THOUSAND OAKS, Calif.,
July 27, 2016 /PRNewswire/
-- Amgen (NASDAQ:AMGN) today announced financial results for
the second quarter of 2016. Key results include:
- Revenues increased 6 percent versus the second quarter of 2015
to $5.7 billion.
- Product sales grew 5 percent driven by Enbrel®
(etanercept), Prolia® (denosumab), KYPROLIS®
(carfilzomib) and XGEVA® (denosumab).
- GAAP earnings per share (EPS) increased 15 percent to
$2.47 driven by higher revenues and
higher operating margins.
- GAAP operating income increased 15 percent to $2,380 million and GAAP operating margin improved
by 3.8 percentage points to 43.5 percent.
- Non-GAAP EPS increased 11 percent to $2.84 driven by higher revenues and higher
operating margins.
- Non-GAAP operating income increased 10 percent to $2,812 million and non-GAAP operating margin
improved by 2.6 percentage points to 51.4 percent.
- 2016 total revenues guidance increased to $22.5-$22.8 billion; EPS guidance increased to
$9.55-$9.90 on a GAAP basis and
$11.10-$11.40 on a non-GAAP
basis.
- The Company generated $2.5
billion of free cash flow.
"We delivered another strong quarter
and are on track to meet or exceed our long-term objectives," said
Robert A. Bradway, chairman and
chief executive officer. "We are in the early stages of a new
product launch cycle and have several additional pipeline
opportunities rapidly nearing regulatory
milestones."
|
$Millions, except EPS
and percentages
|
|
Q2'16
|
|
Q2'15
|
|
YOY
Δ
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$ 5,688
|
|
$ 5,370
|
|
6%
|
GAAP Operating
Income
|
|
$ 2,380
|
|
$ 2,076
|
|
15%
|
GAAP Net
Income
|
|
$ 1,870
|
|
$ 1,653
|
|
13%
|
GAAP EPS
|
|
$
2.47
|
|
$
2.15
|
|
15%
|
Non-GAAP Operating
Income
|
|
$ 2,812
|
|
$ 2,551
|
|
10%
|
Non-GAAP Net
Income
|
|
$ 2,146
|
|
$ 1,977
|
|
9%
|
Non-GAAP
EPS
|
|
$
2.84
|
|
$
2.57
|
|
11%
|
|
References in this
release to "non-GAAP" measures, measures presented "on a non-GAAP
basis" and to "free cash flow" (computed by subtracting
capital expenditures from operating cash flow) refer to non-GAAP
financial measures. Adjustments to the most directly comparable
GAAP financial measures and other items are presented on the
attached reconciliations.
|
Product Sales Performance
- Total product sales increased 5 percent for the second
quarter of 2016 versus the second quarter of 2015. The increase was
driven by ENBREL, Prolia, KYPROLIS and XGEVA.
- ENBREL sales increased 10 percent driven by net selling
price, offset partially by the impact of competition.
- Neulasta® (pegfilgrastim) sales
decreased 1 percent driven by lower unit demand, offset partially
by net selling price in the United
States (U.S.).
- Aranesp® (darbepoetin alfa) sales
increased 5 percent. Unit demand grew due to a shift by some U.S.
dialysis customers from EPOGEN® (epoetin alfa) to
Aranesp. Unit demand growth was offset partially by unfavorable
changes in inventory and net selling price.
- Prolia sales increased 30 percent driven by higher unit
demand.
- Sensipar/Mimpara® (cinacalcet) sales
increased 13 percent driven by net selling price and higher unit
demand.
- XGEVA sales increased 15 percent driven mainly by higher
unit demand and, to a lesser extent, net selling price.
- EPOGEN sales decreased 33 percent driven by the impact
of competition and, to a lesser extent, a shift by some U.S.
dialysis customers to Aranesp.
- NEUPOGEN® (filgrastim) sales decreased 23
percent driven by the impact of competition in the U.S.
- KYPROLIS sales increased 45 percent driven by higher
unit demand.
- Vectibix® (panitumumab) sales were flat.
- Nplate® (romiplostim) sales increased 14
percent driven by higher unit demand.
- BLINCYTO® (blinatumomab) sales increased 76
percent driven by higher unit demand.
Product Sales
Detail by Product and Geographic Region
|
|
|
|
|
|
|
|
|
|
$Millions, except
percentages
|
|
Q2'16
|
|
Q2'15
|
|
YOY
Δ
|
|
|
US
|
ROW
|
TOTAL
|
|
TOTAL
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
Enbrel®
|
|
$1,423
|
$61
|
$1,484
|
|
$1,348
|
|
10%
|
Neulasta®
|
|
962
|
187
|
1,149
|
|
1,158
|
|
(1%)
|
Aranesp®
|
|
260
|
244
|
504
|
|
479
|
|
5%
|
Prolia®
|
|
286
|
155
|
441
|
|
340
|
|
30%
|
Sensipar®
/ Mimpara®
|
|
303
|
86
|
389
|
|
344
|
|
13%
|
XGEVA®
|
|
275
|
106
|
381
|
|
331
|
|
15%
|
EPOGEN®
|
|
331
|
0
|
331
|
|
491
|
|
(33%)
|
NEUPOGEN®
|
|
141
|
55
|
196
|
|
256
|
|
(23%)
|
KYPROLIS®
|
|
142
|
30
|
172
|
|
119
|
|
45%
|
Vectibix®
|
|
52
|
108
|
160
|
|
160
|
|
0%
|
Nplate®
|
|
84
|
58
|
142
|
|
125
|
|
14%
|
BLINCYTO®
|
21
|
9
|
30
|
|
17
|
|
76%
|
Repatha®
|
20
|
7
|
27
|
|
0
|
|
*
|
Other**
|
|
17
|
51
|
68
|
|
57
|
|
19%
|
|
|
|
|
|
|
|
|
|
Total product
sales
|
|
$4,317
|
$1,157
|
$5,474
|
|
$5,225
|
|
5%
|
|
|
|
|
|
|
|
|
|
* Not
meaningful
|
|
|
|
|
|
|
|
|
** Other includes MN
Pharma, Bergamo, IMLYGIC®and
Corlanor®
|
|
Operating Expense, Operating Margin and Tax Rate
Analysis
On a GAAP basis:
- Cost of Sales margin improved by 1.6 percentage points
driven primarily by manufacturing efficiencies and higher net
selling price. Research & Development (R&D) expenses
decreased 7 percent driven primarily by transformation and process
improvement efforts and lower spending required to support certain
later-stage clinical programs. Selling, General &
Administrative (SG&A) expenses increased 11 percent
driven primarily by investments in new product launches. Total
Operating Expenses were flat year-over-year, with all expense
categories reflecting savings from our transformation and process
improvement efforts.
- Operating Margin improved by 3.8 percentage points to
43.5 percent.
- Tax Rate decreased by 2.0 percentage points, reflecting
discrete benefits associated with tax incentives and the adoption
of Accounting Standards Update 2016-09, Improvements to Employee
Share-Based Payment Accounting (ASU 2016-09), offset partially
by unfavorable changes in the geographic mix of earnings.
On a non-GAAP basis:
- Cost of Sales margin improved by 1.6 percentage points
driven primarily by manufacturing efficiencies and higher net
selling price. R&D expenses decreased 4 percent driven
primarily by transformation and process improvement efforts and
lower spending required to support certain later-stage clinical
programs. SG&A expenses increased 13 percent driven
primarily by investments in new product launches. Total
Operating Expenses increased 2 percent, with all expense
categories reflecting savings from our transformation and process
improvement efforts.
- Operating Margin improved by 2.6 percentage points to
51.4 percent.
- Tax Rate decreased by 1.4 percentage points, reflecting
discrete benefits associated with tax incentives and the adoption
of ASU 2016-09, offset partially by unfavorable changes in the
geographic mix of earnings.
|
|
$Millions, except
percentages
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
Q2'16
|
|
Q2'15
|
|
YOY
Δ
|
|
Q2'16
|
|
Q2'15
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$1,050
|
|
$1,089
|
|
(4%)
|
|
$738
|
|
$789
|
|
(6%)
|
|
% of product
sales
|
19.2%
|
|
20.8%
|
|
(1.6) pts
|
|
13.5%
|
|
15.1%
|
|
(1.6) pts
|
Research &
Development
|
$900
|
|
$964
|
|
(7%)
|
|
$878
|
|
$918
|
|
(4%)
|
|
% of product
sales
|
16.4%
|
|
18.4%
|
|
(2.0) pts
|
|
16.0%
|
|
17.6%
|
|
(1.6) pts
|
Selling, General
& Administrative
|
$1,292
|
|
$1,160
|
|
11%
|
|
$1,260
|
|
$1,112
|
|
13%
|
|
% of product
sales
|
23.6%
|
|
22.2%
|
|
1.4 pts
|
|
23.0%
|
|
21.3%
|
|
1.7 pts
|
Other
|
$66
|
|
$81
|
|
(19%)
|
|
$0
|
|
$0
|
|
0%
|
TOTAL Operating
Expenses
|
$3,308
|
|
$3,294
|
|
0%
|
|
$2,876
|
|
$2,819
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
operating income as a
% of product sales
|
43.5%
|
|
39.7%
|
|
3.8 pts
|
|
51.4%
|
|
48.8%
|
|
2.6 pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Rate
|
15.2%
|
|
17.2%
|
|
(2.0)
pts
|
|
18.6%
|
|
20.0%
|
|
(1.4)
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
pts: percentage
points
|
|
|
|
Cash Flow and Balance Sheet
- The Company generated $2.5
billion of free cash flow in the second quarter of 2016
versus $3.2 billion in the second
quarter of 2015. The decrease was driven by the timing of tax
payments and the termination of foreign exchange forward contracts
in the second quarter of 2015.
- The Company's third quarter 2016 dividend of $1.00 per share declared on July 22, 2016, will be paid on Sept. 8, 2016, to all stockholders of record as
of Aug. 17, 2016.
- During the second quarter, the Company repurchased 3.9 million
shares of common stock at a total cost of $591 million. At the end of the second quarter,
the Company had $3.6 billion
remaining under its stock repurchase authorization.
|
|
$Billions, except
shares
|
|
Q2'16
|
|
Q2'15
|
|
YOY
Δ
|
|
|
|
|
|
|
|
|
|
Operating Cash
Flow
|
$2.7
|
|
$3.3
|
|
($0.6)
|
Capital
Expenditures
|
0.2
|
|
0.1
|
|
0.1
|
Free Cash
Flow
|
2.5
|
|
3.2
|
|
(0.7)
|
Dividends
Paid
|
0.8
|
|
0.6
|
|
0.2
|
Share
Repurchase
|
0.6
|
|
0.5
|
|
0.1
|
Avg. Diluted Shares
(millions)
|
756
|
|
768
|
|
(12)
|
|
|
|
|
|
|
|
|
|
Cash and
Investments
|
35.0
|
|
30.0
|
|
5.0
|
Debt
Outstanding
|
33.2
|
|
32.0
|
|
1.2
|
Stockholders'
Equity
|
30.1
|
|
27.5
|
|
2.6
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
add due to rounding
|
|
2016 Guidance
For the full year 2016, the Company now expects:
- Total revenues in the range of $22.5 billion to $22.8 billion.
- Previously, the Company expected total revenues in the range of
$22.2 billion to $22.6 billion.
- On a GAAP basis, EPS in the range of $9.55 to $9.90 and a tax rate in the range
of 16.5 percent to 17.5 percent.
- Previously, the Company expected GAAP EPS in the range of
$9.34 to $9.74. Tax rate guidance is
unchanged.
- On a non-GAAP basis, EPS in the range of $11.10 to $11.40 and a tax rate in the
range of 19.0 percent to 20.0 percent.
- Previously, the Company expected non-GAAP EPS in the range of
$10.85 to $11.20. Tax rate guidance
is unchanged.
- Capital expenditures to be approximately $700 million.
Second Quarter
Product and Pipeline Update
|
Key development
milestones:
|
|
Clinical
Program
|
Indication
|
Milestone
|
Repatha®
(evolocumab)
|
Hyperlipidemia
|
Phase 3 coronary
imaging data expected H2 2016
Phase 3 CV outcomes
data expected Q1 2017*
|
KYPROLIS
|
Newly diagnosed
multiple myeloma
|
Phase 3 data expected
H2 2016*
|
BLINCYTO®
|
Pediatric Ph- R/R
B-cell precursor ALL
|
FDA priority
review
|
Parsabiv™
(etelcalcetide)†
|
Secondary
hyperparathyroidism
|
Global regulatory
reviews
|
XGEVA
|
Prevention of SREs in
multiple myeloma
|
Phase 3 data expected
H2 2016*
|
Romosozumab
|
Postmenopausal
osteoporosis
|
US regulatory
review
Global regulatory
submissions
|
Erenumab (AMG
334)
|
Migraine
Prophylaxis
|
Phase 3 episodic
migraine data expected H2 2016
|
ABP 215
(biosimilar
bevacizumab)
|
Oncology
|
Global regulatory
submissions
|
ABP 501
(biosimilar
adalimumab)
|
Inflammatory
diseases
|
Global regulatory
reviews
|
ABP 980
(biosimilar
trastuzumab)
|
Breast
Cancer
|
Global regulatory
submissions
|
|
*Event driven
study; †Trade name provisionally approved by FDA;
CV = cardiovascular; ALL = acute lymphoblastic
leukemia
|
The Company provided the following updates on selected product
and pipeline programs:
Repatha
- In July, the U.S. Food and Drug Administration (FDA) approved
the Repatha Pushtronex™ system (on-body infusor with
prefilled cartridge) for monthly single-dose administration.
- Data from a Phase 3 study evaluating the effects of Repatha on
atherosclerotic disease as measured by intravascular ultrasound are
expected in H2 2016.
- Data from an event driven Phase 3 study evaluating the effects
of Repatha on cardiovascular outcomes are expected in Q1 2017.
KYPROLIS
- In June, the European Commission approved an expanded
indication for KYPROLIS, to be used in combination with
dexamethasone alone, for adult patients with multiple myeloma who
have received at least one prior therapy, based on the ENDEAVOR
data.
- Data from the event driven Phase 3 CLARION study of KYPROLIS
versus bortezomib in newly diagnosed, transplant ineligible
multiple myeloma patients is expected in H2 2016.
BLINCYTO
- In May, FDA accepted for priority review the supplemental
Biologics License Application for BLINCYTO to include new data
supporting the treatment of pediatric and adolescent patients with
Philadelphia chromosome‑negative
relapsed or refractory B-cell precursor acute lymphoblastic
leukemia. The Prescription Drug User Fee Act target action
date is Sept. 1, 2016.
Romosozumab
- In July, a Biologics License Application for romosozumab for
the treatment of osteoporosis in postmenopausal women at increased
risk for fracture was submitted to FDA.
Erenumab
- In June, a global Phase 2 study evaluating the efficacy and
safety of erenumab in chronic migraine prevention met its primary
endpoint.
ABP 980
- In July, the primary analysis was completed for a Phase 3 study
evaluating the efficacy and safety of ABP 980 compared with
trastuzumab in patients with human epidermal growth factor receptor
2-positive early breast cancer.
Erenumab is developed in collaboration with
Novartis
Romosozumab is developed in collaboration with
UCB globally, as well as Astellas in Japan
Non-GAAP Financial Measures
In this news release, management has presented its operating
results for the second quarters of 2016 and 2015 in accordance with
U.S. Generally Accepted Accounting Principles (GAAP) and on a
non-GAAP basis. In addition, management has presented its full year
2016 EPS and tax rate guidance in accordance with GAAP and on a
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.
Reconciliations for these non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in the
news release. Management has also presented Free Cash Flow (FCF),
which is a non-GAAP financial measure, for the second quarters of
2016 and 2015. FCF is computed by subtracting capital expenditures
from operating cash flow, each as determined in accordance with
GAAP.
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 ongoing business activities
by facilitating comparisons of results of ongoing business
operations among current, past and future periods. 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 news release in connection with its own budgeting and financial
planning internally to evaluate the performance of the business,
including to allocate resources and to evaluate results relative to
incentive compensation targets. 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 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 are
based on the current expectations and beliefs of Amgen. All
statements, other than statements of historical fact, are
statements that could be deemed forward-looking statements,
including estimates of revenues, operating margins, capital
expenditures, cash, other financial metrics, expected legal,
arbitration, political, regulatory or clinical results or
practices, customer and prescriber patterns or practices,
reimbursement activities and outcomes and other such estimates and
results. Forward-looking statements involve significant risks and
uncertainties, including those discussed below and more fully
described in the Securities and Exchange Commission reports filed
by Amgen, including our most recent annual report on Form 10-K and
any subsequent periodic reports on Form 10-Q and Form 8-K. Unless
otherwise noted, 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. Our results
may be affected by our ability to successfully market both new and
existing products domestically and internationally, clinical and
regulatory developments involving current and future products,
sales growth of recently launched products, competition from other
products including biosimilars, difficulties or delays in
manufacturing our products and global economic conditions. In
addition, sales of our products are affected by pricing pressure,
political and public scrutiny and reimbursement policies imposed by
third-party payers, 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.
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. In addition, our business may be impacted by the adoption
of new tax legislation or exposure to additional tax liabilities.
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, or we
may fail to prevail in present and future intellectual property
litigation. We perform a substantial amount of our commercial
manufacturing activities at a few key facilities and also depend on
third parties for a portion of our manufacturing activities, 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 many 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. The
discovery of significant problems with a product similar to one of
our products that implicate an entire class of products could have
a material adverse effect on sales of the affected products and on
our business and results of operations. Our efforts to acquire
other companies or products and to integrate the operations of
companies we have acquired may not be successful. We may not be
able to access the capital and credit markets on terms that are
favorable to us, or at all. We are increasingly dependent on
information technology systems, infrastructure and data security.
Our stock price is volatile and may be affected by a number of
events. 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
Trish Hawkins, 805-447-5631
(media)
Arvind Sood, 805-447-1060
(investors)
Amgen
Inc.
|
Consolidated
Statements of Income - GAAP
|
(In millions,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
$
5,474
|
|
$
5,225
|
|
$
10,713
|
|
$
10,099
|
|
Other
revenues
|
|
214
|
|
145
|
|
502
|
|
304
|
|
|
Total
revenues
|
|
5,688
|
|
5,370
|
|
11,215
|
|
10,403
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,050
|
|
1,089
|
|
2,068
|
|
2,122
|
|
Research and
development
|
|
900
|
|
964
|
|
1,772
|
|
1,858
|
|
Selling, general and
administrative
|
|
1,292
|
|
1,160
|
|
2,495
|
|
2,186
|
|
Other
|
|
66
|
|
81
|
|
98
|
|
139
|
|
|
Total operating
expenses
|
|
3,308
|
|
3,294
|
|
6,433
|
|
6,305
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
2,380
|
|
2,076
|
|
4,782
|
|
4,098
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
313
|
|
277
|
|
607
|
|
529
|
Interest and other
income, net
|
|
137
|
|
198
|
|
287
|
|
304
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
2,204
|
|
1,997
|
|
4,462
|
|
3,873
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
334
|
|
344
|
|
692
|
|
597
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
1,870
|
|
$
1,653
|
|
$
3,770
|
|
$
3,276
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.49
|
|
$
2.18
|
|
$
5.01
|
|
$
4.30
|
|
Diluted
|
|
$
2.47
|
|
$
2.15
|
|
$
4.97
|
|
$
4.26
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculation of earnings per share:
|
|
|
|
|
|
|
|
Basic
|
|
751
|
|
760
|
|
753
|
|
761
|
|
Diluted
|
|
756
|
|
768
|
|
759
|
|
769
|
Amgen
Inc.
|
Consolidated
Balance Sheets - GAAP
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities
|
|
$
35,034
|
|
$
31,382
|
|
Trade receivables,
net
|
|
3,078
|
|
2,995
|
|
Inventories
|
|
2,671
|
|
2,435
|
|
Other current
assets
|
|
2,164
|
|
1,703
|
|
|
Total current
assets
|
|
42,947
|
|
38,515
|
Property, plant and
equipment, net
|
|
4,884
|
|
4,907
|
Intangible assets,
net
|
|
11,068
|
|
11,641
|
Goodwill
|
|
14,799
|
|
14,787
|
Other
assets
|
|
1,773
|
|
1,599
|
Total
assets
|
|
$
75,471
|
|
$
71,449
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
5,536
|
|
$
6,417
|
|
Current portion of
long-term debt
|
|
5,294
|
|
2,247
|
|
|
Total current
liabilities
|
|
10,830
|
|
8,664
|
Long-term
debt
|
|
27,928
|
|
29,182
|
Long-term deferred
tax liability
|
|
2,598
|
|
2,239
|
Other noncurrent
liabilities
|
|
3,982
|
|
3,281
|
Stockholders'
equity
|
|
30,133
|
|
28,083
|
Total liabilities and
stockholders' equity
|
|
$
75,471
|
|
$
71,449
|
|
|
|
|
|
|
|
Shares
outstanding
|
|
749
|
|
754
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
GAAP cost of
sales
|
$
1,050
|
|
$
1,089
|
|
$
2,068
|
|
$
2,122
|
Adjustments to
cost of sales:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(312)
|
|
(285)
|
|
(623)
|
|
(569)
|
Certain net charges
pursuant to our restructuring initiative
|
-
|
|
(15)
|
|
-
|
|
(29)
|
Total adjustments
to cost of sales
|
(312)
|
|
(300)
|
|
(623)
|
|
(598)
|
Non-GAAP cost of
sales
|
$
738
|
|
$
789
|
|
$
1,445
|
|
$
1,524
|
|
|
|
|
|
|
|
|
GAAP cost of sales
as a percentage of product sales
|
19.2%
|
|
20.8%
|
|
19.3%
|
|
21.0%
|
Acquisition-related
expenses
|
-5.7
|
|
-5.4
|
|
-5.8
|
|
-5.6
|
Certain net charges
pursuant to our restructuring initiative
|
0.0
|
|
-0.3
|
|
0.0
|
|
-0.3
|
Non-GAAP cost of
sales as a percentage of product sales
|
13.5%
|
|
15.1%
|
|
13.5%
|
|
15.1%
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
900
|
|
$
964
|
|
$
1,772
|
|
$
1,858
|
Adjustments to
research and development expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (a)
|
(19)
|
|
(28)
|
|
(38)
|
|
(49)
|
Certain net charges
pursuant to our restructuring initiative
|
(3)
|
|
(18)
|
|
2
|
|
(35)
|
Total adjustments
to research and development expenses
|
(22)
|
|
(46)
|
|
(36)
|
|
(84)
|
Non-GAAP research
and development expenses
|
$
878
|
|
$
918
|
|
$
1,736
|
|
$
1,774
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses as a percentage of product
sales
|
16.4%
|
|
18.4%
|
|
16.5%
|
|
18.4%
|
Acquisition-related
expenses (a)
|
-0.3
|
|
-0.5
|
|
-0.3
|
|
-0.5
|
Certain net charges
pursuant to our restructuring initiative
|
-0.1
|
|
-0.3
|
|
0.0
|
|
-0.3
|
Non-GAAP research
and development expenses as a percentage of product
sales
|
16.0%
|
|
17.6%
|
|
16.2%
|
|
17.6%
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses
|
$
1,292
|
|
$
1,160
|
|
$
2,495
|
|
$
2,186
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
Acquisition-related
expenses (b)
|
(27)
|
|
(28)
|
|
(128)
|
|
(57)
|
Certain net charges
pursuant to our restructuring initiative
|
(5)
|
|
(20)
|
|
(4)
|
|
(24)
|
Total adjustments
to selling, general and administrative expenses
|
(32)
|
|
(48)
|
|
(132)
|
|
(81)
|
Non-GAAP selling,
general and administrative expenses
|
$
1,260
|
|
$
1,112
|
|
$
2,363
|
|
$
2,105
|
|
|
|
|
|
|
|
|
GAAP selling,
general and administrative expenses as a percentage of product
sales
|
23.6%
|
|
22.2%
|
|
23.3%
|
|
21.6%
|
Acquisition-related
expenses (a)
|
-0.5
|
|
-0.5
|
|
-1.2
|
|
-0.6
|
Certain net charges
pursuant to our restructuring initiative
|
-0.1
|
|
-0.4
|
|
0.0
|
|
-0.2
|
Non-GAAP selling,
general and administrative expenses as a percentage of product
sales
|
23.0%
|
|
21.3%
|
|
22.1%
|
|
20.8%
|
|
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
3,308
|
|
$
3,294
|
|
$
6,433
|
|
$
6,305
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
Adjustments to cost
of sales
|
(312)
|
|
(300)
|
|
(623)
|
|
(598)
|
Adjustments to
research and development expenses
|
(22)
|
|
(46)
|
|
(36)
|
|
(84)
|
Adjustments to
selling, general and administrative expenses
|
(32)
|
|
(48)
|
|
(132)
|
|
(81)
|
Certain net charges
pursuant to our restructuring initiative (c)
|
(8)
|
|
(10)
|
|
(10)
|
|
(67)
|
Expense related to
various legal proceedings
|
(78)
|
|
(71)
|
|
(105)
|
|
(71)
|
Acquisition-related
adjustments
|
20
|
|
-
|
|
17
|
|
(1)
|
Total adjustments
to operating expenses
|
(432)
|
|
(475)
|
|
(889)
|
|
(902)
|
Non-GAAP operating
expenses
|
$
2,876
|
|
$
2,819
|
|
$
5,544
|
|
$
5,403
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
2,380
|
|
$
2,076
|
|
$
4,782
|
|
$
4,098
|
Adjustments to
operating expenses
|
432
|
|
475
|
|
889
|
|
902
|
Non-GAAP operating
income
|
$
2,812
|
|
$
2,551
|
|
$
5,671
|
|
$
5,000
|
|
|
|
|
|
|
|
|
GAAP operating
income as a percentage of product sales
|
43.5%
|
|
39.7%
|
|
44.6%
|
|
40.6%
|
Adjustments to cost
of sales
|
5.7
|
|
5.7
|
|
5.8
|
|
5.9
|
Adjustments to
research and development expenses
|
0.4
|
|
0.9
|
|
0.4
|
|
0.8
|
Adjustments to
selling, general and administrative expenses
|
0.6
|
|
0.9
|
|
1.2
|
|
0.8
|
Certain net charges
pursuant to our restructuring initiative (c)
|
0.2
|
|
0.2
|
|
0.1
|
|
0.7
|
Expense related to
various legal proceedings
|
1.4
|
|
1.4
|
|
1.0
|
|
0.7
|
Acquisition-related
adjustments
|
-0.4
|
|
0.0
|
|
-0.2
|
|
0.0
|
Non-GAAP operating
income as a percentage of product sales
|
51.4%
|
|
48.8%
|
|
52.9%
|
|
49.5%
|
|
|
|
|
|
|
|
|
GAAP income before
income taxes
|
$
2,204
|
|
$
1,997
|
|
$
4,462
|
|
$
3,873
|
Adjustments to
operating expenses
|
432
|
|
475
|
|
889
|
|
902
|
Non-GAAP income
before income taxes
|
$
2,636
|
|
$
2,472
|
|
$
5,351
|
|
$
4,775
|
|
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
334
|
|
$
344
|
|
$
692
|
|
$
597
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments to operating expenses (d)
|
146
|
|
151
|
|
285
|
|
290
|
Other income tax
adjustments (e)
|
10
|
|
-
|
|
25
|
|
-
|
Total adjustments
to provision for income taxes
|
156
|
|
151
|
|
310
|
|
290
|
Non-GAAP provision
for income taxes
|
$
490
|
|
$
495
|
|
$
1,002
|
|
$
887
|
|
|
|
|
|
|
|
|
GAAP tax rate as a
percentage of income before taxes
|
15.2%
|
|
17.2%
|
|
15.5%
|
|
15.4%
|
Adjustments to
provision for income taxes:
|
|
|
|
|
|
|
|
Income tax effect of
the above adjustments to operating expenses (d)
|
3.0
|
|
2.8
|
|
2.7
|
|
3.2
|
Other income tax
adjustments (e)
|
0.4
|
|
0.0
|
|
0.5
|
|
0.0
|
Total adjustments
to provision for income taxes
|
3.4
|
|
2.8
|
|
3.2
|
|
3.2
|
Non-GAAP tax rate
as a percentage of income before taxes
|
18.6%
|
|
20.0%
|
|
18.7%
|
|
18.6%
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
1,870
|
|
$
1,653
|
|
$
3,770
|
|
$
3,276
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Adjustments to income
before income taxes, net of the income tax effect
|
286
|
|
324
|
|
604
|
|
612
|
Other income tax
adjustments (e)
|
(10)
|
|
-
|
|
(25)
|
|
-
|
Total adjustments
to net income
|
276
|
|
324
|
|
579
|
|
612
|
Non-GAAP net
income
|
$
2,146
|
|
$
1,977
|
|
$
4,349
|
|
$
3,888
|
Amgen
Inc.
|
GAAP to Non-GAAP
Reconciliations
|
(In millions,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
presents the computations for GAAP and non-GAAP diluted
EPS.
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
June 30,
2016
|
|
June 30,
2015
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income
|
$
1,870
|
|
$
2,146
|
|
$
1,653
|
|
$
1,977
|
Weighted-average
shares for diluted EPS
|
756
|
|
756
|
|
768
|
|
768
|
Diluted
EPS
|
$
2.47
|
|
$
2.84
|
|
$
2.15
|
|
$
2.57
|
|
|
|
|
|
|
|
|
|
Six months
ended
|
|
Six months
ended
|
|
June 30,
2016
|
|
June 30,
2015
|
|
GAAP
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Net income
|
$
3,770
|
|
$
4,349
|
|
$
3,276
|
|
$
3,888
|
Weighted-average
shares for diluted EPS
|
759
|
|
759
|
|
769
|
|
769
|
Diluted
EPS
|
$
4.97
|
|
$
5.73
|
|
$
4.26
|
|
$
5.06
|
|
|
(a)
|
The adjustments
related primarily to non-cash amortization of intangible assets
acquired in business combinations.
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
For the three months
ended June 20, 2016 as well as the three and six months ended June
30, 2015, the adjustments related primarily to non-cash
amortization of intangible assets acquired in business
combinations. For the six months ended June 30, 2016, the
adjustments related primarily to a $73-million charge resulting
from the reacquisition of Prolia®, XGEVA®and
Vectibix®license agreements in certain markets from
Glaxo Group Limited, as well as non-cash amortization of intangible
assets acquired in business combinations.
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
The adjustments
related primarily to severance expenses.
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
The tax effect of the
adjustments between our GAAP and non-GAAP 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, 2016,
were 33.8% and 32.1%, respectively, compared with 31.8% and 32.2%
for the corresponding periods of the prior year.
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
The adjustments
related to certain prior period items excluded from non-GAAP
earnings, primarily the impact related to the stock options from
the adoption of ASU 2016-09.
|
Amgen
Inc.
|
Reconciliations of
Cash Flows
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net cash provided by
operating activities
|
$
2,677
|
|
$
3,284
|
(a)
|
$
4,592
|
|
$
4,766
|
(a)
|
Net cash used in
investing activities
|
(657)
|
|
(2,359)
|
|
(5,047)
|
|
(3,311)
|
|
Net cash (used in)
provided by financing activities
|
(2,286)
|
|
6
|
|
(1,059)
|
|
(1,391)
|
|
(Decrease) increase
in cash and cash equivalents
|
(266)
|
|
931
|
|
(1,514)
|
|
64
|
|
Cash and cash
equivalents at beginning of period
|
2,896
|
|
2,864
|
|
4,144
|
|
3,731
|
|
Cash and cash
equivalents at end of period
|
$
2,630
|
|
$
3,795
|
|
$
2,630
|
|
$
3,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net cash provided by
operating activities
|
$
2,677
|
|
$
3,284
|
(a)
|
$
4,592
|
|
$
4,766
|
(a)
|
Capital
expenditures
|
(188)
|
|
(133)
|
|
(344)
|
|
(251)
|
|
Free cash
flow
|
$
2,489
|
|
$
3,151
|
|
$
4,248
|
|
$
4,515
|
|
|
(a) Restated
to include $470 million and $623 million for the three and six
months ended June 30, 2015, respectively, which was previously
included in Net cash (used in) provided by financing activities, as
a result of the adoption of ASU 2016-09.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP EPS Guidance to Non-GAAP
|
EPS Guidance for
the Year Ending December 31, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted EPS
guidance
|
|
$
9.55
|
-
|
$
9.90
|
|
|
|
|
|
|
|
Known adjustments
to arrive at non-GAAP*:
|
|
|
|
|
|
Acquisition-related
expenses
|
(a)
|
|
1.35
|
|
|
Restructuring
charges
|
|
0.09
|
-
|
0.14
|
|
Legal proceeding
charge
|
|
|
0.09
|
|
|
Tax
adjustments
|
|
(b)
|
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
EPS guidance
|
|
$ 11.10
|
-
|
$ 11.40
|
|
|
|
|
|
|
|
*
|
The known adjustments
are presented net of their related tax impact which amount to
approximately $0.71 to $0.73 per share,
in the aggregate.
|
|
|
|
|
|
|
|
(a)
|
The adjustments
relate primarily to non-cash amortization of intangible assets
acquired in prior year business combinations.
|
|
|
|
|
|
|
|
(b)
|
The adjustments
relate to certain prior period items excluded from non-GAAP
earnings.
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Tax Rate Guidance to Non-GAAP
|
Tax Rate Guidance
for the Year Ending December 31, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
GAAP tax rate
guidance
|
16.5%
|
-
|
17.5%
|
|
|
|
|
Tax rate
effect of known adjustments discussed above
|
|
|
2.5%
|
|
|
|
|
|
Non-GAAP tax rate
guidance
|
19.0%
|
-
|
20.0%
|
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SOURCE Amgen