Merck Confirms 2012 Full-Year Guidance


March 6, 2012 8:00 am ET

Provides Guidance on First Quarter

Merck (NYSE: MRK), known as MSD outside the United States and Canada,
today re-confirmed its expectations for full-year 2012 non-GAAP EPS to
be between $3.75 and $3.85, and the 2012 GAAP EPS range to be $2.04 to
$2.30. The 2012 non-GAAP range excludes acquisition-related costs and
costs related to restructuring programs.

As previously noted, Merck expects full-year 2012 revenues to be at or
near 2011 levels on a constant currency basis. At current exchange
rates, sales would be unfavorably affected by about 2 to 3 percent.

The company is providing guidance about its expectations for the first
quarter of 2012 to help investors understand the impact of exchange in
the quarter. With a first quarter Euro exchange rate of approximately
$1.31/Euro, currency is expected to have approximately a 1 to 2 percent
unfavorable impact on sales in the first quarter. Merck expects
first-quarter non-GAAP EPS to be between $0.95 and $0.98, and the GAAP
EPS range to be $0.52 to $0.60.

In addition, the company expects full-year 2012 non-GAAP R&D expense to
be at approximately the same level as in 2011 and expects its full-year
2012 non-GAAP tax rate to be in the range of 23 to 25 percent.

A reconciliation of anticipated full-year and first-quarter 2012 EPS as
reported in accordance with GAAP to non-GAAP EPS that excludes certain
items is provided in the table below.(1)

$ in millions, except EPS amounts     Full Year 2012
GAAP EPS     $2.04 to $2.30


    1.71 to 1.55
Non-GAAP EPS that excludes items listed below     $3.75 to $3.85

Acquisition-related costs(3)

    $5,200 to $4,900
Restructuring costs     1,100 to 800
Net decrease (increase) in income before taxes     6,300 to 5,700
Estimated income tax (benefit) expense     (1,110) to (985)
Decrease (increase) in net income     $5,190 to $4,715
$ in millions, except EPS amounts   First Quarter 2012
GAAP EPS   $0.52 to $0.60
Difference2   0.43 to 0.38
Non-GAAP EPS that excludes items listed below   $0.95 to $0.98
Acquisition-related costs3   $1,300 to $1,200
Restructuring costs   300 to 200
Net decrease (increase) in income before taxes   1,600 to 1,400
Estimated income tax (benefit) expense   (285) to (240)
Decrease (increase) in net income   $1,315 to $1,160

About Merck

Today’s Merck is a global healthcare leader working to help the world be
well. Merck is known as MSD outside the United States and Canada.
Through our prescription medicines, vaccines, biologic therapies, and
consumer care and animal health products, we work with customers and
operate in more than 140 countries to deliver innovative health
solutions. We also demonstrate our commitment to increasing access to
healthcare through far-reaching policies, programs and partnerships. For
more information, visit
and connect with us on Twitter, Facebook and YouTube.

Forward-Looking Statement

This news release includes “forward-looking statements” within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Such statements may include,
but are not limited to, statements about the benefits of the merger
between Merck and Schering-Plough, including future financial and
operating results, the combined company’s plans, objectives,
expectations and intentions and other statements that are not historical
facts. Such statements are based upon the current beliefs and
expectations of Merck’s management and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward-looking statements.

The following factors, among others, could cause actual results to
differ from those set forth in the forward-looking statements: the
possibility that the expected synergies from the merger of Merck and
Schering-Plough will not be realized, or will not be realized within the
expected time period; the impact of pharmaceutical industry regulation
and health care legislation; the risk that the businesses will not be
integrated successfully; disruption from the merger making it more
difficult to maintain business and operational relationships; Merck’s
ability to accurately predict future market conditions; dependence on
the effectiveness of Merck’s patents and other protections for
innovative products; the risk of new and changing regulation and health
policies in the U.S. and internationally and the exposure to litigation
and/or regulatory actions.

Merck undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Additional factors that could cause results to differ
materially from those described in the forward-looking statements can be
found in Merck’s 2011 Annual Report on Form 10-K and the company’s other
filings with the Securities and Exchange Commission (SEC) available at
the SEC’s Internet site (

(1) Both non-GAAP and GAAP EPS guidance for 2012 assume the potential
exercise by AstraZeneca of its Shares Option in mid-2012 and include the
estimated associated impact on revenue and equity income from
affiliates. They do not reflect any gain on the potential transaction,
which would be reflected only in the company’s GAAP results.

(2) Represents the difference between calculated GAAP EPS and calculated
non-GAAP EPS which may be different than the amount calculated by
dividing the impact of the excluded items by the weighted average shares.

(3) Includes expenses for the amortization of intangible assets and
amortization of purchase accounting adjustments to inventories
recognized as a result of mergers and acquisitions, as well as
intangible asset impairment charges. Also includes integration and other
costs associated with mergers and acquisitions.

Ron Rogers, 908-423-6449
Alex Kelly, 908-423-5185

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