Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Merck & Co. Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Federal	944)	928)	2,265)	74)	962)
Foreign	3,123)	2,435)	1,164)	1,273)	1,362)
State	(15)	48)	57)	(13)	53)
Current provision	4,052)	3,411)	3,486)	1,334)	2,377)
Federal	(1,475)	(1,559)	(1,510)	240)	(605)
Foreign	212)	(233)	71)	(77)	(40)
State	14)	(107)	(129)	24)	(23)
Deferred provision	(1,249)	(1,899)	(1,568)	187)	(668)
Taxes on income from continuing operations	2,803)	1,512)	1,918)	1,521)	1,709)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Current provision	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Merck & Co. Inc. current provision decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Deferred provision	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Merck & Co. Inc. deferred provision decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Taxes on income from continuing operations	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Merck & Co. Inc. taxes on income from continuing operations decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Merck & Co. Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
U.S. statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
Foreign earnings	-6.50%	-49.80%	-11.10%	-10.50%	-14.10%
Tax settlements and statute lapses	-2.80%	0.00%	-0.10%	-2.00%	-0.20%
R&D tax credit	-1.00%	-11.30%	-0.70%	-0.80%	-1.30%
Inventory donations	-0.40%	-3.50%	-0.30%	-0.30%	0.00%
State taxes	-0.20%	-6.20%	-0.70%	0.00%	0.80%
Charges for certain research and development asset acquisitions	2.80%	13.40%	0.00%	2.60%	7.40%
Valuation allowances	0.30%	3.70%	0.70%	0.70%	0.50%
Restructuring	0.30%	2.20%	0.10%	0.40%	1.20%
GILTI and the foreign-derived intangible income deduction	0.10%	-4.30%	2.80%	-0.50%	4.10%
Acquisition-related costs, including amortization	0.10%	2.20%	0.00%	0.10%	0.50%
Acquisition of Prometheus	0.00%	113.30%	0.00%	0.00%	0.00%
Other	0.40%	-0.70%	0.00%	0.30%	-0.50%
Effective tax rate	14.10%	80.00%	11.70%	11.00%	19.40%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Merck & Co. Inc. effective tax rate increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

Merck & Co. Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Product intangibles and licenses	71)	—)	—)	—)	141)
R&D capitalization	3,062)	2,099)	1,341)	—)	—)
Inventory related	84)	86)	43)	119)	43)
Undistributed foreign earnings	275)	—)	—)	—)	—)
Pensions and other postretirement benefits	224)	323)	372)	487)	834)
Compensation related	400)	357)	335)	301)	252)
Unrecognized tax benefits	152)	147)	91)	75)	117)
Net operating losses and other tax credit carryforwards	910)	868)	912)	867)	794)
Other	802)	713)	511)	434)	808)
Gross deferred income tax assets	5,980)	4,593)	3,605)	2,283)	2,989)
Valuation allowance	(710)	(656)	(599)	(287)	(433)
Deferred income tax assets	5,270)	3,937)	3,006)	1,996)	2,556)
Product intangibles and licenses	(978)	(1,308)	(2,575)	(2,933)	(1,250)
Inventory related	(413)	(370)	(423)	(370)	(335)
Accelerated depreciation	(645)	(626)	(657)	(589)	(588)
Undistributed foreign earnings	(371)	—)	—)	—)	—)
Equity investments	(90)	(73)	(92)	(335)	(175)
Pensions and other postretirement benefits	(400)	(249)	(284)	(338)	(248)
Other	(159)	(214)	(267)	(180)	(81)
Deferred income tax liabilities	(3,056)	(2,840)	(4,298)	(4,745)	(2,677)
Net deferred income taxes	2,214)	1,097)	(1,292)	(2,749)	(121)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Gross deferred income tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Merck & Co. Inc. gross deferred income tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred income tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Merck & Co. Inc. deferred income tax assets increased from 2022 to 2023 and from 2023 to 2024.
Net deferred income taxes	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Merck & Co. Inc. net deferred income taxes increased from 2022 to 2023 and from 2023 to 2024.

Merck & Co. Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
	Deferred income tax assets (included in Other assets)	3,601)	1,968)	503)	692)	894)
	Deferred income tax liabilities	1,387)	871)	1,795)	3,441)	1,015)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Deferred income tax assets (included in Other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Merck & Co. Inc. deferred income tax assets (included in Other assets) increased from 2022 to 2023 and from 2023 to 2024.
Deferred income tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Merck & Co. Inc. deferred income tax liabilities decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level.

Merck & Co. Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported)	117,106)	106,675)	109,160)	105,694)	91,588)
Less: Noncurrent deferred tax assets, net	3,601)	1,968)	503)	692)	894)
Total assets (adjusted)	113,505)	104,707)	108,657)	105,002)	90,694)
Adjustment to Total Liabilities
Total liabilities (as reported)	70,734)	69,040)	63,102)	67,437)	66,184)
Less: Noncurrent deferred tax liabilities, net	1,387)	871)	1,795)	3,441)	1,015)
Total liabilities (adjusted)	69,347)	68,169)	61,307)	63,996)	65,169)
Adjustment to Total Merck & Co., Inc. Stockholders’ Equity
Total Merck & Co., Inc. stockholders’ equity (as reported)	46,313)	37,581)	45,991)	38,184)	25,317)
Less: Net deferred tax assets (liabilities)	2,214)	1,097)	(1,292)	(2,749)	(121)
Total Merck & Co., Inc. stockholders’ equity (adjusted)	44,099)	36,484)	47,283)	40,933)	25,438)
Adjustment to Net Income Attributable To Merck & Co., Inc.
Net income attributable to Merck & Co., Inc. (as reported)	17,117)	365)	14,519)	13,049)	7,067)
Add: Deferred income tax expense (benefit)	(1,249)	(1,899)	(1,568)	187)	(668)
Net income attributable to Merck & Co., Inc. (adjusted)	15,868)	(1,534)	12,951)	13,236)	6,399)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Merck & Co. Inc., Financial Data: Reported vs. Adjusted

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Merck & Co. Inc., adjusted financial ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net Profit Margin
Reported net profit margin	26.68%	0.61%	24.49%	26.79%	14.72%
Adjusted net profit margin	24.73%	-2.55%	21.85%	27.18%	13.33%
Total Asset Turnover
Reported total asset turnover	0.55	0.56	0.54	0.46	0.52
Adjusted total asset turnover	0.57	0.57	0.55	0.46	0.53
Financial Leverage
Reported financial leverage	2.53	2.84	2.37	2.77	3.62
Adjusted financial leverage	2.57	2.87	2.30	2.57	3.57
Return on Equity (ROE)
Reported ROE	36.96%	0.97%	31.57%	34.17%	27.91%
Adjusted ROE	35.98%	-4.20%	27.39%	32.34%	25.16%
Return on Assets (ROA)
Reported ROA	14.62%	0.34%	13.30%	12.35%	7.72%
Adjusted ROA	13.98%	-1.47%	11.92%	12.61%	7.06%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Merck & Co. Inc. adjusted net profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Merck & Co. Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Merck & Co. Inc. adjusted financial leverage ratio increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Merck & Co. Inc. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Merck & Co. Inc. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Merck & Co. Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc.	17,117)	365)	14,519)	13,049)	7,067)
Sales	64,168)	60,115)	59,283)	48,704)	47,994)
Profitability Ratio
Net profit margin¹	26.68%	0.61%	24.49%	26.79%	14.72%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc.	15,868)	(1,534)	12,951)	13,236)	6,399)
Sales	64,168)	60,115)	59,283)	48,704)	47,994)
Profitability Ratio
Adjusted net profit margin²	24.73%	-2.55%	21.85%	27.18%	13.33%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Net profit margin = 100 × Net income attributable to Merck & Co., Inc. ÷ Sales
= 100 × 17,117 ÷ 64,168 = 26.68%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Sales
= 100 × 15,868 ÷ 64,168 = 24.73%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Merck & Co. Inc. adjusted net profit margin ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Sales	64,168)	60,115)	59,283)	48,704)	47,994)
Total assets	117,106)	106,675)	109,160)	105,694)	91,588)
Activity Ratio
Total asset turnover¹	0.55	0.56	0.54	0.46	0.52
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales	64,168)	60,115)	59,283)	48,704)	47,994)
Adjusted total assets	113,505)	104,707)	108,657)	105,002)	90,694)
Activity Ratio
Adjusted total asset turnover²	0.57	0.57	0.55	0.46	0.53

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Total asset turnover = Sales ÷ Total assets
= 64,168 ÷ 117,106 = 0.55

² Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 64,168 ÷ 113,505 = 0.57

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Merck & Co. Inc. adjusted total asset turnover ratio improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets	117,106)	106,675)	109,160)	105,694)	91,588)
Total Merck & Co., Inc. stockholders’ equity	46,313)	37,581)	45,991)	38,184)	25,317)
Solvency Ratio
Financial leverage¹	2.53	2.84	2.37	2.77	3.62
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	113,505)	104,707)	108,657)	105,002)	90,694)
Adjusted total Merck & Co., Inc. stockholders’ equity	44,099)	36,484)	47,283)	40,933)	25,438)
Solvency Ratio
Adjusted financial leverage²	2.57	2.87	2.30	2.57	3.57

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Financial leverage = Total assets ÷ Total Merck & Co., Inc. stockholders’ equity
= 117,106 ÷ 46,313 = 2.53

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 113,505 ÷ 44,099 = 2.57

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Merck & Co. Inc. adjusted financial leverage ratio increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc.	17,117)	365)	14,519)	13,049)	7,067)
Total Merck & Co., Inc. stockholders’ equity	46,313)	37,581)	45,991)	38,184)	25,317)
Profitability Ratio
ROE¹	36.96%	0.97%	31.57%	34.17%	27.91%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc.	15,868)	(1,534)	12,951)	13,236)	6,399)
Adjusted total Merck & Co., Inc. stockholders’ equity	44,099)	36,484)	47,283)	40,933)	25,438)
Profitability Ratio
Adjusted ROE²	35.98%	-4.20%	27.39%	32.34%	25.16%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ ROE = 100 × Net income attributable to Merck & Co., Inc. ÷ Total Merck & Co., Inc. stockholders’ equity
= 100 × 17,117 ÷ 46,313 = 36.96%

² Adjusted ROE = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Adjusted total Merck & Co., Inc. stockholders’ equity
= 100 × 15,868 ÷ 44,099 = 35.98%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Merck & Co. Inc. adjusted ROE deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Merck & Co., Inc.	17,117)	365)	14,519)	13,049)	7,067)
Total assets	117,106)	106,675)	109,160)	105,694)	91,588)
Profitability Ratio
ROA¹	14.62%	0.34%	13.30%	12.35%	7.72%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Merck & Co., Inc.	15,868)	(1,534)	12,951)	13,236)	6,399)
Adjusted total assets	113,505)	104,707)	108,657)	105,002)	90,694)
Profitability Ratio
Adjusted ROA²	13.98%	-1.47%	11.92%	12.61%	7.06%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ ROA = 100 × Net income attributable to Merck & Co., Inc. ÷ Total assets
= 100 × 17,117 ÷ 117,106 = 14.62%

² Adjusted ROA = 100 × Adjusted net income attributable to Merck & Co., Inc. ÷ Adjusted total assets
= 100 × 15,868 ÷ 113,505 = 13.98%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Merck & Co. Inc. adjusted ROA deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Merck & Co. Inc. (NYSE:MRK)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Merck & Co. Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Merck & Co. Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)