates
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Depreciation and amortization
|
243
|
|
|
82
|
|
|
10
|
|
|
335
|
|
||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Included in segment profits:
|
|
|
|
|
|
|
|
||||||||
Equity (income) loss from affiliates
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Depreciation and amortization
|
125
|
|
|
75
|
|
|
12
|
|
|
212
|
|
December 31
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
8,974
|
|
|
$
|
8,306
|
|
|
$
|
8,070
|
|
Europe, Middle East and Africa
|
4,767
|
|
|
3,706
|
|
|
3,151
|
|
|||
Asia Pacific (other than Japan and China)
|
714
|
|
|
684
|
|
|
632
|
|
|||
Latin America
|
266
|
|
|
264
|
|
|
271
|
|
|||
China
|
174
|
|
|
167
|
|
|
150
|
|
|||
Japan
|
152
|
|
|
159
|
|
|
158
|
|
|||
Other
|
6
|
|
|
5
|
|
|
7
|
|
|||
|
$
|
15,053
|
|
|
$
|
13,291
|
|
|
$
|
12,439
|
|
(b)
|
Supplementary Data
|
($ in millions except per share amounts)
|
4th Q
|
|
3rd Q (1)
|
|
2nd Q
|
|
1st Q (2)
|
||||||||
2019 (3)
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
11,868
|
|
|
$
|
12,397
|
|
|
$
|
11,760
|
|
|
$
|
10,816
|
|
Cost of sales
|
3,669
|
|
|
3,990
|
|
|
3,401
|
|
|
3,052
|
|
||||
Selling, general and administrative
|
2,888
|
|
|
2,589
|
|
|
2,712
|
|
|
2,425
|
|
||||
Research and development
|
2,548
|
|
|
3,204
|
|
|
2,189
|
|
|
1,931
|
|
||||
Restructuring costs
|
194
|
|
|
232
|
|
|
59
|
|
|
153
|
|
||||
Other (income) expense, net
|
(223
|
)
|
|
35
|
|
|
140
|
|
|
188
|
|
||||
Income before taxes
|
2,792
|
|
|
2,347
|
|
|
3,259
|
|
|
3,067
|
|
||||
Net income attributable to Merck & Co., Inc.
|
2,357
|
|
|
1,901
|
|
|
2,670
|
|
|
2,915
|
|
||||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
0.93
|
|
|
$
|
0.74
|
|
|
$
|
1.04
|
|
|
$
|
1.13
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
0.92
|
|
|
$
|
0.74
|
|
|
$
|
1.03
|
|
|
$
|
1.12
|
|
2018 (3)
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
10,998
|
|
|
$
|
10,794
|
|
|
$
|
10,465
|
|
|
$
|
10,037
|
|
Cost of sales
|
3,289
|
|
|
3,619
|
|
|
3,417
|
|
|
3,184
|
|
||||
Selling, general and administrative
|
2,643
|
|
|
2,443
|
|
|
2,508
|
|
|
2,508
|
|
||||
Research and development
|
2,214
|
|
|
2,068
|
|
|
2,274
|
|
|
3,196
|
|
||||
Restructuring costs
|
138
|
|
|
171
|
|
|
228
|
|
|
95
|
|
||||
Other (income) expense, net
|
110
|
|
|
(172
|
)
|
|
(48
|
)
|
|
(291
|
)
|
||||
Income before taxes
|
2,604
|
|
|
2,665
|
|
|
2,086
|
|
|
1,345
|
|
||||
Net income attributable to Merck & Co., Inc.
|
1,827
|
|
|
1,950
|
|
|
1,707
|
|
|
736
|
|
||||
Basic earnings per common share attributable to Merck & Co., Inc. common shareholders
|
$
|
0.70
|
|
|
$
|
0.73
|
|
|
$
|
0.64
|
|
|
$
|
0.27
|
|
Earnings per common share assuming dilution attributable to Merck & Co., Inc. common shareholders
|
$
|
0.69
|
|
|
$
|
0.73
|
|
|
$
|
0.63
|
|
|
$
|
0.27
|
|
(1)
|
Amounts for 2019 include a charge related to the acquisition of Peloton Therapeutics, Inc. (see Note 3).
|
(2)
|
Amounts for 2018 include a charge related to the formation of a collaboration with Eisai (see Note 4).
|
Item 9A.
|
Controls and Procedures.
|
|
|
|
|
|
|
|
|
Kenneth C. Frazier
|
|
Robert M. Davis
|
Chairman, President
and Chief Executive Officer
|
|
Executive Vice President, Global Services,
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)
|
|
17,867,551(2)
|
|
|
$
|
59.88
|
|
|
110,842,998
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
17,867,551
|
|
|
$
|
59.88
|
|
|
110,842,998
|
|
(1)
|
Includes options to purchase shares of Company Common Stock and other rights under the following shareholder-approved plans: the Merck & Co., Inc. 2010 and 2019 Incentive Stock Plans, and the Merck & Co., Inc. 2010 Non-Employee Directors Stock Option Plan.
|
(2)
|
Excludes approximately 13,527,086 shares of restricted stock units and 1,927,145 performance share units (assuming maximum payouts) under the Merck Sharp & Dohme 2004, 2007 and 2010 Incentive Stock Plans. Also excludes 197,485 shares of phantom stock deferred under the MSD Employee Deferral Program and 557,132 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
|
|
—
|
|
|
3.2
|
|
—
|
|
|
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
|
|
—
|
|
|
4.3
|
|
—
|
|
|
4.4
|
|
—
|
|
|
4.5
|
|
—
|
|
|
4.6
|
|
—
|
|
|
4.7
|
|
—
|
|
Exhibit
Number
|
|
|
|
Description
|
4.8
|
|
—
|
|
|
4.9
|
|
—
|
|
|
4.10
|
|
—
|
|
|
4.11
|
|
—
|
|
|
4.12
|
|
—
|
|
|
4.13
|
|
—
|
|
|
*10.1
|
|
—
|
|
|
*10.2
|
|
—
|
|
|
*10.3
|
|
—
|
|
|
*10.4
|
|
—
|
|
|
*10.5
|
|
—
|
|
|
*10.6
|
|
—
|
|
|
*10.7
|
|
—
|
|
|
*10.8
|
|
—
|
|
|
*10.9
|
|
—
|
|
Exhibit
Number
|
|
|
|
Description
|
*10.10
|
|
—
|
|
|
*10.11
|
|
—
|
|
|
*10.12
|
|
—
|
|
|
*10.13
|
|
—
|
|
|
*10.14
|
|
—
|
|
|
*10.15
|
|
—
|
|
|
*10.16
|
|
—
|
|
|
*10.17
|
|
—
|
|
|
*10.18
|
|
—
|
|
|
10.19
|
|
—
|
|
|
10.20
|
|
—
|
|
|
10.21
|
|
—
|
|
|
10.22
|
|
—
|
|
|
21
|
|
—
|
|
|
23
|
|
—
|
|
|
24.1
|
|
—
|
|
|
24.2
|
|
—
|
|
|
31.1
|
|
—
|
|
|
31.2
|
|
—
|
|
|
32.1
|
|
—
|
|
|
32.2
|
|
—
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
|
|
Description
|
101.INS
|
|
—
|
|
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
—
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
—
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
|
—
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
—
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
—
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
104
|
|
—
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
*
|
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.
|
|
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.
|
MERCK & CO., INC.
|
||
|
|
|
By:
|
KENNETH C. FRAZIER
|
|
|
(Chairman, President and Chief Executive Officer)
|
|
|
|
|
|
By:
|
/s/ JENNIFER ZACHARY
|
|
|
Jennifer Zachary
|
|
|
(Attorney-in-Fact)
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
KENNETH C. FRAZIER
|
|
Chairman, President and Chief Executive Officer;
Principal Executive Officer; Director
|
|
February 26, 2020
|
ROBERT M. DAVIS
|
|
Executive Vice President, Global Services, and Chief Financial Officer; Principal Financial Officer
|
|
February 26, 2020
|
RITA A. KARACHUN
|
|
Senior Vice President Finance-Global Controller;
Principal Accounting Officer
|
|
February 26, 2020
|
LESLIE A. BRUN
|
|
Director
|
|
February 26, 2020
|
THOMAS R. CECH
|
|
Director
|
|
February 26, 2020
|
MARY ELLEN COE
|
|
Director
|
|
February 26, 2020
|
PAMELA J. CRAIG
|
|
Director
|
|
February 26, 2020
|
THOMAS H. GLOCER
|
|
Director
|
|
February 26, 2020
|
ROCHELLE B. LAZARUS
|
|
Director
|
|
February 26, 2020
|
PAUL B. ROTHMAN
|
|
Director
|
|
February 26, 2020
|
PATRICIA F. RUSSO
|
|
Director
|
|
February 26, 2020
|
INGE G. THULIN
|
|
Director
|
|
February 26, 2020
|
WENDELL P. WEEKS
|
|
Director
|
|
February 26, 2020
|
PETER C. WENDELL
|
|
Director
|
|
February 26, 2020
|
By:
|
|
/S/ JENNIFER ZACHARY
|
|
|
Jennifer Zachary
|
|
|
(Attorney-in-Fact)
|
|
MERCK & CO., INC.
|
|
|
|
|
|
By /s/ Bruce Ellis
|
|
|
Bruce W. Ellis
|
|
|
Counsel
|
|
|
Global Benefits & Executive Compensation
|
|
II.
|
ELECTION OF DEFERRAL, INVESTMENT ALTERNATIVES AND DISTRIBUTION SCHEDULE
|
A.
|
Election of Voluntary Deferral Amount
|
1.
|
Prior to December 31 of each year, each director may irrevocably elect (an “Initial Election”) to defer, until termination of service as a director or later, 50% or 100% of each of the following (together, the “Voluntary Deferral Amount”) with respect to the 12 months beginning April 1 of the next calendar year after such Initial Election:
|
2.
|
Prior to commencement of duties as a director or within the first 30 days following commencement of services, a director newly elected or appointed to the Board during a calendar year may make an Initial Election for the portion of the Voluntary Deferral Amount applicable to such director's first year of service (or part thereof).
|
3.
|
The Voluntary Deferral Amount shall be credited as follows: (1) Board and committee meeting fees, if any, that are deferred are credited as of the last business day of each calendar quarter; (2) if the Board retainer, Lead Director retainer, Committee Chairperson retainer and/or Audit Committee member retainer are deferred, a pro-rata share of the deferred retainer is credited as of the last business day of each calendar quarter. The dates as of which the Voluntary Deferral Amount, or parts thereof, are credited to the director's deferred account are hereinafter referred to as the Voluntary Deferral Dates.
|
4.
|
Once an Initial Election is made, including, effective December’s 2008, elections made by directors of MSD prior to the Transactions, it shall continue to apply in successive years on the same terms and conditions until the director makes a new Initial Election.
|
5.
|
Certain directors (the “Schering Directors”) who were directors of Schering‑Plough Corporation on the Closing Date of the Transactions continued service following the Closing Date. Anything in the Plan to the contrary notwithstanding, the Schering Directors were first eligible to elect Voluntary Deferrals by December 31 of the year that includes the Closing Date. That initial election may not apply earlier than January 1 of the following year and shall continue through April 1 of the second year following the Closing Date.
|
B.
|
Mandatory Deferral Amount
|
1.
|
As of the Friday following the Company’s Annual Meeting of Shareholders (the “Mandatory Deferral Date”), each director will be credited with an amount equivalent to the annual cash retainer for the 12 month period beginning on the April 1 preceding the Annual Meeting; provided, however, that effective for the 12-month period beginning April 1, 2020 and thereafter, such credit shall instead equal $200,000 (the “Mandatory Deferral Amount”). The Mandatory Deferral Amount will be measured by the Merck Common Stock account.
|
2.
|
A director newly elected or appointed to the Board after the Mandatory Deferral Date will be credited with a pro rata portion of the Mandatory Deferral Amount applicable to such director's first year of service (or part thereof). Such pro rata portion shall be credited to the director's account as of the first day of such director's service.
|
3.
|
For purposes of the Mandatory Deferral Amount, the Schering Directors shall be treated as if newly elected or appointed to the Board as of the Closing Date.
|
C.
|
Automatic Deferral of Executive Committee Fees
|
D.
|
Election of Investment Alternatives
|
F.
|
Changes to Distribution Schedule
|
G.
|
Unforeseeable Emergency
|
A.
|
Merck Common Stock
|
1.
|
Initial Crediting. The annual Mandatory Deferral Amount shall be used to determine the number of full and partial shares of Merck Common Stock that such amount would purchase at the closing price of the Common Stock on the New York Stock Exchange (“NYSE”) on the Mandatory Deferral Date.
|
2.
|
Dividends. Each director's account will be credited with the additional number of full and partial shares of Merck Common Stock that would have been purchasable with the dividends on shares previously credited to the account at the closing price of the Common Stock on the NYSE on the date each dividend was paid.
|
3.
|
Distributions. Distributions from the Merck Common Stock account will be valued at the closing price of Merck Common Stock on the NYSE as of the Distribution Date.
|
4.
|
For purposes of valuation of Merck Common Stock, if Merck Common Stock is no longer traded on the NYSE, but is publicly traded on any other exchange, references to NYSE shall mean such other exchange. If Merck Common Stock is not publicly traded and if the Governance Committee of the Board of Directors (formerly known as the Committee on Corporate Governance) determines that a measurement of Merck Common Stock on any Mandatory or Voluntary Deferral Date or Distribution Date would not constitute fair market value, then the Committee shall decide on the date and method to determine fair market value, which shall be in accord with any requirements set forth under Section 409A or any successor thereto.
|
B.
|
Other Investment Alternatives
|
2.
|
Dividends. Each director’s account will be credited with the additional number of full and partial Other Investment Alternative shares that would have been purchasable, at the closing net asset value of the Other Investment Alternative shares as of the date each dividend is paid on the Other Investment Alternative shares, with the dividends that would have been paid on the number of shares previously credited to such account (including pro rata dividends on any partial shares).
|
3.
|
Distributions. Other Investment Alternative distributions will be valued based on the closing net asset value of the Other Investment Alternative shares as of the Distribution Date.
|
C.
|
Adjustments
|
IV.
|
REDESIGNATION WITHIN A DEFERRAL ACCOUNT
|
1.
|
During Active Service. There is no limit on the number of times a director may Redesignate the portion of his/her deferred account permitted to be Redesignated. Each such request shall be irrevocable and can be Redesignated in whole percentages or as a dollar amount.
|
2.
|
After Death. Following the death of a director, the legal representative or beneficiary of such director may Redesignate subject to the same rules as for active directors set forth in Article IV, Section B.1.
|
V.
|
PAYMENT OF DEFERRED AMOUNTS
|
A.
|
Payment
|
B.
|
Forfeitures
|
(i)
|
joined the Board of, managed, operated, participated in a material way in, entered employment with, performed consulting (or any other) services for, or otherwise been connected in any material manner with a company, corporation, enterprise, firm, limited partnership, partnership, person, sole proprietorship or any other business entity determined by the Governance Committee in its sole discretion to be competitive with the business of the Company, its subsidiaries or its affiliates (a "Competitor");
|
(ii)
|
directly or indirectly acquired an equity interest of 5 percent or greater in a Competitor; or
|
(iii)
|
disclosed any material trade secrets or other material confidential information, including customer lists, relating to the Company or to the business of the Company to others, including a Competitor.
|
Name
|
Country or State
of Incorporation
|
7728026 Canada Inc.
|
Canada
|
Aacifar-Produtos Quimicos e Farmaceuticos, Sociedade Unipessoal, Lda
|
Portugal
|
Abmaxis Inc.
|
Delaware
|
Afferent Pharmaceuticals, Inc.
|
Delaware
|
Agrident GmbH
|
Germany
|
Allflex Argentia S.A.
|
Argentina
|
Allflex Australia Pty Ltd
|
Australia
|
Allflex Dan-mark ApS
|
Denmark
|
Allflex Europe SAS
|
France
|
Allflex Group Germany GmbH
|
Germany
|
Allflex USA, Inc.
|
Delaware
|
Allflex UK Group
|
United Kingdom
|
Allflex Avrasya Havyan Kimlik Sistemleri San. Ve Ticaret Ltd Sti
|
Turkey
|
Allflex (China) Intelligent Technology Co., Ltd.
|
People’s Republic of China
|
Allflex India Private Limited
|
India
|
Allflex Polska Sp z.o.o.
|
Poland
|
Allflex New Zealand Limited
|
New Zealand
|
Animal Health Registration World Wide (Proprietary) Limited
|
South Africa
|
Antelliq Corporation
|
Delaware
|
Antelliq Finance, Inc.
|
Delaware
|
Antelliq Holdings, Inc.
|
Delaware
|
AVL Holdings Limited
|
United Kingdom
|
Beijing Protection Science And Technology Co., Ltd.
|
People’s Republic of China
|
Biomark, Inc.
|
Idaho
|
BRC Ltd.
|
Bermuda
|
Burgwedel Biotech GmbH
|
Germany
|
Calporta Therapeutics, Inc.
|
Delaware
|
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
|
Corporation Allflex, Inc.
|
Canada
|
Cosmas B.V.
|
Netherlands
|
Cubist (UK) Ltd
|
United Kingdom
|
Cubist Pharmaceuticals (UK) Ltd.
|
United Kingdom
|
Cubist Pharmaceuticals LLC
|
Delaware
|
Dashtag
|
United Kingdom
|
Desarrollos Farmaceuticos Y Cosmeticos, S.A.
|
Spain
|
Dialstat Trading 91 Pty Ltd T/A Allflex SA
|
South Africa
|
Intervet Deutschland GmbH
|
Germany
|
Intervet Ecuador S.A.
|
Ecuador
|
Intervet Egypt for Animal Health SAE
|
Egypt
|
Intervet GesmbH
|
Austria
|
Intervet Hellas A.E.
|
Greece
|
Intervet Holding B.V.
|
Netherlands
|
Intervet Holdings France SAS
|
France
|
Intervet Hungaria Ertékesitő Korlátolt Felelősségu Tarsaság
|
Hungary
|
Intervet Inc.
|
Delaware
|
Intervet India Pvt Limited
|
India
|
Intervet International B.V.
|
Netherlands
|
Intervet International GmbH
|
Germany
|
Intervet International Sarl
|
France
|
Intervet LLC
|
Russian Federation
|
Intervet Maroc S.A.
|
Morocco
|
Intervet Mexico S.A. de C.V.
|
Mexico
|
Intervet Middle East Limited
|
Cyprus
|
Intervet Nederland B.V.
|
Netherlands
|
Intervet Oy
|
Finland
|
Intervet Philippines, Inc.
|
Philippines
|
Intervet Productions S.A.
|
France
|
Intervet Productions Srl
|
Italy
|
Intervet Romania SRL
|
Romania
|
Intervet S.A.
|
Peru
|
Intervet SAS
|
France
|
Intervet Schering-Plough Animal Health Pty Ltd
|
Australia
|
Intervet South Africa (Proprietary) Limited
|
South Africa
|
Intervet Sp. z.o.o.
|
Poland
|
Intervet UK Limited
|
United Kingdom
|
Intervet UK Production Limited
|
United Kingdom
|
Intervet Venezolana SA
|
Venezuela
|
Intervet Veterinaria Chile Ltda
|
Chile
|
Intervet Veteriner Ilaclari Pazarlama ve Ticaret Ltd. Sirketi
|
Turkey
|
Intervet, s.r.o.
|
Czech Republic
|
Interveterinaria SA de CV
|
Mexico
|
IOmet Pharma Ltd.
|
United Kingdom
|
Laboratoires Merck Sharp & Dohme-Chibret
|
France
|
Laboratorios Abello, S.A.
|
Spain
|
Laboratorios Biopat, S.A.
|
Spain
|
Laboratorios Chibret, S.A.
|
Spain
|
Laboratorios Frosst, S.A.
|
Spain
|
Laboratorios Quimico-Farmaceuticos Chibret, Sociedade Unipessoal, Lda.
|
Portugal
|
Maple Leaf Holdings GmbH
|
Switzerland
|
Maya Tibbi Urunler Ticaret Limited Sirketi
|
Turkey
|
MCM Vaccine B.V.1
|
Netherlands
|
MCM Vaccine Co. 1
|
Pennsylvania
|
Med-Nim (Proprietary) Limited
|
South Africa
|
Merck and Company, Incorporated
|
Delaware
|
Merck Canada Inc.
|
Canada
|
Merck Capital Ventures, LLC1
|
Delaware
|
Merck Frosst Canada & Co.
|
Canada
|
Merck Frosst Company
|
Canada
|
Merck Global Health Innovation Fund, LLC
|
Delaware
|
Merck Global Health Innovation, Private Equity, LLC
|
Delaware
|
Merck HDAC Research, LLC
|
Delaware
|
Merck Holdings II Corp.
|
Delaware
|
Merck Holdings III Corp.
|
Delaware
|
Merck Holdings IV Corp.
|
Delaware
|
Merck Holdings LLC
|
Delaware
|
Merck Lumira Biosciences Fund L.P.1
|
Canada
|
Merck Registry Holdings, Inc.
|
New Jersey
|
Merck International Holdings Corp.
|
Delaware
|
Merck Sharp & Dohme (Argentina) LLC
|
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) 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 (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 Farmaceutica Ltda.
|
Brazil
|
Merck Sharp & Dohme Finance Europe Limited
|
United Kingdom
|
Merck Sharp & Dohme Gesellschaft m.b.H.
|
Austria
|
Merck Sharp & Dohme IDEA GmbH
|
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 Limitada
|
Bolivia
|
Merck Sharp & Dohme Limited
|
United Kingdom
|
Merck Sharp & Dohme Manufacturing Unlimited Company
|
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 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 Salud Animal Columbia S.A.S.
|
Colombia
|
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, Lda.
|
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
|
Merko B.V.
|
Netherlands
|
Merko NV
|
Belgium
|
Merko Dalton Continental B.V.
|
Netherlands
|
ML Holdings (Canada) Inc.
|
Canada
|
MMUSA Acquisition II Corp.1
|
Delaware
|
MRL Cambridge ESC, LLC
|
Delaware
|
MRL San Francisco, LLC
|
Delaware
|
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 (Phils.), Inc
|
Philippines
|
MSD Animal Health (Shanghai) Trading Co., Ltd.
|
China
|
MSD Animal Health A/S
|
Denmark
|
MSD Animal Health BVBA
|
Belgium
|
MSD Animal Health Danube Biotech GmbH
|
Austria
|
MSD Animal Health FZ-LLC
|
United Arab Emirates
|
MSD Animal Health GmbH
|
Switzerland
|
MSD Animal Health Innovation AS
|
Norway
|
MSD Animal Health Innovation GmbH
|
Germany
|
MSD Animal Health Innovation Pte. Ltd.
|
Singapore
|
MSD Animal Health Innovation SAS
|
France
|
MSD Animal Health K.K.
|
Japan
|
MSD Investments (Holdings) GmbH
|
Switzerland
|
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 NL 4 B.V.
|
Netherlands
|
MSD Oncology GmbH
|
Switzerland
|
MSD Oncology Holdings Limited
|
United Kingdom
|
MSD Overseas Manufacturing Co (Ireland) Unlimited Company
|
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 Unlimited Company
|
Ireland
|
MSD Pharmaceuticals Investments 1 Unlimited Company
|
Ireland
|
MSD Pharmaceuticals Investments 3 Unlimited Company
|
Ireland
|
MSD Pharmaceuticals Ireland Unlimited Company
|
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 RDC Costa Rica Sociedad de Responsabilidad Limitada
|
Cost Rica
|
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 Switzerland Investments 1 Unlimited Company
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Ireland
|
MSD Switzerland Investments 4 Unlimited Company
|
Ireland
|
MSD Switzerland Investments 5 Unlimited Company
|
Ireland
|
MSD Ukraine Limited Liability Company
|
Ukraine
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MSD Unterstutzungskasse GmbH
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Germany
|
MSD Vaccines (Ireland) Limited
|
Ireland
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MSD Vaccines Limited
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United Kingdom
|
MSD Vaccins
|
France
|
MSD Vaccins Holdings
|
France
|
MSD Venezuela Holding GmbH
|
Switzerland
|
MSD Ventures (Ireland) Unlimited Company
|
Ireland
|
MSD Verwaltungs GmbH
|
Germany
|
MSD Vietnam Company Limited
|
Vietnam
|
MSD Vietnam Holdings B.V.
|
Netherlands
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MSD Vostok B.V.
|
Netherlands
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MSDRG Holdings Unlimited Company
|
Switzerland
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MSDRG LLC
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Delaware
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MSD-SUN, LLC1
|
Delaware
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Multilan AG
|
Switzerland
|
Nanjing Organon Pharmaceutical Co., Ltd.
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China
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Nihon MSD G.K.
|
Japan
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Nourifarma - Produtos Quimicos e Farmaceuticos, Sociedade Uniperssoal, Lda
|
Portugal
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OBS Holdings B.V.
|
Netherlands
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Oncoethix GmbH
|
Switzerland
|
Optimer Pharmaceuticals LLC
|
Delaware
|
Organon (India) Private Limited
|
India
|
Organon (Ireland) Ltd
|
Ireland
|
Organon (Philippines) Inc.
|
Philippines
|
Organon Agencies B.V.
|
Netherlands
|
Organon BioSciences International B.V.
|
Netherlands
|
Organon BioSciences Ventures B.V.
|
Netherlands
|
Organon China B.V.
|
Netherlands
|
Organon Egypt Ltd
|
Egypt
|
Organon Laboratories Limited
|
United Kingdom
|
Organon Latin America S.A.
|
Uruguay
|
Organon Middle East S.A.L.
|
Lebanon
|
Organon Participations B.V.
|
Netherlands
|
Organon Teknika Corporation LLC
|
Delaware
|
Organon USA Inc.
|
New Jersey
|
OS ID AS
|
Norway
|
Peloton Therapeutics, Inc.
|
Delaware
|
P.T. Merck Sharp & Dohme Indonesia
|
Indonesia
|
Physicians Interactive India Private Limited
|
India
|
Prondil Sociedad Anónima
|
Uruguay
|
PT Intervet Indonesia
|
Indonesia
|
PT Merck Sharp Dohme Pharma Tbk 1
|
Indonesia
|
Rigontec GmbH
|
Germany
|
Rosetta Biosoftware UK Limited
|
United Kingdom
|
Rosetta Inpharmatics LLC
|
Delaware
|
Scan Aqua AS
|
Norway
|
SC Allflex Management, Inc.
|
Israel
|
S.C. Allflex Romania S.R.L.
|
Romania
|
SCR Europe SRL
|
Italy
|
SCR Monitoring Mexico
|
Mexico
|
Schering-Plough
|
France
|
Schering-Plough (India) Private Limited
|
India
|
Schering-Plough (Ireland) Unlimited Company
|
Ireland
|
Schering-Plough Animal Health Limited
|
New Zealand
|
Schering-Plough Bermuda Ltd.
|
Bermuda
|
Schering-Plough Canada Inc.
|
Canada
|
Schering-Plough Central East AG
|
Switzerland
|
Vree Health Italia S.r.l.
|
Italy
|
Vree Health Ltd.
|
United Kingdom
|
Werthenstein Biopharma GmbH
|
Switzerland
|
Zoöpharm B.V.
|
Netherlands
|
/s/ Kenneth C. Frazier
|
Chairman, President and Chief Executive Officer
|
|
Kenneth C. Frazier
|
(Principal Executive Officer; Director)
|
|
|
|
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/s/ Robert M. Davis
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Executive Vice President, Global Services,
and Chief Financial Officer
|
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Robert M. Davis
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(Principal Financial Officer)
|
|
|
|
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/s/ Rita A. Karachun
|
Senior Vice President Finance—Global Controller
|
|
Rita A. Karachun
|
(Principal Accounting Officer)
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/s/ Leslie A. Brun
|
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/s/ Paul B. Rothman
|
Leslie A. Brun
|
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Paul B. Rothman
|
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|
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/s/ Thomas R. Cech
|
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/s/ Patricia F. Russo
|
Thomas R. Cech
|
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Patricia F. Russo
|
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|
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/s/ Mary Ellen Coe
|
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/s/ Inge G. Thulin
|
Mary Ellen Coe
|
|
Inge G. Thulin
|
|
|
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/s/ Pamela J. Craig
|
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/s/ Wendell P. Weeks
|
Pamela J Craig
|
|
Wendell P. Weeks
|
|
|
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/s/ Thomas H. Glocer
|
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/s/ Peter C. Wendell
|
Thomas H. Glocer
|
|
Peter C. Wendell
|
|
|
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/s/ Rochelle B. Lazarus
|
|
|
Rochelle B. Lazarus
|
|
|
|
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|
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[Corporate Seal]
|
|
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/s/ Faye C. Brown
|
|
|
|
Faye C. Brown
Senior Assistant Secretary
|
By:
|
/s/ Kenneth C. Frazier
|
|
KENNETH C. FRAZIER
Chairman, President and Chief Executive Officer
|
By:
|
/s/ Robert M. Davis
|
|
Executive Vice President, Global Services,
and Chief Financial Officer
|
Dated: February 26, 2020
|
|
/s/ Kenneth C. Frazier
|
|
|
Name: KENNETH C. FRAZIER
|
|
|
Title: Chairman, President and Chief Executive Officer
|
Dated: February 26, 2020
|
|
/s/ Robert M. Davis
|
|
|
Name: ROBERT M. DAVIS
|
|
|
Title: Executive Vice President, Global Services,
and Chief Financial Officer
|