v3.25.4
Loans Payable, Long-Term Debt and Leases
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Loans Payable, Long-Term Debt and Leases Loans Payable, Long-Term Debt and Leases
Loans Payable
Loans payable at December 31, 2025 included $2.3 billion of notes due in 2026, $215 million of long-dated notes that are subject to repayment at the option of the holders, and $63 million under a foreign financing facility. Loans payable at December 31, 2024 included $2.5 billion of notes due in 2025 and $149 million of long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of commercial paper borrowings was 4.32% and 5.18% for the years ended December 31, 2025 and 2024, respectively. There were no commercial paper borrowings outstanding at December 31, 2025 or 2024.
Long-Term Debt
Long-term debt at December 31 consisted of:
20252024
2.15% notes due 2031
$1,991 $1,989 
2.75% notes due 2051
1,981 1,980 
3.70% notes due 2045
1,981 1,980 
3.40% notes due 2029
1,744 1,742 
4.95% notes due 2035
1,739 — 
4.50% notes due 2033
1,553 1,509 
1.70% notes due 2027
1,498 1,497 
5.00% notes due 2053
1,492 1,482 
4.75% notes due 2035
1,486 — 
2.90% notes due 2061
1,485 1,484 
5.55% notes due 2055
1,477 — 
4.00% notes due 2049
1,475 1,474 
1.45% notes due 2030
1,242 1,240 
4.15% notes due 2043
1,241 1,240 
5.70% notes due 2055
1,235 — 
2.45% notes due 2050
1,217 1,216 
1.90% notes due 2028
997 996 
4.55% notes due 2032
995 — 
4.45% notes due 2032
994 — 
4.15% notes due 2031
994 — 
3.25% euro-denominated notes due 2032
993 880 
3.50% euro-denominated notes due 2037
990 877 
5.15% notes due 2063
988 987 
3.90% notes due 2039
988 987 
3.70% euro-denominated notes due 2044
988 876 
2.35% notes due 2040
987 986 
3.75% euro-denominated notes due 2054
985 873 
5.70% notes due 2065
984 — 
4.30% notes due 2030
747 746 
3.85% notes due 2027
747 — 
3.85% notes due 2029
746 — 
4.15% notes due 2030
745 — 
5.50% notes due 2046
742 — 
4.90% notes due 2044
740 740 
6.50% notes due 2033
698 702 
1.375% euro-denominated notes due 2036
583 517 
2.50% euro-denominated notes due 2034
583 517 
4.05% notes due 2028
499 498 
Floating rate notes due 2027 (1)
499 — 
Floating rate notes due 2029 (2)
498 — 
3.60% notes due 2042
493 492 
6.55% notes due 2037
402 404 
5.75% notes due 2036
339 339 
5.95% debentures due 2028
308 307 
5.85% notes due 2039
271 271 
6.40% debentures due 2028
251 251 
1.875% euro-denominated notes due 2026
— 1,041 
0.75% notes due 2026
— 998 
6.30% debentures due 2026
— 135 
Other139 209 
$46,750 $34,462 
(1)    Floating rate is compounded SOFR plus 46 bps, which at December 31, 2025 was 4.16%.
(2)    Floating rate is compounded SOFR plus 57 bps, which at December 31, 2025 was 4.35%.
Other (as presented in the table above) includes borrowings at variable rates that resulted in effective interest rates of 4.18% and 5.02% for 2025 and 2024, respectively.
With the exception of the 6.30% debentures due 2026, the notes listed in the table above are redeemable in whole or in part, at Merck’s option at any time, at varying redemption prices. Effective as of November 3, 2009, the Company executed a full and unconditional guarantee of the then existing debt of its subsidiary Merck Sharp & Dohme Corp. (MSD, now Merck Sharp & Dohme LLC) and MSD executed a full and unconditional guarantee of the then existing debt of the Company (excluding commercial paper), including for payments of principal and interest. These guarantees do not extend to debt issued subsequent to that date.
In December 2025, the Company issued $8.0 billion aggregate principal amount of senior unsecured notes consisting of $500 million of floating rate notes due 2029, $750 million of 3.85% notes due 2029, $1.0 billion of 4.15% notes due 2031, $1.0 billion of 4.45% notes due 2032, $1.5 billion of 4.75% notes due 2035, $750 million of 5.50% notes due 2046, $1.5 billion of 5.55% notes due 2055, and $1.0 billion of 5.70% notes due 2065. The Company used the net proceeds from the offering for general corporate purposes, including to fund a portion of the approximately $9.2 billion cash consideration for the January 2026 acquisition of Cidara, including related fees and expenses (see Note 3).
In September 2025, the Company issued $6.0 billion aggregate principal amount of senior unsecured notes consisting of $500 million of floating rate notes due 2027, $750 million of 3.85% notes due 2027, $750 million of 4.15% notes due 2030, $1.0 billion of 4.55% notes due 2032, $1.75 billion of 4.95% notes due 2035, and $1.25 billion of 5.70% notes due 2055. The Company used the net proceeds from the offering for general corporate purposes, including to fund a portion of the $10.4 billion cash consideration for the October 2025 acquisition of Verona Pharma, including related fees and expenses (see Note 3).
In May 2024, MSD Netherlands Capital B.V., a wholly owned finance subsidiary of Merck, completed a registered public offering of €3.4 billion in aggregate principal amount of euro-dominated senior notes comprised of €850 million of 3.25% senior notes due 2032, €850 million of 3.50% senior notes due 2037, €850 million of 3.70% senior notes due 2044, and €850 million of 3.75% senior notes due 2054 (collectively, the Euronotes). The Company has fully and unconditionally guaranteed all of MSD Netherlands Capital B.V.’s obligations under the Euronotes and no other subsidiary of the Company will guarantee these obligations. MSD Netherlands Capital B.V. is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X of the Exchange Act, with no assets or operations other than those related to the issuance, administration and repayment of the Euronotes. The financial condition, results of operations and cash flows of MSD Netherlands Capital B.V. are consolidated in the financial statements of the Company. The net cash proceeds from the offering were used for general corporate purposes.
Certain of the Company’s borrowings require that Merck comply with covenants and, at December 31, 2025, the Company was in compliance with these covenants.
The aggregate maturities of long-term debt for each of the next five years are as follows: 2026, $2.6 billion; 2027, $2.7 billion; 2028, $2.1 billion; 2029, $3.0 billion; 2030, $2.7 billion. Interest payments related to these debt obligations are as follows: 2026, $1.8 billion; 2027, $1.8 billion; 2028, $1.7 billion; 2029, $1.6 billion; 2030, $1.5 billion.
The Company has a $6.0 billion credit facility that matures in May 2030. The facility provides backup liquidity for the Company’s commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this facility.
Leases
The Company has operating leases primarily for manufacturing facilities, research and development facilities, corporate offices, employee housing, vehicles and certain equipment. The Company determines if an arrangement is a lease at inception. When evaluating contracts for embedded leases, the Company exercises judgment to determine if there is an explicit or implicit identified asset in the contract and if Merck controls the use of that asset. Embedded leases, primarily associated with contract manufacturing organizations, are immaterial. The lease term includes options to extend or terminate the lease when it is reasonably certain that Merck will exercise that option. Real estate leases for facilities have an average remaining lease term of approximately seven years, which include options to extend the lease term for periods ranging up to five years where applicable. Vehicle leases are generally in effect for four years. The Company elected to exclude short-term leases (leases with an initial term of 12 months or less) from the lease assets and liabilities on the balance sheet.
Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since the Company’s leases do not have a readily determinable implicit discount rate, the Company uses
its incremental borrowing rate to calculate the present value of lease payments by asset class. On a quarterly basis, an updated incremental borrowing rate is determined based on the average remaining lease term of each asset class and the Company’s pretax cost of debt for that same term. The updated rates for each asset class are applied prospectively to new leases. The Company does not separate lease components (e.g., payments for rent, real estate taxes and insurance costs) from non-lease components (e.g. common-area maintenance costs) in the event that the agreement contains both. Merck includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability (if the non-lease components are fixed). For vehicle leases and employee housing, the Company applies a portfolio approach to account for the operating lease assets and liabilities.
Certain of the Company’s lease agreements contain variable lease payments that are adjusted periodically for inflation or for actual operating expense true-ups compared with estimated amounts; however, these amounts are immaterial. Sublease income was immaterial and there were no sale and leaseback transactions in 2025. Merck’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease cost was $423 million in 2025, $348 million in 2024 and $339 million in 2023. Cash paid for amounts included in the measurement of operating lease liabilities was $349 million in 2025, $357 million in 2024 and $347 million in 2023. Operating lease assets obtained in exchange for lease obligations were $162 million in 2025, $47 million in 2024 and $122 million in 2023.
Supplemental balance sheet information related to operating leases is as follows:
December 3120252024
Assets
Other Assets (1)
$1,507 $1,370 
Liabilities
Accrued and other current liabilities294 282 
Other Noncurrent Liabilities901 877 
$1,195 $1,159 
Weighted-average remaining lease term (years)7.06.0
Weighted-average discount rate3.5 %3.2 %
(1)    Includes prepaid leases that have no related lease liability.
Maturities of operating leases liabilities are as follows:
2026$335 
2027261 
2028204 
2029125 
2030103 
Thereafter415 
Total lease payments1,443 
Less: Imputed interest248 
$1,195 
At December 31, 2025, the Company had entered into additional real estate leases that had not yet commenced; the obligations associated with these leases total $400 million, of which $300 million relates to a lease that will commence in February 2026 and has a lease term of 20 years.
Loans Payable, Long-Term Debt and Leases Loans Payable, Long-Term Debt and Leases
Loans Payable
Loans payable at December 31, 2025 included $2.3 billion of notes due in 2026, $215 million of long-dated notes that are subject to repayment at the option of the holders, and $63 million under a foreign financing facility. Loans payable at December 31, 2024 included $2.5 billion of notes due in 2025 and $149 million of long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of commercial paper borrowings was 4.32% and 5.18% for the years ended December 31, 2025 and 2024, respectively. There were no commercial paper borrowings outstanding at December 31, 2025 or 2024.
Long-Term Debt
Long-term debt at December 31 consisted of:
20252024
2.15% notes due 2031
$1,991 $1,989 
2.75% notes due 2051
1,981 1,980 
3.70% notes due 2045
1,981 1,980 
3.40% notes due 2029
1,744 1,742 
4.95% notes due 2035
1,739 — 
4.50% notes due 2033
1,553 1,509 
1.70% notes due 2027
1,498 1,497 
5.00% notes due 2053
1,492 1,482 
4.75% notes due 2035
1,486 — 
2.90% notes due 2061
1,485 1,484 
5.55% notes due 2055
1,477 — 
4.00% notes due 2049
1,475 1,474 
1.45% notes due 2030
1,242 1,240 
4.15% notes due 2043
1,241 1,240 
5.70% notes due 2055
1,235 — 
2.45% notes due 2050
1,217 1,216 
1.90% notes due 2028
997 996 
4.55% notes due 2032
995 — 
4.45% notes due 2032
994 — 
4.15% notes due 2031
994 — 
3.25% euro-denominated notes due 2032
993 880 
3.50% euro-denominated notes due 2037
990 877 
5.15% notes due 2063
988 987 
3.90% notes due 2039
988 987 
3.70% euro-denominated notes due 2044
988 876 
2.35% notes due 2040
987 986 
3.75% euro-denominated notes due 2054
985 873 
5.70% notes due 2065
984 — 
4.30% notes due 2030
747 746 
3.85% notes due 2027
747 — 
3.85% notes due 2029
746 — 
4.15% notes due 2030
745 — 
5.50% notes due 2046
742 — 
4.90% notes due 2044
740 740 
6.50% notes due 2033
698 702 
1.375% euro-denominated notes due 2036
583 517 
2.50% euro-denominated notes due 2034
583 517 
4.05% notes due 2028
499 498 
Floating rate notes due 2027 (1)
499 — 
Floating rate notes due 2029 (2)
498 — 
3.60% notes due 2042
493 492 
6.55% notes due 2037
402 404 
5.75% notes due 2036
339 339 
5.95% debentures due 2028
308 307 
5.85% notes due 2039
271 271 
6.40% debentures due 2028
251 251 
1.875% euro-denominated notes due 2026
— 1,041 
0.75% notes due 2026
— 998 
6.30% debentures due 2026
— 135 
Other139 209 
$46,750 $34,462 
(1)    Floating rate is compounded SOFR plus 46 bps, which at December 31, 2025 was 4.16%.
(2)    Floating rate is compounded SOFR plus 57 bps, which at December 31, 2025 was 4.35%.
Other (as presented in the table above) includes borrowings at variable rates that resulted in effective interest rates of 4.18% and 5.02% for 2025 and 2024, respectively.
With the exception of the 6.30% debentures due 2026, the notes listed in the table above are redeemable in whole or in part, at Merck’s option at any time, at varying redemption prices. Effective as of November 3, 2009, the Company executed a full and unconditional guarantee of the then existing debt of its subsidiary Merck Sharp & Dohme Corp. (MSD, now Merck Sharp & Dohme LLC) and MSD executed a full and unconditional guarantee of the then existing debt of the Company (excluding commercial paper), including for payments of principal and interest. These guarantees do not extend to debt issued subsequent to that date.
In December 2025, the Company issued $8.0 billion aggregate principal amount of senior unsecured notes consisting of $500 million of floating rate notes due 2029, $750 million of 3.85% notes due 2029, $1.0 billion of 4.15% notes due 2031, $1.0 billion of 4.45% notes due 2032, $1.5 billion of 4.75% notes due 2035, $750 million of 5.50% notes due 2046, $1.5 billion of 5.55% notes due 2055, and $1.0 billion of 5.70% notes due 2065. The Company used the net proceeds from the offering for general corporate purposes, including to fund a portion of the approximately $9.2 billion cash consideration for the January 2026 acquisition of Cidara, including related fees and expenses (see Note 3).
In September 2025, the Company issued $6.0 billion aggregate principal amount of senior unsecured notes consisting of $500 million of floating rate notes due 2027, $750 million of 3.85% notes due 2027, $750 million of 4.15% notes due 2030, $1.0 billion of 4.55% notes due 2032, $1.75 billion of 4.95% notes due 2035, and $1.25 billion of 5.70% notes due 2055. The Company used the net proceeds from the offering for general corporate purposes, including to fund a portion of the $10.4 billion cash consideration for the October 2025 acquisition of Verona Pharma, including related fees and expenses (see Note 3).
In May 2024, MSD Netherlands Capital B.V., a wholly owned finance subsidiary of Merck, completed a registered public offering of €3.4 billion in aggregate principal amount of euro-dominated senior notes comprised of €850 million of 3.25% senior notes due 2032, €850 million of 3.50% senior notes due 2037, €850 million of 3.70% senior notes due 2044, and €850 million of 3.75% senior notes due 2054 (collectively, the Euronotes). The Company has fully and unconditionally guaranteed all of MSD Netherlands Capital B.V.’s obligations under the Euronotes and no other subsidiary of the Company will guarantee these obligations. MSD Netherlands Capital B.V. is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of Regulation S-X of the Exchange Act, with no assets or operations other than those related to the issuance, administration and repayment of the Euronotes. The financial condition, results of operations and cash flows of MSD Netherlands Capital B.V. are consolidated in the financial statements of the Company. The net cash proceeds from the offering were used for general corporate purposes.
Certain of the Company’s borrowings require that Merck comply with covenants and, at December 31, 2025, the Company was in compliance with these covenants.
The aggregate maturities of long-term debt for each of the next five years are as follows: 2026, $2.6 billion; 2027, $2.7 billion; 2028, $2.1 billion; 2029, $3.0 billion; 2030, $2.7 billion. Interest payments related to these debt obligations are as follows: 2026, $1.8 billion; 2027, $1.8 billion; 2028, $1.7 billion; 2029, $1.6 billion; 2030, $1.5 billion.
The Company has a $6.0 billion credit facility that matures in May 2030. The facility provides backup liquidity for the Company’s commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this facility.
Leases
The Company has operating leases primarily for manufacturing facilities, research and development facilities, corporate offices, employee housing, vehicles and certain equipment. The Company determines if an arrangement is a lease at inception. When evaluating contracts for embedded leases, the Company exercises judgment to determine if there is an explicit or implicit identified asset in the contract and if Merck controls the use of that asset. Embedded leases, primarily associated with contract manufacturing organizations, are immaterial. The lease term includes options to extend or terminate the lease when it is reasonably certain that Merck will exercise that option. Real estate leases for facilities have an average remaining lease term of approximately seven years, which include options to extend the lease term for periods ranging up to five years where applicable. Vehicle leases are generally in effect for four years. The Company elected to exclude short-term leases (leases with an initial term of 12 months or less) from the lease assets and liabilities on the balance sheet.
Lease expense for operating lease payments is recognized on a straight-line basis over the term of the lease. Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term. Since the Company’s leases do not have a readily determinable implicit discount rate, the Company uses
its incremental borrowing rate to calculate the present value of lease payments by asset class. On a quarterly basis, an updated incremental borrowing rate is determined based on the average remaining lease term of each asset class and the Company’s pretax cost of debt for that same term. The updated rates for each asset class are applied prospectively to new leases. The Company does not separate lease components (e.g., payments for rent, real estate taxes and insurance costs) from non-lease components (e.g. common-area maintenance costs) in the event that the agreement contains both. Merck includes both the lease and non-lease components for purposes of calculating the right-of-use asset and related lease liability (if the non-lease components are fixed). For vehicle leases and employee housing, the Company applies a portfolio approach to account for the operating lease assets and liabilities.
Certain of the Company’s lease agreements contain variable lease payments that are adjusted periodically for inflation or for actual operating expense true-ups compared with estimated amounts; however, these amounts are immaterial. Sublease income was immaterial and there were no sale and leaseback transactions in 2025. Merck’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease cost was $423 million in 2025, $348 million in 2024 and $339 million in 2023. Cash paid for amounts included in the measurement of operating lease liabilities was $349 million in 2025, $357 million in 2024 and $347 million in 2023. Operating lease assets obtained in exchange for lease obligations were $162 million in 2025, $47 million in 2024 and $122 million in 2023.
Supplemental balance sheet information related to operating leases is as follows:
December 3120252024
Assets
Other Assets (1)
$1,507 $1,370 
Liabilities
Accrued and other current liabilities294 282 
Other Noncurrent Liabilities901 877 
$1,195 $1,159 
Weighted-average remaining lease term (years)7.06.0
Weighted-average discount rate3.5 %3.2 %
(1)    Includes prepaid leases that have no related lease liability.
Maturities of operating leases liabilities are as follows:
2026$335 
2027261 
2028204 
2029125 
2030103 
Thereafter415 
Total lease payments1,443 
Less: Imputed interest248 
$1,195 
At December 31, 2025, the Company had entered into additional real estate leases that had not yet commenced; the obligations associated with these leases total $400 million, of which $300 million relates to a lease that will commence in February 2026 and has a lease term of 20 years.