2024 Q1 Form 10-K Financial Statement

#000162828024006733 Filed on February 26, 2024

View on sec.gov

Income Statement

Concept 2024 Q1 2023 Q4 2023
Revenue $1.622B $1.598B $6.263B
YoY Change 5.46% 7.61% 1.44%
Cost Of Revenue $665.0M $666.0M $2.468B
YoY Change 14.66% 12.12% 7.59%
Gross Profit $957.0M $932.0M $3.795B
YoY Change -0.1% 4.6% -2.19%
Gross Profit Margin 59.0% 58.32% 60.59%
Selling, General & Admin $431.0M $422.0M $1.715B
YoY Change -0.92% -10.21% 0.65%
% of Gross Profit 45.04% 45.28% 45.19%
Research & Development $112.0M $132.0M $516.0M
YoY Change -13.18% -7.04% 9.55%
% of Gross Profit 11.7% 14.16% 13.6%
Depreciation & Amortization $32.00M $60.00M $120.0M
YoY Change 14.29% 15.38% 25.0%
% of Gross Profit 3.34% 6.44% 3.16%
Operating Expenses $543.0M $554.0M $2.229B
YoY Change -3.72% -9.48% 2.48%
Operating Profit $414.0M $378.0M $1.566B
YoY Change 5.08% 35.48% -8.15%
Interest Expense $131.0M -$146.0M -$569.0M
YoY Change -0.76% -3.31% -234.83%
% of Operating Profit 31.64% -38.62% -36.33%
Other Income/Expense, Net
YoY Change
Pretax Income $236.0M $104.0M $673.0M
YoY Change 0.43% -6.31% -40.02%
Income Tax $35.00M -$442.0M -$350.0M
% Of Pretax Income 14.83% -425.0% -52.01%
Net Earnings $201.0M $546.0M $1.023B
YoY Change 13.56% 405.56% 11.56%
Net Earnings / Revenue 12.39% 34.17% 16.33%
Basic Earnings Per Share $0.78 $4.01
Diluted Earnings Per Share $0.78 $2.13 $3.99
COMMON SHARES
Basic Shares Outstanding 255.6M shares 255.6M shares 255.2M shares
Diluted Shares Outstanding 258.4M shares 256.3M shares

Balance Sheet

Concept 2024 Q1 2023 Q4 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $575.0M $693.0M $693.0M
YoY Change 25.27% -1.84% -1.84%
Cash & Equivalents $575.0M $693.0M $693.0M
Short-Term Investments
Other Short-Term Assets $811.0M $756.0M $643.0M
YoY Change 7.42% 1.2% 0.94%
Inventory $1.263B $1.315B $1.315B
Prepaid Expenses
Receivables $1.547B $1.744B $1.744B
Other Receivables $0.00 $0.00 $113.0M
Total Short-Term Assets $4.196B $4.508B $4.508B
YoY Change 11.01% 14.68% 14.68%
LONG-TERM ASSETS
Property, Plant & Equipment $1.180B $1.183B $1.356B
YoY Change 11.85% 16.21% 9.98%
Goodwill $4.603B $4.603B
YoY Change 0.0% 0.0%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $1.194B $1.058B $1.058B
YoY Change 69.6% 96.29% 96.29%
Total Long-Term Assets $7.695B $7.550B $7.550B
YoY Change 10.2% 7.49% 7.49%
TOTAL ASSETS
Total Short-Term Assets $4.196B $4.508B $4.508B
Total Long-Term Assets $7.695B $7.550B $7.550B
Total Assets $11.89B $12.06B $12.06B
YoY Change 10.48% 10.07% 10.07%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $955.0M $1.314B $1.314B
YoY Change -4.12% 16.08% 16.08%
Accrued Expenses $1.385B $1.389B $1.389B
YoY Change 20.43% 16.92% 16.92%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $9.000M $9.000M $9.000M
YoY Change 12.5% 12.5% 12.5%
Total Short-Term Liabilities $2.545B $2.918B $2.918B
YoY Change 8.48% 16.16% 16.16%
LONG-TERM LIABILITIES
Long-Term Debt $8.705B $8.751B $8.751B
YoY Change 0.02% -1.73% -1.73%
Other Long-Term Liabilities $549.0M $412.0M $412.0M
YoY Change 30.4% 0.24% 0.24%
Total Long-Term Liabilities $9.254B $9.163B $9.163B
YoY Change 1.42% -1.64% -1.64%
TOTAL LIABILITIES
Total Short-Term Liabilities $2.545B $2.918B $2.918B
Total Long-Term Liabilities $9.254B $9.163B $9.163B
Total Liabilities $11.84B $12.13B $12.13B
YoY Change 3.25% 2.54% 2.37%
SHAREHOLDERS EQUITY
Retained Earnings $573.0M $443.0M
YoY Change -378.16% -233.84%
Common Stock $52.00M $28.00M
YoY Change 1633.33% 833.33%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $48.00M -$70.00M -$70.00M
YoY Change
Total Liabilities & Shareholders Equity $11.89B $12.06B $12.06B
YoY Change 10.48% 10.07% 10.07%

Cashflow Statement

Concept 2024 Q1 2023 Q4 2023
OPERATING ACTIVITIES
Net Income $201.0M $546.0M $1.023B
YoY Change 13.56% 405.56% 11.56%
Depreciation, Depletion And Amortization $32.00M $60.00M $120.0M
YoY Change 14.29% 15.38% 25.0%
Cash From Operating Activities $76.00M $397.0M $799.0M
YoY Change -33.33% 48.69% -6.88%
INVESTING ACTIVITIES
Capital Expenditures $46.00M $79.00M $251.0M
YoY Change 0.0% 21.54% 28.06%
Acquisitions
YoY Change
Other Investing Activities -$50.00M -$2.000M -$1.000M
YoY Change -150.0% -99.15%
Cash From Investing Activities -$96.00M -$81.00M -$260.0M
YoY Change 77.78% 32.79% -38.1%
FINANCING ACTIVITIES
Cash Dividend Paid $70.00M $294.0M
YoY Change -4.11% 1.38%
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $2.000M $338.0M
YoY Change -99.21% 212.96%
Cash From Financing Activities -$74.00M -77.00M -569.0M
YoY Change -77.3% -6.1% 31.41%
NET CHANGE
Cash From Operating Activities $76.00M 397.0M 799.0M
Cash From Investing Activities -$96.00M -81.00M -260.0M
Cash From Financing Activities -$74.00M -77.00M -569.0M
Net Change In Cash -$118.0M 239.0M -$13.00M
YoY Change -52.23% 92.74% -58.06%
FREE CASH FLOW
Cash From Operating Activities $76.00M $397.0M $799.0M
Capital Expenditures $46.00M $79.00M $251.0M
Free Cash Flow $30.00M $318.0M $548.0M
YoY Change -55.88% 57.43% -17.22%

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Background and Nature of Operations<div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Organon &amp; Co. ("Organon" or the "Company") is a global health care company with a focus on improving the health of women throughout their lives. Organon develops and delivers innovative health solutions through a portfolio of prescription therapies and medical devices within women's health, biosimilars and established brands (the "Organon Products"). Organon has a portfolio of more than 60 medicines and products across a range of therapeutic areas. The Company sells these products through various channels including drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. The Company operates six manufacturing facilities, which are located in Belgium, Brazil, Indonesia, Mexico, the Netherlands and the United Kingdom. Unless otherwise indicated, trademarks appearing in italics throughout this document are trademarks of, or are used under license by, the Organon group of companies.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company's operations include the following product portfolios:</span></div><div style="text-align:justify;text-indent:45pt"><span><br/></span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;padding-left:14.5pt">Women's Health</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: Organon's women's health products are sold by prescription primarily in two therapeutic areas, contraception, with key brands such as </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Nexplanon®</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (etonogestrel implant) (sold as </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Implanon NXT</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">™ in some countries outside the United States) and </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">NuvaRing® </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(etonogestrel / ethinyl estradiol vaginal ring), and fertility, with key brands such as </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Follistim AQ®</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (follitropin beta injection) (marketed in most countries outside the United States as </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Puregon</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">™). </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Nexplanon</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> is a long-acting reversible contraceptive, which is a class of contraceptives that is recognized as one of the most effective types of hormonal contraception available to patients with a low long-term average cost. Other women's health products include the </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Jada</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">® System, which is intended to provide control and treatment of abnormal postpartum uterine bleeding or hemorrhage when conservative management is warranted and a license from Daré Biosciences for the global commercial rights to </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Xaciato</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">® (clindamycin phosphate vaginal gel, 2%), an FDA-approved medication for the treatment of bacterial vaginosis ("BV") in females 12 years of age and older. In October 2023, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Xaciato </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">was launched in the United States.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;padding-left:14.5pt">Biosimilars</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: Organon's current portfolio spans across immunology and oncology treatments. Organon's oncology biosimilars; </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Ontruzant®</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (trastuzumab-dttb) and </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Aybintio</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;position:relative;top:-3.5pt;vertical-align:baseline">TM 1</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (bevacizumab), have been launched in more than 20 countries and Organon's immunology biosimilars; </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Brenzys</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;position:relative;top:-3.5pt;vertical-align:baseline">TM 1</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (etarnarcept), </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Renflexi</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">s</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">®</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (infliximab-abda) and </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Hadlima®</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (adalimumab-bwwd), have been launched in five countries. All five biosimilars in Organon's portfolio have launched in Canada, and three biosimilars;</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%"> Ontruzant</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Renflexis</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> and </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Hadlima</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> have been launched in the United States.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%;padding-left:14.5pt">Established Brands</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: Organon has a portfolio of established brands, which generally are beyond market exclusivity, including leading brands in cardiovascular, respiratory, dermatology and non-opioid pain management. A number of Organon's established brands lost exclusivity years ago and have faced generic competition for some time.</span></div>
CY2023Q4 ogn Number Of Medicines And Products
NumberOfMedicinesAndProducts
60 medicineandproduct
CY2023Q4 ogn Number Of Manufacturing Facilities
NumberOfManufacturingFacilities
6 manufacturingfacility
CY2023 us-gaap Basis Of Accounting
BasisOfAccounting
Basis of Presentation<div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 2, 2021, Organon and Merck &amp; Co. ("Merck") entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement"). Pursuant to the Separation and Distribution Agreement, Merck agreed to spin off the Organon Products into Organon, a new, publicly-traded company (the "Separation"). On June 2, 2021, the Company became a standalone publicly traded company, and its financial statements are now presented on a consolidated basis. Prior to the Separation on June 2, 2021, the Company's historical combined financial statements were prepared on a standalone basis and were derived from Merck's consolidated financial statements and accounting records. The financial statements for all periods presented, including the historical results of the Company prior to June 2, 2021, are now referred to as "Consolidated Financial Statements," and have been prepared pursuant to the rules and regulations for reporting on Form 10-K.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The historical results prior to Separation included certain Merck non-U.S. legal entities that were conveyed to Organon in connection with the Separation (collectively, the "Transferred Entities" and each, a "Transferred Entity") and included operations related to other Merck products that were retained by Merck ("Merck Retained Products"). The Merck Retained Products business of the Transferred Entities was contributed by the Company to Merck and its affiliates and any remaining assets and liabilities were transferred as of June 2, 2021. Accordingly, the historical results of operations of the Merck Retained Products have been reflected as discontinued operations in these Consolidated Financial Statements.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Periods Prior to Separation</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The assets, liabilities, revenue and expenses of the Company were reflected in the Consolidated Financial Statements on a historical cost basis, as included in the consolidated financial statements of Merck, using the historical accounting policies </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">applied by Merck. The Consolidated Financial Statements did not purport to reflect what the Company's results of operations, comprehensive income, financial position, equity or cash flows would have been had the Company operated as a standalone public company during the periods presented. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Consolidated Financial Statements were prepared following a legal entity approach, which resulted in the inclusion of the following:</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">Certain assets and liabilities, results of operations and cash flows attributable to the sales of Organon Products that were contributed to Organon prior to the consummation of the Separation.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">The Transferred Entities, which have historically included the results from the sales of both Organon Products and the Merck Retained Products. Each Transferred Entity's historical operations, including its results of operations, assets and liabilities, and cash flows have been fully reflected in the Consolidated Financial Statements.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">In contemplation of the Separation, the Merck Retained Products business of the Transferred Entities was distributed to Merck and its affiliates ("MRP Distribution") and, accordingly, the historical results of operations, assets and liabilities, and the cash flows of the Merck Retained Products for such Transferred Entities are reflected as discontinued operations.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company's businesses had historically functioned together with the other businesses controlled by Merck. Accordingly, the Company relied on Merck's corporate and other support functions for its business. Therefore, for the period prior to the Separation, certain corporate and shared costs were allocated to the Company based on a specific identification basis or, when specific identification was not practicable, a proportional cost allocation method, including:</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(i)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:8.57pt">expenses related to Merck support functions, including expenses for facilities, executive oversight, treasury, finance, legal, human resources, shared services, compliance, procurement, information technology and other corporate functions.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(ii)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:5.8pt">certain manufacturing and supply costs incurred by Merck's manufacturing division, including facility management, distribution, logistics, planning and global quality. </span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(iii)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:3.03pt">certain costs incurred by Merck's human health division in relation to selling and marketing activities, and related administrative support functions, that are not routinely allocated to therapeutic areas.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(iv)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:3.57pt">certain costs incurred by Merck's research laboratories for activities related to drug discovery and development, as well as medical and regulatory affairs.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(v)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:6.34pt">restructuring costs (see Note 8 "Restructuring") and stock-based compensation expenses (see Note 7 "Stock-Based Compensation Plans"); and</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(vi)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:3.57pt">certain compensation expenses maintained on a centralized basis such as certain employee benefit expenses.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Management believes these cost allocations were a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Company during the period prior to the Separation, though the allocations may not be indicative of the actual costs that would have been incurred had the Company operated as a standalone public company. Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by Company's employees, and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Merck maintained various employee benefit plans in which the Company's employees participated during periods prior to the Separation, a portion of the costs associated with these plans was included in the Company's Consolidated Financial Statements. Certain pension assets and obligations were transferred by Merck into legal entities established to operate the Organon Products business (the "Organon Entities") that are the plan sponsor.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Merck utilized a centralized approach to cash management and the financing of its operations. Cash generated by the Company was routinely transferred into accounts managed by Merck's centralized treasury function and cash disbursements for the Company's operations prior to the Separation were funded as needed by Merck. Cash and cash equivalents of the Organon Entities and the Transferred Entities were reflected in the Company's Consolidated Balance Sheet. Balances held by the Organon Entities and the Transferred Entities with Merck for cash transfers and loans were reflected as </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Due to related party</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> prior to Separation. All other cash, cash equivalents, short-term investments and related transfers between Merck and the Company were generally held centrally through accounts controlled and maintained by Merck and were not specifically identifiable to the Company. Accordingly, such balances were accounted for through</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%"> Net investment from Merck &amp; Co., Inc</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">. Merck's third-party debt and related interest expense were not attributed to the Company because the Company was not the legal obligor of the debt and the borrowings were not specifically identifiable to the Company.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">For the Organon Entities and the Transferred Entities, transactions with Merck affiliates that were included in the Consolidated Statement of Income and related balances were reflected as </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Due to related party </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">or </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Due from related party</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> in the Consolidated Balance Sheet, as applicable. Other balances between the Company and Merck were considered to be effectively settled in the Consolidated Financial Statements at the time the transactions were recorded. See Note 19 "Third-Party Arrangements and Related Party Disclosures" for additional details.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As the separate legal entities that made up the Company's business were not historically held by a single legal entity, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Net investment from Merck &amp; Co., Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> was shown in lieu of stockholders' equity in these Consolidated Financial Statements. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Net investment from Merck &amp; Co., Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> represented Merck's interest in the recorded assets of the Company and the cumulative investment by Merck in the Company through the date of Separation, inclusive of operating results.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Income tax expense and tax balances in the Consolidated Financial Statements were calculated on a separate tax return basis. The Company's operations are included in the tax returns of certain Organon Entities, Transferred Entities or the respective Merck entities of which the Company's business was a part.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">As of Separation Date</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Certain assets and liabilities, including accounts receivables, inventories and trade payables included on the Consolidated Balance Sheet prior to the Separation, have been retained by Merck post-Separation and therefore were transferred to Merck through </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Net investment from Merck &amp; Co., Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> in the Company's Consolidated Financial Statements. As part of the Separation, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Net investment from Merck &amp; Co., Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> was reclassified to </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Common Stock</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> and </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Accumulated Deficit</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">In connection with the Separation, additional pension assets and obligations were transferred to Organon through </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:112%">Net investment from Merck &amp; Co., Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">, and the Company recorded these in the Consolidated Balance Sheet. See Note 15 "Pension and Other Postretirement Benefit Plans" for details. Additionally, stock-based awards were converted in accordance with the employee matters agreement (the "Employee Matters Agreement") entered into between Organon and Merck in connection with the spinoff. See Note 7 "Stock-Based Compensation Plans" for details.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Periods Post Separation</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Following the Separation, certain functions continue to be provided by Merck under the Transition Services Agreement or are being performed using the Company's own resources or third-party service providers. Additionally, under manufacturing and supply agreements, the Company manufactures certain products for Merck or its applicable affiliate, and Merck manufactures certain products for the Company or its applicable affiliate. The Company incurred certain costs in its establishment as a standalone public company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As a standalone entity, the Company files tax returns on its own behalf, and tax balances and effective income tax rate may differ from the amounts reported in the historical periods. As of June 2, 2021 and in connection with the Separation, the Company adjusted its deferred tax balances and computed its related tax provision to reflect operations as a standalone entity.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">All intercompany transactions and accounts within Organon have been eliminated.</span></div>
CY2023Q4 ogn Accrual For Chargebacks
AccrualForChargebacks
87000000 usd
CY2023Q4 ogn Accrual For Rebates
AccrualForRebates
417000000 usd
CY2022Q4 ogn Accrual For Chargebacks
AccrualForChargebacks
78000000 usd
CY2022Q4 ogn Accrual For Rebates
AccrualForRebates
307000000 usd
CY2023 ogn Revenue Recognition Goods Goods Return Period After To Expiration Date
RevenueRecognitionGoodsGoodsReturnPeriodAfterToExpirationDate
P12M
CY2021 us-gaap Income Loss From Discontinued Operations Net Of Tax Per Diluted Share
IncomeLossFromDiscontinuedOperationsNetOfTaxPerDilutedShare
0
CY2023 us-gaap Earnings Per Share Diluted
EarningsPerShareDiluted
3.99
CY2023Q4 us-gaap Value Added Tax Receivable
ValueAddedTaxReceivable
113000000 usd
CY2022Q4 us-gaap Value Added Tax Receivable
ValueAddedTaxReceivable
110000000 usd
CY2023Q4 us-gaap Sales And Excise Tax Payable Current And Noncurrent
SalesAndExciseTaxPayableCurrentAndNoncurrent
18000000 usd
CY2022Q4 us-gaap Sales And Excise Tax Payable Current And Noncurrent
SalesAndExciseTaxPayableCurrentAndNoncurrent
9000000 usd
CY2023 us-gaap Depreciation
Depreciation
120000000 usd
CY2022 us-gaap Depreciation
Depreciation
96000000 usd
CY2021 us-gaap Depreciation
Depreciation
92000000 usd
CY2023 us-gaap Advertising Expense
AdvertisingExpense
209000000 usd
CY2022 us-gaap Advertising Expense
AdvertisingExpense
255000000 usd
CY2021 us-gaap Advertising Expense
AdvertisingExpense
236000000 usd
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The presentation of these Consolidated Financial Statements and accompanying notes in conformity with U.S. GAAP require management to make estimates and assumptions that affect the amounts reported. Estimates are used in determining such items as provisions for sales discounts and returns, depreciable and amortizable lives, recoverability of inventories, amounts recorded for contingencies, environmental liabilities, pension and other postretirement benefit plan assumptions, stock-based compensation assumptions, restructuring costs, impairments of long-lived assets (including intangible assets and goodwill), investments, and taxes on income. Additionally, estimates are used in acquisitions, including initial fair value determinations of assets and liabilities (primarily IPR&amp;D, intangible assets and contingent consideration), as well as subsequent fair value measurements. <div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">For periods prior to Separation, estimates were used in determining the allocation of costs and expenses from Merck, and were used in determining such items as provisions for sales discounts and returns, depreciable and amortizable lives, recoverability of inventories, valuation of goodwill and intangibles, amounts recorded for contingencies, environmental liabilities and other reserves, pension and stock-based compensation assumptions, restructuring costs, and taxes on income. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Because of the uncertainty inherent in such estimates, actual results may differ from these estimates.</span></div>
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