AMGEN INC. 
THOUSAND OAKS, Calif., Jan. 28, 2014 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the fourth quarter and full year of 2013. Key results include:
-- For the fourth quarter, total revenues increased 13 percent to $5,011
million, with product sales growing at 11 percent. Adjusted EPS grew 30
percent to $1.82, with higher revenues, the end of the Enbrel(®)
(etanercept) profit share, and a lower tax rate partially offset by
increased Research & Development (R&D) investment. The fourth quarter
includes results for Onyx Pharmaceuticals, Inc. (Onyx), which was
acquired on Oct. 1, 2013.
-- For the full year, total revenues increased 8 percent to $18,676
million, with 9 percent product sales growth driven by strong
performance across the portfolio. Adjusted EPS grew 17 percent to $7.60,
with higher revenues and a lower tax rate partially offset by increased
R&D investment.
-- GAAP EPS were $1.33 in the fourth quarter compared to $1.01 a year ago
and $6.64 for the full year compared to $5.52 in 2012.
-- Free cash flow for the full year was $5.6 billion compared to $5.2
billion in 2012.
"Amgen delivered financially and strategically in 2013," said Robert A. Bradway, chairman & chief executive officer. "We now have ten innovative development programs with registration-enabling data expected by 2016, six biosimilars in development and expanded presence in more than 75 countries. We are excited about our prospects for long-term growth."
Year-over-Year Year-over-Year
-------------- --------------
$Millions, except EPS and percentages Q4 '13 Q4 '12 YOY FY '13 FY '12 YOY
------ ------ ----- ------ ------ -----
Total
Revenues $5,011 $4,421 13% $18,676 $17,265 8%
Adjusted
Net Income $1,391 $1,088 28% $5,814 $5,119 14%
Adjusted
EPS $1.82 $1.40 30% $7.60 $6.51 17%
GAAP Net
Income $1,021 $788 30% $5,081 $4,345 17%
GAAP EPS $1.33 $1.01 32% $6.64 $5.52 20%
-------- ----- ----- --- ----- ----- ---
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.
Product Sales Performance
-- Total product sales increased 11 percent for the fourth quarter of 2013
versus the fourth quarter of 2012, and 9 percent for the full year
driven by strong performance across the portfolio.
-- Combined Neulasta(® )(pegfilgrastim) and NEUPOGEN(®) (filgrastim)
sales increased year-over-year by 8 percent for the fourth quarter and
for the full year.
-- Global Neulasta sales increased 10 percent year-over-year for the
fourth quarter and 7 percent for the full year driven mainly by
price.
-- Global NEUPOGEN sales decreased 1 percent year-over-year for the
fourth quarter. Sales increased 11 percent for the full year due to
a $155 million order from the U.S. government that occurred in the
third quarter of 2013.
-- ENBREL sales increased 3 percent year-over-year for the fourth quarter
and 7 percent for the full year driven mainly by price.
-- Aranesp(®) (darbepoetin alfa) sales decreased 4 percent year-over-year
for the fourth quarter and decreased 6 percent for the full year due
mainly to lower unit demand.
-- EPOGEN(®) (epoetin alfa) sales increased 10 percent year-over-year for
the fourth quarter driven by higher unit demand. Sales increased 1
percent for the full year.
-- Sensipar(®)/Mimpara(®) (cinacalcet) sales increased 20 percent
year-over-year for the fourth quarter and 15 percent for the full year.
Sales increases were driven by higher unit demand and price.
-- Combined sales of Vectibix(®) (panitumumab) and Nplate(®)
(romiplostim) increased 16 percent year-over-year for the fourth quarter
and increased 12 percent for the full year driven mainly by higher unit
demand.
-- XGEVA(®) (denosumab) sales increased 33 percent year-over-year for the
fourth quarter and increased 36 percent for the full year, driven by
higher unit demand.
-- Prolia(®) (denosumab) sales increased 53 percent year-over-year for the
fourth quarter and increased 58 percent for the full year, driven by
higher unit demand.
-- Kyprolis(®) (carfilzomib) sales for the fourth quarter of 2013 were $73
million.
Product Sales Detail by Product and Geographic Region
$Millions, except percentages Q4 '13 Q4 '12 YOY
------ ------ -----
US ROW TOTAL TOTAL TOTAL
--- --- ----- ----- -----
Neulasta(R)/
NEUPOGEN(R) $1,121 $286 $1,407 $1,306 8%
Neulasta(R) 870 228 1,098 994 10%
NEUPOGEN(R) 251 58 309 312 (1%)
Enbrel(R) 1,120 80 1,200 1,161 3%
Aranesp(R) 180 290 470 489 (4%)
EPOGEN(R) 525 0 525 479 10%
Sensipar(R)
/
Mimpara(R) 217 90 307 256 20%
Vectibix(R) 36 66 102 91 12%
Nplate(R) 66 54 120 101 19%
XGEVA(R)/
Prolia(R) 351 171 522 369 41%
XGEVA(R) 203 83 286 215 33%
Prolia(R) 148 88 236 154 53%
Kyprolis 71 2 73 0 *
Other 0 73 73 85 (14%)
--- --- ---
Total
product
sales $3,687 $1,112 $4,799 $4,337 11%
====== ====== ====== ====== ===
$Millions, except percentages FY '13 FY '12 YOY
------ ------ -----
US ROW TOTAL TOTAL TOTAL
--- --- ----- ----- -----
Neulasta(R)/
NEUPOGEN(R) $4,668 $1,122 $5,790 $5,352 8%
Neulasta(R) 3,499 893 4,392 4,092 7%
NEUPOGEN(R) 1,169 229 1,398 1,260 11%
Enbrel(R) 4,256 295 4,551 4,236 7%
Aranesp(R) 747 1,164 1,911 2,040 (6%)
EPOGEN(R) 1,953 0 1,953 1,941 1%
Sensipar(R)
/
Mimpara(R) 757 332 1,089 950 15%
Vectibix(R) 126 263 389 359 8%
Nplate(R) 241 186 427 368 16%
XGEVA(R)/
Prolia(R) 1,226 537 1,763 1,220 45%
XGEVA(R) 764 255 1,019 748 36%
Prolia(R) 462 282 744 472 58%
Kyprolis(R) 71 2 73 0 *
Other 0 246 246 173 42%
--- --- ---
Total
product
sales $14,045 $4,147 $18,192 $16,639 9%
======= ====== ======= ======= ===
* Not
meaningful
-----------
Operating Expense and Tax Rate Analysis, on an Adjusted Basis
-- Cost of Sales margin decreased 0.8 points in the fourth quarter of 2013
and 0.6 points for the full year.
-- R&D expenses increased 27 percent in the fourth quarter of 2013 and 19
percent for the full year, primarily in support of our later-stage
clinical programs, including evolocumab (AMG 145) and Kyprolis.
-- Selling, General & Administrative (SG&A) expenses decreased 3 percent in
the fourth quarter of 2013 driven primarily by the end of the ENBREL
profit share with Pfizer on Oct. 31, which reduced expenses $129 million
compared with the fourth quarter of 2012, offset partially by the
addition of Onyx. For the full year, SG&A expenses increased 4 percent,
driven primarily by the U.S. healthcare reform federal excise fee and
the addition of Onyx.
$Millions, except percentages
On an Adjusted Basis Q4 '13 Q4 '12 YOY FY '13 FY '12 YOY
------ ------ ----- ------ ------ -----
Cost of Sales $770 $727 6% $2,870 $2,735 5%
% of
sales 16.0% 16.8% (0.8) pts. 15.8% 16.4% (0.6) pts.
% of
sales
(Excluding
PR
excise
tax) 13.9% 14.7% (0.8) pts. 13.8% 14.4% (0.6) pts.
Research & Development $1,168 $917 27% $3,929 $3,296 19%
% of
sales 24.3% 21.1% 3.2 pts. 21.6% 19.8% 1.8 pts.
Selling, General &
Administrative $1,306 $1,351 (3%) $4,905 $4,717 4%
% of
sales 27.2% 31.2% (4.0) pts. 27.0% 28.3% (1.3) pts.
TOTAL Operating Expenses $3,244 $2,995 8% $11,704 $10,748 9%
pts: percentage points
PR: Puerto Rico
---------------
-- Tax Rates for the fourth quarter and full year of 2013 reflect the
favorable impacts of changes in the jurisdictional mix of income and
expenses and the current year benefit from the federal R&D credit. The
full year adjusted tax rate also benefited from the resolution of the
Company's federal income tax audit for tax years 2007-2009 and the
retroactive extension of the 2012 federal R&D credit in the first
quarter of 2013.
On
an
Adjusted
Basis Q4 '13 Q4 '12 YOY FY '13 FY '12 YOY
------ ------ ----- ------ ------ -----
Tax
Rate 12.7% 16.1% (3.4) pts. 9.2% 15.9% (6.7) pts.
Tax
Rate
(Excluding
PR
excise
tax
credits) 16.9% 20.3% (3.4) pts. 13.6% 20.3% (6.7) pts.
pts: percentage points
PR: Puerto Rico
---------------
Cash Flow and Balance Sheet Discussion
-- The Company generated $1.6 billion of free cash flow in the fourth
quarter of 2013. For the full year, free cash flow increased $0.4
billion to $5.6 billion.
-- The Company's first quarter 2014 dividend of $0.61 per share declared on
Dec. 13, 2013, will be paid on Mar. 7, 2014, to all stockholders of
record as of the close of business on Feb. 13, 2014. This dividend
represents a 30 percent increase from that paid in each of the previous
four quarters.
-- The Company did not repurchase shares in the fourth quarter and has $1.6
billion remaining under its stock repurchase authorization.
$Billions, except shares Q4 '13 Q4 '12 YOY FY '13 FY '12 YOY
------ ------ ----- ------ ------ -----
Operating
Cash
Flow $1.8 $0.8 $1.0 $6.3 $5.9 $0.4
Capital
Expenditures 0.2 0.2 0.0 0.7 0.7 0.0
Free
Cash
Flow 1.6 0.6 1.0 5.6 5.2 0.4
Dividends
Paid 0.4 0.3 0.1 1.4 1.1 0.3
Cost
of
Shares
Repurchased 0.0 1.2 (1.2) 0.8 4.7 (3.9)
Adjusted
Avg.
Diluted
Shares
(millions) 766 778 (12) 765 786 (21)
Cash
and
Investments* 22.8 24.1 (1.3) 22.8 24.1 (1.3)
Debt
Outstanding 32.1 26.5 5.6 32.1 26.5 5.6
Stockholders'
Equity 22.1 19.1 3.0 22.1 19.1 3.0
* Includes cash, cash
equivalents and
marketable securities,
and long-term
restricted investments.
The impact of the Onyx
acquisition in the
fourth quarter of 2013
was $9.7 billion, net
of Onyx's cash and
investments acquired.
The Onyx acquisition
was partially financed
with $8.1 billion in
bank debt.
Note: Numbers may not
add due to rounding
----------------------
2014 Guidance
For the full year 2014, the Company expects:
-- Total revenues to be in the range of $19.2 billion to $19.6 billion and
adjusted EPS to be in the range of $7.90 to $8.20. This includes an $800
million incremental operating income contribution due to the end of the
ENBREL profit share.
-- Adjusted tax rate to be in the range of 15 percent to 16 percent. This
assumes the federal R&D credit will be extended for 2014 and also
includes the impact of the foreign tax credit associated with the Puerto
Rico excise tax. The Puerto Rico excise tax credit reduces the adjusted
rate by three to four percentage points.
-- Capital expenditures to be approximately $800 million.
Fourth Quarter Product and Pipeline Update
Projected milestones for innovative late-stage clinical programs:
Clinical
Program Lead Indication Milestone Timing
-------- --------------- --------- ------
Evolocumab Dyslipidemia Phase 3 data Q1 2014
---------- ------------ ------------ -------
Ivabradine Chronic heart failure U.S. filing H1 2014
---------- --------------------- ----------- -------
Kyprolis(R) Multiple myeloma Phase 3 ASPIRE interim
analysis* H1 2014
Phase 3 FOCUS data*
--- ------------------
Talimogene
laherparepvec Metastatic melanoma Phase 3 data*** H1 2014
------------- ------------------- ------------- -------
Blinatumomab Relapsed/refractory ALL Phase 2 data H1 2014
------------ ----------------------- ------------ -------
Trebananib Recurrent ovarian cancer Phase 3 data*** H2 2014
---------- ------------------------ ------------- -------
Velcalcetide Secondary hyperparathyroidism Phase 3 data H2 2014
(AMG 416)
--------
Brodalumab** Psoriasis Phase 3 data 2014
----------- --------- ------------ ----
Romosozumab*** Postmenopausal osteoporosis Phase 3 data H1 2016
------------- --------------------------- ------------ -------
Rilotumumab Gastric Cancer Phase 3 data* 2016
----------- -------------- ------------ ----
* Event driven studies
(**) Overall survival (secondary endpoint)
** Developed in collaboration with AstraZeneca/MedImmune
*** Developed in collaboration with UCB
ALL = acute lymphoblastic leukemia
The company provided the following information on selected clinical programs:
Evolocumab:
-- The Company discussed pivotal data received from four Phase 3 lipid
lowering studies in subjects with elevated LDL cholesterol and continues
to expect the results from a fifth Phase 3 study in the first quarter of
2014.
Romosozumab:
-- The Company discussed that it has increased the sample size and
completed enrollment in its Phase 3 placebo-controlled registrational
study in women with postmenopausal osteoporosis.
Blinatumomab:
-- The Company discussed the recent initiation of a Phase 3 study in
patients with relapsed/refractory B-precursor ALL.
Biosimilars:
-- The Company announced that it has commenced a pivotal study for its
biosimilar Avastin(®) (bevacizumab), the third Amgen biosimilar to
enter a pivotal trial.
-- The Company announced that enrollment has resumed for its pivotal study
for biosimilar Herceptin(®) (trastuzumab).
Note: Avastin(®) and Herceptin(®) are products of Genentech/Roche.
Non-GAAP Financial Measures
The Adjusted non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures included above for the three and twelve months ended Dec. 31, 2013 and 2012 exclude, for the applicable periods, certain expenses related to acquisitions, cost-savings initiatives and certain other adjustments, as applicable. These adjustments and other items are presented on the attached reconciliations.
Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis and Free Cash Flow which is a non-GAAP financial measure for the three and twelve months ended Dec. 31, 2013 and 2012. In addition, management has presented its full year 2014 EPS and tax rate guidance in accordance with GAAP and on an "adjusted" (or non-GAAP) basis. The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity 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 the world's largest independent biotechnology company, 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, 2012, 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. 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.
Amgen Inc.
Condensed Consolidated Statements of Income - GAAP
(In millions, except per share data)
(Unaudited)
Three months
ended Years ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
Revenues:
Product
sales $4,799 $4,337 $18,192 $16,639
Other
revenues 212 84 484 626
--- --- --- ---
Total revenues 5,011 4,421 18,676 17,265
----- ----- ------ ------
Operating expenses:
Cost of
sales 1,029 922 3,346 3,199
Research
and
development 1,249 938 4,083 3,380
Selling,
general
and
administrative 1,521 1,373 5,184 4,814
Other 25 100 196 295
Total operating expenses 3,824 3,333 12,809 11,688
----- ----- ------ ------
Operating income 1,187 1,088 5,867 5,577
Interest expense, net 261 291 1,022 1,053
Interest and other income,
net 88 126 420 485
--- --- --- ---
Income before income taxes 1,014 923 5,265 5,009
Provision for income taxes (7) 135 184 664
Net income $1,021 $788 $5,081 $4,345
====== ==== ====== ======
Earnings per share:
Basic $1.35 $1.03 $6.75 $5.61
Diluted $1.33 $1.01 $6.64 $5.52
Average shares used in
calculation of earnings per
share:
Basic 754 763 753 775
Diluted 766 778 765 787
Amgen Inc.
Condensed Consolidated Balance Sheets - GAAP
(In millions)
(Unaudited)
December 31, December 31,
2013 2012
---- ----
Assets
Current assets:
Cash, cash
equivalents
and
marketable
securities $19,401 $24,061
Trade
receivables,
net 2,697 2,518
Inventories 3,019 2,744
Other current
assets 2,250 1,886
----- -----
Total current
assets 27,367 31,209
Property, plant
and equipment,
net 5,349 5,326
Intangible
assets, net 13,262 3,968
Goodwill 14,968 12,662
Restricted
investments 3,413 -
Other assets 1,766 1,133
----- -----
Total assets $66,125 $54,298
======= =======
Liabilities and
Stockholders'
Equity
Current
liabilities:
Accounts
payable and
accrued
liabilities $5,442 $5,696
Current
portion of
long-term
debt 2,505 2,495
Total current
liabilities 7,947 8,191
Long-term debt 29,623 24,034
Other noncurrent
liabilities 6,459 3,013
Stockholders'
equity 22,096 19,060
------ ------
Total
liabilities and
stockholders'
equity $66,125 $54,298
======= =======
Shares
outstanding 755 756
Amgen Inc.
GAAP to "Adjusted" Reconciliations
(In millions)
(Unaudited)
Three months
ended Years ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
GAAP cost of sales $1,029 $922 $3,346 $3,199
Adjustments to cost of sales:
Stock option expense (a) (3) (3) (9) (12)
Acquisition-related expenses
(b) (256) (74) (467) (292)
Certain charges pursuant to our
efforts to improve cost
efficiencies in our operations
related to accelerated
depreciation of certain
manufacturing facilities - (118) - (160)
Total adjustments to cost of
sales (259) (195) (476) (464)
Adjusted cost of sales $770 $727 $2,870 $2,735
==== ==== ====== ======
GAAP research and development
expenses $1,249 $938 $4,083 $3,380
Adjustments to research and development expenses:
Stock option expense (a) (2) (5) (12) (22)
Acquisition-related expenses
(c) (79) (16) (142) (50)
Certain charges pursuant to our
efforts to improve cost
efficiencies in our operations
related to a lease abandonment - - - (12)
Total adjustments to research
and development expenses (81) (21) (154) (84)
Adjusted research and
development expenses $1,168 $917 $3,929 $3,296
====== ==== ====== ======
GAAP selling, general and
administrative expenses $1,521 $1,373 $5,184 $4,814
Adjustments to selling, general and administrative
expenses:
Stock option expense (a) (3) (5) (13) (25)
Acquisition-related expenses
(d) (212) (17) (266) (72)
Total adjustments to selling,
general and administrative
expenses (215) (22) (279) (97)
Adjusted selling, general and
administrative expenses $1,306 $1,351 $4,905 $4,717
====== ====== ====== ======
GAAP operating expenses $3,824 $3,333 $12,809 $11,688
Adjustments to
operating expenses:
Adjustments to cost of sales (259) (195) (476) (464)
Adjustments to research and
development expenses (81) (21) (154) (84)
Adjustments to selling, general
and administrative expenses (215) (22) (279) (97)
Expense resulting from changes
in the estimated fair values of
the contingent consideration
obligations related to a prior
year business combination (2) (26) (113) (31)
Acquisition-related expenses
(e) 2 (6) 2 (25)
Certain charges pursuant to our
efforts to improve cost
efficiencies in our operations
(f) (25) (69) (71) (175)
Benefit/(Expense) related to
various legal proceedings - 1 (14) (64)
Total adjustments to operating
expenses (580) (338) (1,105) (940)
Adjusted operating expenses $3,244 $2,995 $11,704 $10,748
====== ====== ======= =======
GAAP income before income taxes $1,014 $923 $5,265 $5,009
Adjustments to income before income taxes:
Adjustments to operating
expenses 580 338 1,105 940
Non-cash interest expense
associated with our convertible
notes - 36 12 140
Bridge financing costs
associated with the Onyx
business combination - - 22 -
Total adjustments to income
before income taxes 580 374 1,139 1,080
Adjusted income before income
taxes $1,594 $1,297 $6,404 $6,089
====== ====== ====== ======
GAAP provision for income taxes $(7) $135 $184 $664
Adjustments to provision for income taxes:
Income tax effect of the above
adjustments (g) 228 97 376 329
Other income tax adjustments (h) (18) (23) 30 (23)
Total adjustments to provision
for income taxes 210 74 406 306
Adjusted provision for income
taxes $203 $209 $590 $970
==== ==== ==== ====
GAAP net income $1,021 $788 $5,081 $4,345
Adjustments to net income:
Adjustments to income before
income taxes, net of the tax
effect of the above adjustments 352 277 763 751
Other income tax adjustments (h) 18 23 (30) 23
Total adjustments to net income 370 300 733 774
Adjusted net income $1,391 $1,088 $5,814 $5,119
====== ====== ====== ======
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, computed under
the treasury stock method.
"Adjusted" EPS presented below excludes stock
option expense:
Three months
ended Three months ended
December 31, 2013 December 31, 2012
----------------- -----------------
GAAP "Adjusted" GAAP "Adjusted"
---- ---------- ---- ----------
Income (Numerator):
Net income for basic and diluted
EPS $1,021 $1,391 $788 $1,088
======
Shares (Denominator):
Weighted-average shares for
basic EPS 754 754 763 763
Effect of dilutive securities* 12 12 15 15
Weighted-average shares for
diluted EPS 766 766 778 778
===
Diluted EPS $1.33 $1.82 $1.01 $1.40
=====
Year ended Year ended
December 31, 2013 December 31, 2012
----------------- -----------------
GAAP "Adjusted" GAAP "Adjusted"
---- ---------- ---- ----------
Income (Numerator):
Net income for basic and diluted
EPS $5,081 $5,814 $4,345 $5,119
======
Shares (Denominator):
Weighted-average shares for
basic EPS 753 753 775 775
Effect of dilutive securities* 12 12 12 11
Weighted-average shares for
diluted EPS 765 765 787 786
===
Diluted EPS $6.64 $7.60 $5.52 $6.51
=====
*Dilutive securities used to compute "Adjusted"
diluted EPS were computed assuming that we do
not expense stock options.
(a) For the three months and year ended December 31,
2013, the total pre-tax expense for employee
stock options was $8 million and $34 million,
respectively, compared with $13 million and $59
million for the corresponding periods of the
prior year.
"Adjusted" diluted EPS including the impact of
stock option expense were as follows:
Three months
ended Years ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
"Adjusted" diluted EPS,
excluding stock option expense $1.82 $1.40 $7.60 $6.51
Impact of stock option expense
(net of tax) (0.01) (0.01) (0.03) (0.06)
------
"Adjusted" diluted EPS,
including stock option expense $1.81 $1.39 $7.57 $6.45
=====
(b) The adjustments related primarily to non-cash
amortization of developed product technology
rights acquired in business combinations,
including $176 million in 2013 related to Onyx.
(c) For the three months ended December 31, 2013, the
adjustments related primarily to charges
associated with the Onyx business combination,
which included the acceleration of Onyx unvested
equity compensation (Onyx equity compensation).
The three months and year ended December 31,
2013, also included adjustments related
primarily to non-cash amortization of
intangible assets acquired in prior year
business combinations. The adjustments in 2012
related primarily to non-cash amortization of
intangible assets as well as retention and
severance expenses.
(d) The adjustments in 2013 related primarily to the
Onyx equity compensation. Both 2013 and 2012
included non-cash amortization of intangible
assets acquired in prior year business
combinations as well as business combination
transaction costs.
(e) The adjustments in 2012 related primarily to the
write-off of a non-key intangible asset
acquired in a prior year business combination.
(f) The adjustments in 2013 and the three months
ended December 31, 2012, related primarily to
severance expenses. For the year ended December
31, 2012, the adjustments related primarily to
severance expenses and lease abandonment costs.
(g) 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 stock
option expense, depends on whether the amounts
are deductible in the tax jurisdictions where
the expenses are incurred or the asset is
located 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
months and year ended December 31, 2013, were
39.3% and 33.0%, respectively, compared with
25.9% and 30.5% for the corresponding periods of
the prior year.
(h) For the three months ended December 31, 2013, the
adjustments related primarily to certain prior
period items excluded from adjusted earnings.
For the year ended December 31, 2013, the
adjustments related to resolving certain non-
routine transfer-pricing and acquisition-
related issues with tax authorities as well as
the impact related to certain prior period items
excluded from adjusted earnings. The adjustments
in 2012 related to certain prior period items
excluded from adjusted earnings.
Note: The 2012 expenses related to amortization of
certain acquired intangible assets within
operating expenses have been reclassified to
conform to the current year presentation.
Amgen Inc.
Reconciliation of Free Cash Flow
(In millions)
(Unaudited)
Three Years
months ended
ended
December December
31, 31,
--------- ---------
2013 2012 2013 2012
---- ---- ---- ----
Cash Flows
from
Operations $1,835 $812 $6,291 $5,882
Capital
Expenditures (201) (200) (693) (689)
Free Cash
Flow $1,634 $612 $5,598 $5,193
==== ==== ==== ======
Reconciliation of GAAP EPS Guidance to "Adjusted"
EPS Guidance for the Year Ending December 31, 2014
(Unaudited)
2014
----
GAAP diluted EPS guidance $6.89 - $7.19
Known adjustments to arrive at "Adjusted"
earnings*:
Acquisition-
related
expenses (a) 1.00
Stock
option
expense 0.01
"Adjusted" diluted EPS guidance $7.90 - $8.20
===== = =====
The known
adjustments
are
presented
net of
their
related
tax impact
which
amount to
approximately
$0.56 per
share in
the
* aggregate.
To exclude
acquisition-
related
expenses
related
primarily
to non-
cash
amortization
of
intangible
assets
acquired
in prior
year
business
(a) combinations.
Reconciliation of GAAP Tax Rate Guidance to
"Adjusted"
Tax Rate Guidance for the Year Ending
December 31, 2014
(Unaudited)
2014
----
GAAP tax rate guidance 11% - 12%
Tax rate
effect of
known
adjustments
discussed
above 4%
"Adjusted" tax rate guidance 15% - 16%
=== = ===
CONTACT: Amgen, Thousand Oaks
Ashleigh Koss, 805-313-6151 (media)
Arvind Sood, 805-447-1060 (investors)
(Logo: http://photos.prnewswire.com/prnh/20081015/AMGENLOGO)
SOURCE Amgen
