THOUSAND OAKS, Calif.,
July 30, 2015 /PRNewswire/
-- Amgen (NASDAQ:AMGN) today announced financial results for
the second quarter of 2015. Key results include:
- Total revenues increased 4 percent versus the second quarter of
2014 to $5,370 million, with 6
percent product sales growth driven primarily by Enbrel®
(etanercept), Prolia® (denosumab), Sensipar®
(cinacalcet), Kyprolis® (carfilzomib) and
XGEVA® (denosumab). Unfavorable changes in foreign
exchange rates impacted total revenue and product sales growth by
approximately 2.5 percentage points.
- Adjusted EPS grew 8 percent versus the second quarter of 2014
to $2.57 driven by higher revenues
and lower operating expenses. Adjusted operating income increased
10 percent to $2,551 million.
- Adjusted operating margin improved by approximately 2
percentage points to 49 percent.
- GAAP EPS were $2.15 compared to
$2.01 and GAAP operating income was
$2,076 million compared to
$1,902 million.
- The Company generated $2.7
billion of free cash flow compared to $2.1 billion in the second quarter of 2014.
"Focused execution with our growth products drove record
revenues in the second quarter, and expense discipline further
leveraged earnings and our ability to invest in new and forthcoming
launches," said Robert A. Bradway,
chairman and chief executive officer. "Our pipeline continues
to deliver, with Repatha approval in the European Union and
Kyprolis approval for relapsed multiple myeloma in the United States. We are on track to deliver
on our long-term objectives for patients and
shareholders."
|
|
Year-over-Year
|
$Millions, except EPS
and percentages
|
|
Q2
'15
|
|
Q2
'14
|
|
YOY
Δ
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$ 5,370
|
|
$ 5,180
|
|
4%
|
Adjusted Operating
Income
|
|
$ 2,551
|
|
$ 2,319
|
|
10%
|
Adjusted Net
Income
|
|
$ 1,977
|
|
$ 1,823
|
|
8%
|
Adjusted
EPS
|
|
$ 2.57
|
|
$ 2.37
|
|
8%
|
|
|
|
|
|
|
|
GAAP Operating
Income
|
|
$ 2,076
|
|
$ 1,902
|
|
9%
|
GAAP Net
Income
|
|
$ 1,653
|
|
$ 1,547
|
|
7%
|
GAAP EPS
|
|
$ 2.15
|
|
$ 2.01
|
|
7%
|
|
|
|
|
|
|
|
References in this
release to "adjusted" measures, measures presented "on an adjusted
basis" or to free cash flow refer to non-GAAP financial
measures. These adjustments and other items are presented on
the attached reconciliations.
|
Second Quarter 2015 Product Sales Performance
- Total product sales increased 6 percent for the second
quarter of 2015 versus the second quarter of 2014. The increase was
driven primarily by ENBREL, Prolia, Sensipar, Kyprolis and XGEVA.
Growth for the quarter was due to price and higher unit
demand.
- Neulasta® (pegfilgrastim) sales increased 2
percent year-over-year driven by price. NEUPOGEN®
(filgrastim) sales decreased 14 percent year-over-year driven
primarily by the impact of competition in the United States (U.S.).
- ENBREL sales increased 8 percent year-over-year driven
by price, offset partially by the impact of competition.
- Prolia sales increased 29 percent year-over-year driven
by higher unit demand.
- XGEVA sales increased 11 percent year-over-year driven
primarily by higher unit demand.
- EPOGEN® (epoetin alfa) sales decreased 4
percent year-over-year driven primarily by a shift in dialysis
customer purchases to Aranesp® (darbepoetin
alfa), as well as the impact of competition, offset partially by
price.
- Aranesp sales decreased 7 percent year-over-year driven
by unfavorable changes in foreign exchange rates and a prior year
positive Medicaid rebate estimate adjustment, offset partially by
higher unit demand, including the shift from EPOGEN.
- Sensipar/Mimpara® sales increased 15 percent
year-over-year driven by higher unit demand and price.
- Vectibix® (panitumumab) sales increased 21
percent year-over-year driven by higher unit demand.
- Nplate® (romiplostim) sales increased 6
percent year-over-year driven primarily by higher unit demand.
- Kyprolis sales increased 53 percent year-over-year
driven by higher unit demand.
Product Sales Detail by Product and Geographic Region
|
|
|
|
|
|
|
|
|
|
$Millions, except
percentages
|
|
Q2
'15
|
|
Q2
'14
|
|
YOY
Δ
|
|
|
|
US
|
ROW
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
Neulasta®/
NEUPOGEN®
|
|
$1,144
|
$270
|
$1,414
|
|
$1,429
|
|
(1%)
|
|
Neulasta®
|
|
953
|
205
|
1,158
|
|
1,133
|
|
2%
|
|
NEUPOGEN®
|
|
191
|
65
|
256
|
|
296
|
|
(14%)
|
|
Enbrel®
|
|
1,280
|
68
|
1,348
|
|
1,243
|
|
8%
|
|
XGEVA®/
Prolia®
|
|
449
|
222
|
671
|
|
563
|
|
19%
|
|
Prolia®
|
|
215
|
125
|
340
|
|
264
|
|
29%
|
|
XGEVA®
|
|
234
|
97
|
331
|
|
299
|
|
11%
|
|
EPOGEN®
|
|
491
|
0
|
491
|
|
512
|
|
(4%)
|
|
Aranesp®
|
|
223
|
256
|
479
|
|
517
|
|
(7%)
|
|
Sensipar®
/ Mimpara®
|
|
261
|
83
|
344
|
|
298
|
|
15%
|
|
Vectibix®
|
|
52
|
108
|
160
|
|
132
|
|
21%
|
|
Nplate®
|
|
73
|
52
|
125
|
|
118
|
|
6%
|
|
Kyprolis®
|
|
112
|
7
|
119
|
|
78
|
|
53%
|
|
Other
|
|
20
|
54
|
74
|
|
59
|
|
25%
|
|
|
|
|
|
|
|
|
|
|
|
Total product
sales
|
|
$4,105
|
$1,120
|
$5,225
|
|
$4,949
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Operating Expense, Operating Margin and Tax
Rate Analysis, on an Adjusted Basis
- Operating Expenses decreased 1 percent, including a
3 percentage point benefit from foreign exchange rates.
- Cost of Sales margin improved 0.8 points driven by lower
royalty expense and higher product sales.
- Research & Development (R&D) expenses decreased
6 percent driven by savings from transformation and process
improvement efforts, offset partially by increased support for
later-stage clinical programs.
- Selling, General & Administrative expenses increased
2 percent as increased commercial expenses for new product launches
were enabled by savings from transformation and process improvement
efforts.
- Operating Margin improved by approximately 2 percentage
points to 49 percent.
- Tax Rate increased 3.8 percentage points to 20.0 percent
primarily due to changes in the geographic mix of earnings.
$Millions, except
percentages
|
|
|
|
|
|
On an Adjusted
Basis
|
Q2
'15
|
|
Q2
'14
|
|
YOY
Δ
|
|
|
|
|
|
|
Cost of
Sales*
|
$789
|
|
$789
|
|
0%
|
|
% of sales
|
15.1%
|
|
15.9%
|
|
(0.8) pts
|
Research &
Development
|
$918
|
|
$979
|
|
(6%)
|
|
% of sales
|
17.6%
|
|
19.8%
|
|
(2.2) pts
|
Selling, General
& Administrative
|
$1,112
|
|
$1,093
|
|
2%
|
|
% of sales
|
21.3%
|
|
22.1%
|
|
(0.8) pts
|
TOTAL Operating
Expenses
|
$2,819
|
|
$2,861
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
48.8%
|
|
46.9%
|
|
1.9 pts
|
|
|
|
|
|
|
|
|
|
Tax
Rate*
|
20.0%
|
|
16.2%
|
|
3.8
pts
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
|
|
*
|
Impact of Puerto Rico
excise tax is included in Cost of Sales and Tax Rate. Excluding
Puerto Rico excise tax, Cost of Sales would be 1.9 pts. lower for
both 2015 and 2014; and the Tax Rate would be 2.7 pts. and 3.5 pts.
higher for 2015 and 2014, respectively
|
|
|
|
|
|
|
|
|
|
Cash Flow and Balance Sheet Discussion
- The Company generated $2.7
billion of free cash flow in the second quarter of 2015
versus $2.1 billion in the second
quarter of 2014. The increase was driven by improved working
capital and higher operating income, as well as the termination of
foreign exchange forward contracts.
- The Company's third quarter 2015 dividend of $0.79 per share declared on July 28, 2015, will be paid on Sept. 8, 2015, to all stockholders of record as
of the close of business on Aug. 17,
2015.
- During the second quarter, the Company repurchased 3.3 million
shares of common stock at a total cost of $0.5 billion. At the end of the second quarter,
the Company had $2.9 billion
remaining under its stock repurchase authorization.
|
|
|
|
|
|
|
$Billions, except
shares
|
Q2
'15
|
|
Q2
'14
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
Operating Cash
Flow
|
$2.8
|
|
$2.2
|
|
$0.6
|
|
Capital
Expenditures
|
0.1
|
|
0.2
|
|
(0.1)
|
|
Free Cash
Flow
|
2.7
|
|
2.1
|
|
0.6
|
|
Dividends
Paid
|
0.6
|
|
0.5
|
|
0.1
|
|
Share
Repurchase
|
0.5
|
|
0.0
|
|
0.5
|
|
Avg. Diluted Shares
(millions)
|
768
|
|
768
|
|
0
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
30.0
|
|
26.2
|
|
3.8
|
|
Debt
Outstanding
|
32.0
|
|
33.3
|
|
(1.3)
|
|
Stockholders'
Equity
|
27.5
|
|
24.4
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Guidance
For the full year 2015, the Company now expects:
- Total revenues in the range of $21.1 billion to $21.4 billion and adjusted
EPS in the range of $9.55 to
$9.80. Previously, the Company expected total revenues in
the range of $20.9 billion to $21.3
billion and adjusted EPS in the range of $9.35 to $9.65.
- Adjusted tax rate to be in the range of 18 percent to 19
percent. This excludes the benefit of the federal R&D tax
credit, which has not yet been extended for 2015.
- Capital expenditures to be approximately $700 million.
Second Quarter Product and Pipeline Update
Anticipated key milestones:
Clinical
Program
|
Indication
|
Milestone
|
Repatha™
(evolocumab)
|
Dyslipidemia
|
Approved in European
Union (EU)
U.S. regulatory
review
Phase 3
cardiovascular imaging data in 2016
|
Kyprolis
|
Relapsed multiple
myeloma
|
Approved in
U.S
EU regulatory
review
|
Talimogene
laherparepvec
|
Metastatic
melanoma
|
Global regulatory
reviews
|
AMG 416
|
Secondary
hyperparathyroidism
|
Global submissions in
Q3 2015
|
Omecamtiv
mecarbil*
|
Heart
failure
|
Phase 2 data in Q4
2015
|
Romosozumab†
|
Postmenopausal
osteoporosis
|
Phase 3 data in H1
2016
|
AMG 334
|
Migraine
Prophylaxis
|
Phase 2b chronic
migraine data in 2016
|
ABP 215
(biosimilar
bevacizumab)
|
Non-small cell lung
cancer
|
Phase 3 data in H2
2015
|
|
*Developed in
collaboration with Cytokinetics; †Developed in
collaboration with UCB, as well as Astellas in Japan
|
The Company provided the following updates on selected product
and pipeline programs:
Repatha
- In July, the European Commission approved Repatha for the
treatment of high cholesterol, as an adjunct to diet:
- In combination with statins or other lipid lowering therapies
in patients unable to control their LDL cholesterol with maximum
tolerated statin doses, or
- Alone or in combination with other lipid lowering therapies in
patients who are statin intolerant or for whom a statin is
contraindicated.
- Repatha is also approved in the EU in combination with other
lipid-lowering agents in patients with homozygous familial
hypercholesterolemia (age 12 and over).
- Enrollment has completed in the Phase 3 cardiovascular outcomes
study.
Kyprolis
- In July, the U.S. Food and Drug Administration expanded the
indication of Kyprolis to include the treatment of patients who
have received 1 to 3 prior lines of therapy, in combination with
lenalidomide and dexamethasone.
- A Marketing Authorization Application (MAA) is currently under
accelerated assessment in the EU for relapsed multiple
myeloma.
- Supplemental New Drug Application submitted in the U.S. based
on data from the phase 3 ENDEAVOR study.
- Enrollment recently completed in the Phase 3 CLARION study
versus Velcade® (bortezomib) in newly diagnosed multiple
myeloma patients.
- A Phase 3 study initiated with weekly dosing in relapsed and
refractory multiple myeloma.
AMG 416
- Submissions of a New Drug Application in the U.S. and a MAA in
the EU are planned for the third quarter of 2015 for secondary
hyperparathyroidism.
AMG 334
- Phase 3 studies initiated in episodic migraine.
Note: VELCADE is a
registered trademark of Millennium Pharmaceuticals,
Inc.
|
Non-GAAP Financial Measures
In this news release, management has presented its operating
results for the second quarters of 2015 and 2014 in accordance with
U.S. Generally Accepted Accounting Principles (GAAP) and on an
adjusted (or non-GAAP) basis. In addition, management has presented
its full year 2015 EPS and tax rate guidance in accordance with
GAAP and on an adjusted (or non-GAAP) basis. These non-GAAP
financial measures are computed by excluding certain items related
to acquisitions, restructuring and certain other items from the
related GAAP financial measures. Management has also presented Free
Cash Flow (FCF), which is a non-GAAP financial measure, for the
second quarters of 2015 and 2014. FCF is computed by subtracting
capital expenditures from operating cash flow, each as determined
in accordance with GAAP. Reconciliations for these non-GAAP
financial measures to the most directly comparable GAAP financial
measures are included in the news release.
The Company believes that its presentation of non-GAAP financial
measures provides useful supplementary information to and
facilitates additional analysis by investors. The Company uses
certain non-GAAP financial measures to enhance an investor's
overall understanding of the financial performance and prospects
for the future of the Company's core business activities by
facilitating comparisons of results of core business operations
among current, past and future periods. In addition, the Company
believes that excluding the non-cash amortization of intangible
assets, including developed product technology rights, acquired in
business combinations treats those assets as if the Company had
developed them internally in the past, and thus provides a
supplemental measure of profitability in which the Company's
acquired intellectual property is treated in a comparable manner to
its internally developed intellectual property. The Company
believes that FCF provides a further measure of the Company's
liquidity.
The Company uses the non-GAAP financial measures set forth in
the press release in connection with its own budgeting and
financial planning. The non-GAAP financial measures are in addition
to, not a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP.
About Amgen
Amgen is committed to unlocking the
potential of biology for patients suffering from serious illnesses
by discovering, developing, manufacturing and delivering innovative
human therapeutics. This approach begins by using tools like
advanced human genetics to unravel the complexities of disease and
understand the fundamentals of human biology.
Amgen focuses on areas of high unmet medical need and leverages
its biologics manufacturing expertise to strive for solutions that
improve health outcomes and dramatically improve people's lives. A
biotechnology pioneer since 1980, Amgen has grown to be one of the
world's leading independent biotechnology companies, has reached
millions of patients around the world and is developing a pipeline
of medicines with breakaway potential.
For more information, visit www.amgen.com and follow us on
www.twitter.com/amgen.
Forward-Looking Statements
This news release contains
forward-looking statements that involve significant risks and
uncertainties, including those discussed below and others that can
be found in our Form 10-K for the year ended Dec. 31, 2014, and in any subsequent periodic
reports on Form 10-Q and Form 8-K. Amgen is providing this
information as of the date of this news release and does not
undertake any obligation to update any forward-looking statements
contained in this document as a result of new information, future
events or otherwise.
No forward-looking statement can be guaranteed and actual
results may differ materially from those we project. The Company's
results may be affected by our ability to successfully market both
new and existing products domestically and internationally,
clinical and regulatory developments (domestic or foreign)
involving current and future products, sales growth of recently
launched products, competition from other products (domestic or
foreign), and difficulties or delays in manufacturing our products.
In addition, sales of our products are affected by reimbursement
policies imposed by third-party payors, including governments,
private insurance plans and managed care providers and may be
affected by regulatory, clinical and guideline developments and
domestic and international trends toward managed care and
healthcare cost containment as well as U.S. legislation affecting
pharmaceutical pricing and reimbursement. Government and others'
regulations and reimbursement policies may affect the development,
usage and pricing of our products. Furthermore, our research,
testing, pricing, marketing and other operations are subject to
extensive regulation by domestic and foreign government regulatory
authorities. We or others could identify safety, side effects or
manufacturing problems with our products after they are on the
market. Our business may be impacted by government investigations,
litigation and product liability claims. If we fail to meet the
compliance obligations in the corporate integrity agreement between
us and the U.S. government, we could become subject to significant
sanctions. Further, while we routinely obtain patents for our
products and technology, the protection offered by our patents and
patent applications may be challenged, invalidated or circumvented
by our competitors. We depend on third parties for a
significant portion of our manufacturing capacity for the supply of
certain of our current and future products and limits on supply may
constrain sales of certain of our current products and product
candidate development. In addition, we compete with other companies
with respect to some of our marketed products as well as for the
discovery and development of new products. Discovery or
identification of new product candidates cannot be guaranteed and
movement from concept to product is uncertain; consequently, there
can be no guarantee that any particular product candidate will be
successful and become a commercial product. Further, some raw
materials, medical devices and component parts for our products are
supplied by sole third-party suppliers. Our efforts to integrate
the operations of companies we have acquired may not be successful.
We may experience difficulties, delays or unexpected costs and not
achieve anticipated benefits and savings from our ongoing
restructuring plan. Our business performance could affect or limit
the ability of our Board of Directors to declare a dividend or our
ability to pay a dividend or repurchase our common stock.
CONTACT: Amgen, Thousand
Oaks
Kristen Davis, 805-447-3008
(media)
Trish Hawkins, 805-447-5631
(media)
Arvind Sood, 805-447-1060
(investors)
Amgen
Inc.
|
Condensed
Consolidated Statements of Income - GAAP
|
(In millions,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
Three months
ended
|
Six months
ended
|
|
|
|
|
June
30,
|
June
30,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
$ 5,225
|
|
$ 4,949
|
|
$ 10,099
|
|
$ 9,305
|
|
Other
revenues
|
|
145
|
|
231
|
|
304
|
|
396
|
|
|
Total
revenues
|
|
5,370
|
|
5,180
|
|
10,403
|
|
9,701
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
Cost of
sales
|
|
1,089
|
|
1,081
|
|
2,122
|
|
2,171
|
|
Research and
development
|
|
964
|
|
1,018
|
|
1,858
|
|
2,045
|
|
Selling, general and
administrative
|
|
1,160
|
|
1,136
|
|
2,186
|
|
2,159
|
|
Other
|
|
81
|
|
43
|
|
139
|
|
60
|
|
|
Total operating
expenses
|
|
3,294
|
|
3,278
|
|
6,305
|
|
6,435
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
2,076
|
|
1,902
|
|
4,098
|
|
3,266
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
277
|
|
282
|
|
529
|
|
541
|
Interest and other
income, net
|
|
198
|
|
138
|
|
304
|
|
237
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
1,997
|
|
1,758
|
|
3,873
|
|
2,962
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
344
|
|
211
|
|
597
|
|
342
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 1,653
|
|
$ 1,547
|
|
$ 3,276
|
|
$ 2,620
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
|
$ 2.18
|
|
$ 2.04
|
|
$ 4.30
|
|
$ 3.46
|
|
Diluted
|
|
$ 2.15
|
|
$ 2.01
|
|
$ 4.26
|
|
$ 3.41
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculation of earnings per share:
|
|
Basic
|
|
760
|
|
759
|
|
761
|
|
758
|
|
Diluted
|
|
768
|
|
768
|
|
769
|
|
768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amgen
Inc.
|
|
|
|
|
Condensed
Consolidated Balance Sheets - GAAP
|
|
|
(In
millions)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities
|
|
$ 29,993
|
|
$ 27,026
|
|
Trade receivables,
net
|
|
2,779
|
|
2,546
|
|
Inventories
|
|
2,567
|
|
2,647
|
|
Other current
assets
|
|
2,397
|
|
2,494
|
|
|
|
Total current
assets
|
|
37,736
|
|
34,713
|
Property, plant and
equipment, net
|
|
5,050
|
|
5,223
|
Intangible assets,
net
|
|
11,988
|
|
12,693
|
Goodwill
|
|
14,723
|
|
14,788
|
Other
assets
|
|
1,712
|
|
1,592
|
Total
assets
|
|
$ 71,209
|
|
$ 69,009
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$ 5,641
|
|
$ 6,508
|
|
Current portion of
long-term debt
|
|
1,250
|
|
500
|
|
|
|
Total current
liabilities
|
|
6,891
|
|
7,008
|
Long-term
debt
|
|
30,702
|
|
30,215
|
Long-term deferred
tax liability
|
|
3,227
|
|
3,461
|
Other noncurrent
liabilities
|
|
2,905
|
|
2,547
|
Stockholders'
equity
|
|
27,484
|
|
25,778
|
Total liabilities and
stockholders' equity
|
|
$ 71,209
|
|
$ 69,009
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
759
|
|
760
|
|
|
|
|
|
|
|
|
|
|
Amgen
Inc.
|
|
|
|
|
|
|
|
|
|
GAAP to Adjusted
Reconciliations
|
|
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
sales
|
$ 1,089
|
|
$ 1,081
|
|
$2,122
|
|
$ 2,171
|
|
|
|
Adjustments to
cost of sales:
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(285)
|
|
(290)
|
|
(569)
|
|
(694)
|
|
|
|
Accelerated
depreciation and other charges pursuant to our restructuring
initiative
|
(15)
|
|
-
|
|
(29)
|
|
-
|
|
|
|
Stock option
expense
|
-
|
|
(2)
|
|
-
|
|
(4)
|
|
|
|
Total adjustments
to cost of sales
|
(300)
|
|
(292)
|
|
(598)
|
|
(698)
|
|
|
|
Adjusted cost of
sales
|
$ 789
|
|
$ 789
|
|
$1,524
|
|
$ 1,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$ 964
|
|
$ 1,018
|
|
$1,858
|
|
$ 2,045
|
|
|
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (b)
|
(28)
|
|
(38)
|
|
(49)
|
|
(69)
|
|
|
|
Accelerated
depreciation and other charges pursuant to our restructuring
initiative
|
(18)
|
|
-
|
|
(35)
|
|
-
|
|
|
|
Stock option
expense
|
-
|
|
(1)
|
|
-
|
|
(3)
|
|
|
|
Total adjustments
to research and development expenses
|
(46)
|
|
(39)
|
|
(84)
|
|
(72)
|
|
|
|
Adjusted research
and development expenses
|
$ 918
|
|
$ 979
|
|
$1,774
|
|
$ 1,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$ 1,160
|
|
$ 1,136
|
|
$2,186
|
|
$ 2,159
|
|
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
expenses (b)
|
(28)
|
|
(42)
|
|
(57)
|
|
(80)
|
|
|
|
Certain charges
pursuant to our restructuring initiative
|
(20)
|
|
-
|
|
(24)
|
|
-
|
|
|
|
Stock option
expense
|
-
|
|
(1)
|
|
-
|
|
(3)
|
|
|
|
Total adjustments
to selling, general and administrative expenses
|
(48)
|
|
(43)
|
|
(81)
|
|
(83)
|
|
|
|
Adjusted selling,
general and administrative expenses
|
$ 1,112
|
|
$ 1,093
|
|
$2,105
|
|
$ 2,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$ 3,294
|
|
$ 3,278
|
|
$6,305
|
|
$ 6,435
|
|
|
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Adjustments to cost
of sales
|
(300)
|
|
(292)
|
|
(598)
|
|
(698)
|
|
|
|
Adjustments to
research and development expenses
|
(46)
|
|
(39)
|
|
(84)
|
|
(72)
|
|
|
|
Adjustments to
selling, general and administrative expenses
|
(48)
|
|
(43)
|
|
(81)
|
|
(83)
|
|
|
|
Certain charges
pursuant to our restructuring and other cost savings initiatives
(c)
|
(10)
|
|
(23)
|
|
(67)
|
|
(38)
|
|
|
|
(Expense)/Benefit
related to various legal proceedings
|
(71)
|
|
-
|
|
(71)
|
|
3
|
|
|
|
Expense resulting
from changes in the estimated fair values of the contingent
consideration obligations related to prior year business
combinations
|
-
|
|
(14)
|
|
(1)
|
|
(15)
|
|
|
|
Other
(d)
|
-
|
|
(6)
|
|
-
|
|
(10)
|
|
|
|
Total adjustments
to operating expenses
|
(475)
|
|
(417)
|
|
(902)
|
|
(913)
|
|
|
|
Adjusted operating
expenses
|
$ 2,819
|
|
$ 2,861
|
|
$5,403
|
|
$ 5,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$ 2,076
|
|
$ 1,902
|
|
$4,098
|
|
$ 3,266
|
|
|
|
Adjustments to
operating expenses
|
475
|
|
417
|
|
902
|
|
913
|
|
|
|
Adjusted operating
income
|
$ 2,551
|
|
$ 2,319
|
|
$5,000
|
|
$ 4,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$ 1,997
|
|
$ 1,758
|
|
$3,873
|
|
$ 2,962
|
|
|
|
Adjustments to
operating expenses
|
475
|
|
417
|
|
902
|
|
913
|
|
|
|
Adjusted income
before income taxes
|
$ 2,472
|
|
$ 2,175
|
|
$4,775
|
|
$ 3,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$ 344
|
|
$ 211
|
|
$ 597
|
|
$ 342
|
|
|
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments (e)
|
151
|
|
148
|
|
290
|
|
279
|
|
|
|
Other income tax
adjustments (f)
|
-
|
|
(7)
|
|
-
|
|
(7)
|
|
|
|
Total adjustments
to provision for income taxes
|
151
|
|
141
|
|
290
|
|
272
|
|
|
|
Adjusted provision
for income taxes
|
$ 495
|
|
$ 352
|
|
$ 887
|
|
$ 614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$ 1,653
|
|
$ 1,547
|
|
$3,276
|
|
$ 2,620
|
|
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect of the above
adjustments
|
324
|
|
269
|
|
612
|
|
634
|
|
|
|
Other income tax
adjustments (f)
|
-
|
|
7
|
|
-
|
|
7
|
|
|
|
Total adjustments
to net income
|
324
|
|
276
|
|
612
|
|
641
|
|
|
|
Adjusted net
income
|
$ 1,977
|
|
$ 1,823
|
|
$3,888
|
|
$ 3,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amgen
Inc.
|
|
|
|
|
|
|
|
|
|
GAAP to Adjusted
Reconciliations
|
|
|
|
|
|
|
|
(In millions,
except per share data)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
presents the computations for GAAP and Adjusted diluted
EPS.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
|
|
|
GAAP
|
|
Adjusted
|
|
GAAP
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 1,653
|
|
$ 1,977
|
|
$1,547
|
|
$ 1,823
|
|
|
|
Weighted-average
shares for diluted EPS
|
768
|
|
768
|
|
768
|
|
768
|
|
|
|
Diluted
EPS
|
$ 2.15
|
|
$ 2.57
|
|
$ 2.01
|
|
$ 2.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
Six months
ended
|
|
|
|
|
June 30,
2015
|
|
June 30,
2014
|
|
|
|
|
GAAP
|
|
Adjusted
|
|
GAAP
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 3,276
|
|
$ 3,888
|
|
$2,620
|
|
$ 3,261
|
|
|
|
Weighted-average
shares for diluted EPS
|
769
|
|
769
|
|
768
|
|
768
|
|
|
|
Diluted
EPS
|
$ 4.26
|
|
$ 5.06
|
|
$ 3.41
|
|
$ 4.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The adjustments
related primarily to non-cash amortization of intangible assets,
including developed product technology rights, acquired in business
combinations. For the six months
ended June 30, 2014, the adjustments also included a $99-million
charge related to the termination of a supply contract with F.
Hoffmann-La Roche Ltd. as a result
of acquiring the licenses to filgrastim and pegfilgrastim in
certain territories effective January 1, 2014.
|
|
(b)
|
The adjustments
related primarily to non-cash amortization of intangible assets
acquired in business combinations.
|
|
|
(c)
|
The adjustments
related primarily to severance expenses.
|
|
|
(d)
|
The 2014 adjustments
related primarily to various acquisition-related
expenses.
|
|
|
(e)
|
The tax effect of the
adjustments between our GAAP and Adjusted results takes into
account the tax treatment and related tax rate(s) that apply to
each adjustment in the applicable
tax jurisdiction(s). Generally, this results in a tax impact at the
U.S. marginal tax rate for certain adjustments, including the
majority of amortization of intangible assets, whereas the tax impact of other
adjustments, including restructuring expense, depends on whether
the amounts are deductible in the respective tax
jurisdictions and the applicable tax
rate(s) in those jurisdictions. Due to these factors, the effective
tax rates for the adjustments to our GAAP income before
income taxes, for the three and
six months ended June 30, 2015, were 31.8% and 32.2%, respectively,
compared with 35.5% and 30.6% for the corresponding periods of
the prior year.
|
|
(f)
|
The 2014 adjustments
related to certain prior period items excluded from adjusted
earnings.
|
|
|
Amgen
Inc.
|
|
|
|
|
Reconciliations of
Free Cash Flow
|
|
|
(In
millions)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
June
30,
|
|
|
|
|
2015
|
|
2014
|
|
Operating Cash
Flow
|
$2,814
|
|
$2,227
|
|
Capital
Expenditures
|
(133)
|
|
(173)
|
|
Free Cash
Flow
|
$2,681
|
|
$2,054
|
|
|
|
|
|
|
|
Reconciliation of
GAAP EPS Guidance to Adjusted
|
|
|
|
|
EPS Guidance for
the Year Ending December 31, 2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
GAAP diluted EPS
guidance
|
|
$ 8.06
|
-
|
$ 8.35
|
|
|
|
|
|
|
|
Known adjustments
to arrive at Adjusted earnings*:
|
|
|
|
|
|
|
Acquisition-related
expenses
|
(a)
|
1.18
|
|
|
Restructuring
charges
|
|
0.19
|
-
|
0.23
|
|
|
Legal proceeding
expense
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
EPS guidance
|
|
$ 9.55
|
-
|
$ 9.80
|
|
|
|
|
|
|
|
*
|
|
The known adjustments
are presented net of their related tax impact which amount to
approximately $0.70 to $0.72 per share in the aggregate.
|
|
|
|
(a)
|
|
The adjustments
relate primarily to non-cash amortization of intangible assets
acquired in prior year business combinations.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Tax Rate Guidance to Adjusted
|
|
|
|
|
Tax Rate Guidance
for the Year Ending December 31, 2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
GAAP tax rate
guidance
|
|
14%
|
-
|
16%
|
|
|
|
|
|
|
|
|
Tax rate effect of
known adjustments discussed above
|
|
3%
|
-
|
4%
|
|
|
|
|
|
|
|
Adjusted tax rate
guidance
|
|
18%
|
-
|
19%
|
|
|
|
|
|
|
|
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SOURCE Amgen