Merck Statement on Venezuelan Currency Devaluation

  Merck Statement on Venezuelan Currency Devaluation

Merck Confirms 2013 Full-Year Guidance and Provides Guidance on First Quarter

Business Wire

WHITEHOUSE STATION, N.J. -- February 13, 2013

Merck, known as MSD outside the United States and Canada, said today that it
has completed a preliminary assessment of the impact of the Venezuelan
government’s intention to devalue its currency effective Feb. 13, 2013.

As a result of the devaluation, the company will incur a one-time, after-tax
loss due to exchange of approximately $0.05 per share in the first quarter of
2013 related to the remeasurement of the local balance sheet at the date of
the devaluation. Also, the company expects the impact of the devaluation on
ongoing operations to be approximately $0.02 per share spread over the balance
of 2013.

Since Jan. 1, 2010, Venezuela has been designated hyperinflationary and, as a
result, local foreign operations are remeasured in U.S. dollars with the
impact recorded in income. On Feb. 8, 2013, the Venezuelan government declared
its intention to devalue its currency (bolívar fuerte). The official exchange
rate is expected to move from 4.30 VEF/$ to 6.30 VEF/$.

The effects of the devaluation do not change the company’s full year 2013 GAAP
(generally accepted accounting principles) or full year non-GAAP EPS (earnings
per share) guidance ranges.

The company is providing guidance about its expectations for the first quarter
of 2013, which includes the impact of the devaluation in the quarter. Merck
expects first-quarter non-GAAP EPS to be between $0.76 and $0.78, and the GAAP
EPS range to be $0.37 to $0.42. A reconciliation of anticipated first-quarter
2013 EPS as reported in accordance with GAAP to non-GAAP EPS that excludes
certain items is provided in the table below.

$ in millions, except EPS amounts                 First Quarter 2013
GAAP EPS                                           $0.37 to 0.42
Difference^1                                       0.39 to 0.36
Non-GAAP EPS that excludes items listed below ^2   $0.76 to $0,78

Acquisition-related costs^3                     $1,280 to $1,200
Restructuring costs                              175 to 125
Net decrease (increase) in income before taxes   1,455 to 1,325
Estimated income tax (benefit) expense           (255) to (225)
Decrease (increase) in net income                $1,200 to $1,100

^1 Represents the difference between calculated GAAP EPS and calculated
non-GAAP EPS, which may be different than the amount calculated by dividing
the impact of the excluded items by the weighted-average shares for the

^2 Merck is providing certain 2013 non-GAAP information that excludes certain
items because of the nature of these items and the impact they have on the
analysis of underlying business performance and trends. Management believes
that providing this information enhances investors' understanding of the
company's performance. This information should be considered in addition to,
but not in lieu of, information prepared in accordance with GAAP.

^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

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,
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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. These statements are based upon the current beliefs and
expectations of Merck’s management and are subject to significant risks and
uncertainties. If underlying assumptions prove inaccurate or risks or
uncertainties materialize, actual results may differ materially from those set
forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry
conditions and competition; general economic factors, including interest rate
and currency exchange rate fluctuations; the impact of pharmaceutical industry
regulation and health care legislation in the United States and
internationally; global trends toward health care cost containment;
technological advances, new products and patents attained by competitors;
challenges inherent in new product development, including obtaining regulatory
approval; Merck’s ability to accurately predict future market conditions;
manufacturing difficulties or delays; financial instability of international
economies and sovereign risk; dependence on the effectiveness of Merck’s
patents and other protections for innovative products; and the exposure to
litigation, including patent 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


Ron Rogers, 908-423-6449
Steve Cragle, 908-423-3461
Carol Ferguson, 908-423-4465
Justin Holko, 908-423-5088
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