AMGEN INC. 
THOUSAND OAKS, Calif., Jan. 23, 2013 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the fourth quarter and full year of 2012. Key results include:
-- For the full year, total revenues increased 11 percent to $17,265
million, with 9 percent product sales growth driven by strong
performance across the portfolio. Adjusted EPS grew 22 percent to $6.51
due to 15 percent adjusted operating income growth and lower shares
outstanding.
-- For the fourth quarter, total revenues increased 11 percent to $4,421
million, with product sales growing at the same rate. Adjusted EPS grew
16 percent to $1.40 due to 11 percent adjusted operating income growth
and lower shares outstanding.
-- GAAP EPS were $1.01 in the fourth quarter compared to $1.08 a year ago,
and were $5.52 for the full year compared to $4.04 in 2011. Full year
2011 was negatively impacted by a previously disclosed charge for a
legal settlement reserve.
-- Free cash flow for the full year was $5.2 billion compared to $4.5
billion in 2011.
-- The Company announced that it has initiated Phase 3 studies for AMG 145
in subjects with high levels of low-density lipoprotein (LDL)
cholesterol.
"We achieved strong operating performance in 2012 as we delivered for patients and created value for shareholders," said Robert A. Bradway, chairman and chief executive officer at Amgen. "We enter 2013 with good momentum, a broad late-stage pipeline and a continued focus on building our business internationally."
Year-over-Year Year-over-Year
-------------- --------------
$Millions, except EPS and percentages Q4 '12 Q4 '11 YOY D FY '12 FY '11 YOY D
------ ------ ----- ------ ------ -----
Total Revenues $4,421 $3,973 11% $17,265 $15,582 11%
Adjusted Net
Income 1,088 1,039 5% 5,119 4,858 5%
Adjusted EPS 1.40 1.21 16% 6.51 5.33 22%
GAAP Net Income 788 934 (16%) 4,345 3,683 18%
GAAP EPS $1.01 $1.08 (6%) $5.52 $4.04 37%
-------- ----- ----- --- ----- ----- ---
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 9 percent for the full year, driven by
strong performance across the portfolio. Product sales increased 11
percent for the fourth quarter of 2012 versus the fourth quarter of 2011
driven by Enbrel® (etanercept), XGEVA® (denosumab) and Prolia®
(denosumab).
-- Combined Neulasta® (pegfilgrastim) and NEUPOGEN® (Filgrastim) sales
declined 1 percent for the fourth quarter of 2012 versus the fourth
quarter of 2011, and increased 3 percent for the full year.
-- Global Neulasta sales for the fourth quarter of 2012 versus the
fourth quarter of 2011 were flat as price increases were offset by
unit declines and unfavorable inventory changes. Sales increased 4
percent for the full year mainly due to price increases.
-- Global NEUPOGEN sales for the fourth quarter of 2012 versus the
fourth quarter of 2011 declined 3 percent driven by a decrease in
unit demand from loss of share to biosimilars in Europe. Sales were
flat for the full year as price increases offset unit declines.
-- ENBREL sales for the fourth quarter of 2012 versus the fourth quarter of
2011 increased 23 percent driven by increases in the average net sales
price and unit demand. Sales increased 14 percent for the full year due
mainly to price increases and unit growth.
-- Aranesp® (darbepoetin alfa) sales decreased 9 percent for the fourth
quarter of 2012 versus the fourth quarter of 2011 and 11 percent for the
full year due to changes in practice patterns. Sequentially, sales were
down 2 percent.
-- EPOGEN® (epoetin alfa) sales for the fourth quarter of 2012 versus the
fourth quarter of 2011 decreased 1 percent driven by a reduction in dose
utilization, offset largely by a reduction in customer discounts and
favorable changes in accounting estimates. Sales for the full year
decreased 5 percent as unit declines were offset partially by a
reduction in customer discounts and favorable changes in accounting
estimates.
-- Sensipar®/Mimpara® (cinacalcet) sales increased 19 percent for the
fourth quarter of 2012 versus the fourth quarter of 2011 and 18 percent
for the full year due to unit growth and price increases.
-- Combined sales of Vectibix® (panitumumab) and Nplate® (romiplostim)
increased 15 percent for the fourth quarter of 2012 versus the fourth
quarter of 2011 and 17 percent for the full year due to unit growth.
-- XGEVA sales increased 7 percent on a sequential basis and 113 percent
for the full year due to unit growth.
-- Prolia sales increased 40 percent on a sequential basis and 133 percent
for the full year due to unit growth.
Product Sales Detail by Product and Geographic Region
$Millions, except percentages Q4 '12 Q4 '11 YOY D
------ ------ -----
US ROW TOTAL TOTAL TOTAL
--- --- ----- ----- -----
Neulasta(R)/ NEUPOGEN(R) $1,026 $280 $1,306 $1,319 (1%)
Neulasta(R) 775 219 994 998 0%
NEUPOGEN(R) 251 61 312 321 (3%)
Enbrel(R) 1,086 75 1,161 945 23%
Aranesp(R) 187 302 489 538 (9%)
EPOGEN(R) 479 0 479 486 (1%)
Sensipar(R) / Mimpara(R) 177 79 256 216 19%
Vectibix(R) 30 61 91 87 5%
Nplate(R) 57 44 101 80 26%
XGEVA(R) 178 37 215 134 60%
Prolia(R) 95 59 154 81 90%
Other 0 85 85 21 *
--- --- ---
Total product sales $3,315 $1,022 $4,337 $3,907 11%
====== ====== ====== ====== ===
* Change in excess of 100%
-------------------------
$Millions, except percentages FY '12 FY '11 YOY D
------ ------ -----
US ROW TOTAL TOTAL TOTAL
--- --- ----- ----- -----
Neulasta(R)/ NEUPOGEN(R) $4,214 $1,138 $5,352 $5,212 3%
Neulasta(R) 3,207 885 4,092 3,952 4%
NEUPOGEN(R) 1,007 253 1,260 1,260 0%
Enbrel(R) 3,967 269 4,236 3,701 14%
Aranesp(R) 782 1,258 2,040 2,303 (11%)
EPOGEN(R) 1,941 0 1,941 2,040 (5%)
Sensipar(R) / Mimpara(R) 639 311 950 808 18%
Vectibix(R) 122 237 359 322 11%
Nplate(R) 214 154 368 297 24%
XGEVA(R) 644 104 748 351 *
Prolia(R) 292 180 472 203 *
Other 0 173 173 58 *
--- --- ---
Total product sales $12,815 $3,824 $16,639 $15,295 9%
======= ====== ======= ======= ===
* Change in excess of 100%
-------------------------
Operating Expense and Tax Rate Analysis, on an Adjusted Basis
-- Cost of Sales, excluding the impact of the Puerto Rico excise tax,
increased 0.3 points to 14.7 percent in the fourth quarter of 2012 and
increased 0.4 points to 14.4 percent for the full year due to product
mix, offset partially by manufacturing efficiencies and higher average
net sales price.
-- Research & Development (R&D) expenses increased 9 percent in the fourth
quarter of 2012 driven by later-stage clinical programs, primarily AMG
145 and romosozumab (AMG 785). For the full year, R&D expenses increased
6 percent driven by later-stage clinical programs, primarily AMG 145 and
romosozumab (AMG 785), offset partially by reduced expenses associated
with marketed product support.
-- Selling, General & Administrative (SG&A) expenses increased 13 percent
in the fourth quarter of 2012 driven by higher ENBREL profit share
expenses and international expansion. ENBREL profit share expenses
increased 27 percent to $414 million in the fourth quarter. For the
full year, SG&A expenses increased 6 percent, driven primarily by higher
ENBREL profit share expenses and international expansion, offset
partially by a favorable change to the estimated U.S. healthcare reform
federal excise fee. ENBREL profit share expenses increased 16 percent to
$1,495 million in 2012.
$Millions, except percentages
On an Adjusted Basis Q4 '12 Q4 '11 YOY D FY '12 FY '11 YOY D
------ ------ ----- ------ ------ -----
Cost of Sales $727 $643 13% $2,735 $2,345 17%
% of sales 16.8% 16.5% 0.3 pts 16.4% 15.3% 1.1 pts
% of sales
(Excluding
PR excise
tax) 14.7% 14.4% 0.3 pts 14.4% 14.0% 0.4 pts
Research & Development $917 $842 9% $3,296 $3,116 6%
% of sales 21.1% 21.6% (0.5) pts 19.8% 20.4% (0.6) pts
Selling, General & Administrative $1,351 $1,199 13% $4,717 $4,434 6%
% of sales 31.2% 30.7% 0.5 pts 28.3% 29.0% (0.7) pts
TOTAL Operating Expenses $2,995 $2,684 12% $10,748 $9,895 9%
pts: percentage points
----------------------
-- Tax Rate increased by 1.8 points to 16.1 percent in the fourth quarter
of 2012 due primarily to the unfavorable tax impact of changes in the
jurisdictional mix of income and expenses, as well as the benefit in the
fourth quarter of 2011 from the federal R&D tax credit which was not
reinstated prior to 2012 year-end. This increase was offset partially by
the favorable resolution of certain state tax matters related to prior
years. For the full year, the adjusted tax rate increased 1.6 points to
15.9 percent due primarily to the federal R&D tax credit included in
2011 but not in 2012, the unfavorable tax impact of changes in the
jurisdictional mix of income and expenses, offset partially by the
favorable resolution of certain state tax matters related to prior
years.
On an Adjusted Basis Q4 '12 Q4 '11 YOY D FY '12 FY '11 YOY D
-------------------- ------ ------ ----- ------ ------ -----
Tax Rate 16.1% 14.3% 1.8 pts 15.9% 14.3% 1.6 pts
Tax Rate (Excluding PR
excise tax credits) 20.3% 18.1% 2.2 pts 20.3% 19.2% 1.1 pts
pts: percentage points
----------------------
Cash Flow and Balance Sheet Discussion
-- The Company generated $0.6 billion of free cash flow in the fourth
quarter of 2012 versus $1.4 billion in the fourth quarter of 2011. The
decrease was driven by a $0.8 billion payment related to a previously
disclosed legal settlement. For the full year, free cash flow increased
$0.7 billion to $5.2 billion driven by improved collections of
receivables, termination of fixed to floating interest rate swap
agreements, and higher net income, offset partially by the
aforementioned legal settlement payment.
-- During the fourth quarter, Amgen repurchased approximately 14 million
shares of common stock at a total cost of $1.2 billion and at an average
price of $86.56. This brings the total shares repurchased under its $10
billion authorized stock repurchase program to 146 million at a total
cost of $9.7 billion and at an average price of $66.37. The Company
previously announced a $2 billion increase in share repurchase
authorization by its Board of Directors. Amgen expects that this
increase will cover the Company's share repurchase activity into 2014.
-- The Company previously announced that its Board of Directors declared a
$0.47 per share dividend for the first quarter of 2013. The dividend
will be paid on March 7, 2013, to all stockholders of record as of the
close of business on Feb. 13, 2013. This represents a 31 percent
increase from that paid in each of the previous four quarters.
$Billions, except shares Q4 '12 Q4 '11 YOY D FY '12 FY '11 YOY D
------ ------ ----- ------ ------ -----
Operating Cash Flow $0.8 $1.6 ($0.8) $5.9 $5.1 $0.8
Capital Expenditures 0.2 0.2 0.0 0.7 0.6 0.1
Free Cash Flow 0.6 1.4 (0.8) 5.2 4.5 0.7
Dividend Paid 0.3 0.2 0.1 1.1 0.5 0.6
Cost of Shares
Repurchased 1.2 5.2 (4.0) 4.7 8.3 (3.6)
Adjusted Avg.
Diluted Shares
(millions) 778 860 (82) 786 912 (126)
Cash Balance 24.1 20.6 3.5 24.1 20.6 3.5
Adjusted Debt
Outstanding 26.5 21.6 4.9 26.5 21.6 4.9
Stockholders' Equity 19.1 19.0 0.1 19.1 19.0 0.1
Note: Numbers may not add due to
rounding
--------------------------------
2013 Guidance
For the full year 2013, the Company expects:
-- Total revenues to be in the range of $17.8 billion to $18.2 billion and
adjusted EPS to be in the range of $6.85 to $7.15.
-- Adjusted tax rate to be in the range of 14 percent to 15 percent. This
reflects the impact of the foreign tax credit associated with the Puerto
Rico excise tax. Excluding the Puerto Rico excise tax, Amgen expects the
adjusted tax rate for 2013 to be in the range of 17 percent to 18
percent.
-- Capital expenditures to be approximately $700 million.
Product and Pipeline Update
-- AMG 145: The Company recently initiated Phase 3 studies in subjects
with high levels of LDL cholesterol.
-- Trebananib (AMG 386): Enrollment has resumed for the Phase 3 study in
recurrent ovarian cancer that was previously suspended due to DOXIL(®)
(doxorubicin HCl liposome injection) supply issues.
-- Aranesp: The Company announced top-line results of the Phase 3
RED-HF(®) (Reduction of Events With Darbepoetin Alfa in Heart Failure)
Trial.
-- deCODE Genetics: The Company completed the acquisition of deCODE
Genetics in December 2012.
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, 2012 and 2011 exclude, for the applicable periods, certain expenses related to acquisitions, cost-savings initiatives, various legal proceedings, non-cash interest expense associated with our convertible notes 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, 2012 and 2011. In addition, management has presented its outstanding debt in accordance with GAAP and on an "adjusted" (or non-GAAP) basis as of Dec. 31, 2012 and 2011. 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 discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe, effective medicines from lab to manufacturing plant to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. To learn more about our pioneering science and vital medicines, visit www.amgen.com. 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, 2011, and in our 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 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 health care 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 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,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Revenues:
Product sales $4,337 $3,907 $16,639 $15,295
Other revenues 84 66 626 287
Total revenues 4,421 3,973 17,265 15,582
----- ----- ------ ------
Operating expenses:
Cost of sales
(excludes
amortization
of certain
acquired intangible assets
presented below) 852 656 2,918 2,427
Research and
development 938 851 3,380 3,167
Selling,
general and
administrative 1,370 1,208 4,801 4,486
Amortization
of certain
acquired
intangible
assets 73 73 294 294
Other 100 23 295 896
Total operating expenses 3,333 2,811 11,688 11,270
----- ----- ------ ------
Operating income 1,088 1,162 5,577 4,312
Interest expense, net 291 195 1,053 610
Interest and other income, net 126 84 485 448
--- --- --- ---
Income before income taxes 923 1,051 5,009 4,150
Provision for income taxes 135 117 664 467
Net income $788 $934 $4,345 $3,683
==== ==== ====== ======
Earnings per share:
Basic $1.03 $1.09 $5.61 $4.07
Diluted $1.01 $1.08 $5.52 $4.04
Average shares used in calculation
of earnings
per share:
Basic 763 854 775 905
Diluted 778 861 787 912
Amgen Inc.
Condensed Consolidated Balance Sheets - GAAP
(In millions)
(Unaudited)
December 31, December 31,
2012 2011
---- ----
Assets
Current assets:
Cash, cash
equivalents
and marketable
securities $24,061 $20,641
Trade
receivables,
net 2,518 2,896
Inventories 2,744 2,484
Other current
assets 1,886 1,572
Total
current
assets 31,209 27,593
Property, plant and equipment, net 5,326 5,420
Intangible assets, net 3,968 2,584
Goodwill 12,662 11,750
Other assets 1,133 1,524
----- -----
Total assets $54,298 $48,871
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts
payable and
accrued
liabilities $5,608 $5,670
Current portion
of long-term
debt 2,495 84
Total
current
liabilities 8,103 5,754
Long-term debt 24,034 21,344
Other non-current liabilities 3,101 2,744
Stockholders' equity 19,060 19,029
------ ------
Total liabilities and stockholders' equity $54,298 $48,871
======= =======
Shares outstanding 756 796
Amgen Inc.
GAAP to "Adjusted" Reconciliations
(In millions)
(Unaudited)
Three months ended Years ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
GAAP cost of sales $852 $656 $2,918 $2,427
Adjustments to cost of sales:
Certain charges pursuant to our continuing
efforts to improve cost efficiencies in our
operations (a) (118) (11) (160) (65)
Acquisition-related expenses (4) - (11) (7)
Stock option expense (b) (3) (2) (12) (10)
Total adjustments to cost of sales (125) (13) (183) (82)
Adjusted cost of sales $727 $643 $2,735 $2,345
====
GAAP research and development expenses $938 $851 $3,380 $3,167
Adjustments to research and development
expenses:
Acquisition-related expenses (16) (1) (50) (28)
Certain charges pursuant to our continuing
efforts to improve cost efficiencies in our
operations - - (12) -
Reversal of previously accrued expenses for
bonuses and stock-based compensation awards,
which were forfeited as a result of the
employees' termination pursuant to our
continuing efforts to improve cost efficiencies
in our operations - - - 12
Stock option expense (b) (5) (8) (22) (35)
Total adjustments to research and development
expenses (21) (9) (84) (51)
Adjusted research and development expenses $917 $842 $3,296 $3,116
====
GAAP selling, general and administrative
expenses $1,370 $1,208 $4,801 $4,486
Adjustments to selling, general and
administrative expenses:
Acquisition-related expenses (14) (1) (59) (12)
Stock option expense (b) (5) (8) (25) (40)
Total adjustments to selling, general and
administrative expenses (19) (9) (84) (52)
Adjusted selling, general and administrative
expenses $1,351 $1,199 $4,717 $4,434
======
GAAP operating expenses $3,333 $2,811 $11,688 $11,270
Adjustments to operating expenses:
Adjustments to cost of sales (125) (13) (183) (82)
Adjustments to research and development expenses (21) (9) (84) (51)
Adjustments to selling, general and
administrative expenses (19) (9) (84) (52)
Non-cash amortization of product technology
rights acquired in a prior year business
combination (73) (73) (294) (294)
Certain charges pursuant to our continuing
efforts to improve cost efficiencies in our
operations (69) (30) (175) (109)
Acquisition-related expenses (6) - (25) -
(Expense)/benefit resulting from changes in the
estimated fair values of the contingent
consideration obligations related to a prior
year business combination (26) 8 (31) (1)
Benefit/(expenses) related to various legal
proceedings 1 (1) (64) (786)
Total adjustments to operating expenses (338) (127) (940) (1,375)
Adjusted operating expenses $2,995 $2,684 $10,748 $9,895
======
GAAP operating income $1,088 $1,162 $5,577 $4,312
Adjustments to operating expenses 338 127 940 1,375
Adjusted operating income $1,426 $1,289 $6,517 $5,687
======
GAAP income before income taxes $923 $1,051 $5,009 $4,150
Adjustments to income before income taxes:
Adjustments to operating expenses 338 127 940 1,375
Non-cash interest expense associated with our
convertible notes 36 34 140 143
Total adjustments to income before income taxes 374 161 1,080 1,518
Adjusted income before income taxes $1,297 $1,212 $6,089 $5,668
======
GAAP provision for income taxes $135 $117 $664 $467
Adjustments to provision for income taxes:
Income tax effect of the above adjustments (c) 97 56 329 331
Income tax net expense/(benefit) related to
certain prior period items excluded from
"Adjusted" earnings (23) - (23) 12
Total adjustments to provision for income taxes 74 56 306 343
Adjusted provision for income taxes $209 $173 $970 $810
====
GAAP net income $788 $934 $4,345 $3,683
Adjustments to income before income taxes, net
of the tax effect of the above adjustments 277 105 751 1,187
Income tax net expense/(benefit) related to
certain prior period items excluded from
"Adjusted" earnings 23 - 23 (12)
Adjusted net income $1,088 $1,039 $5,119 $4,858
======
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, 2012 December 31, 2011
----------------- -----------------
GAAP "Adjusted" GAAP "Adjusted"
---- ---------- ---- ----------
Income (Numerator):
Net income for basic and diluted EPS $788 $1,088 $934 $1,039
====
Shares (Denominator):
Weighted-average shares for basic EPS 763 763 854 854
Effect of dilutive securities 15 15 (*) 7 6 (*)
Weighted-average shares for diluted EPS 778 778 861 860
===
Diluted EPS $1.01 $1.40 $1.08 $1.21
=====
Year ended Year ended
December 31, 2012 December 31, 2011
----------------- -----------------
GAAP "Adjusted" GAAP "Adjusted"
---- ---------- ---- ----------
Income (Numerator):
Net income for basic and diluted EPS $4,345 $5,119 $3,683 $4,858
======
Shares (Denominator):
Weighted-average shares for basic EPS 775 775 905 905
Effect of dilutive securities 12 11 (*) 7 7 (*)
Weighted-average shares for diluted EPS 787 786 912 912
===
Diluted earnings per share $5.52 $6.51 $4.04 $5.33
=====
(*) Dilutive securities used to compute "Adjusted" diluted EPS for the three
months and years ended December 31, 2012 and 2011 were computed under the
treasury stock method assuming that we do not expense stock options.
(a) The adjustments during the years ended 2012 and 2011 include incremental
expenses resulting from our transaction with Boehringer Ingelheim. The
adjustment during the three months ended December 31, 2012, relates to a charge
in connection with the rationalization of our worldwide manufacturing
operations.
(b) For the three months and years ended December 31, 2012 and 2011, the total pre-
tax expense for employee stock options was $13 million and $59 million,
respectively and $18 million and $85 million, respectively.
"Adjusted" diluted EPS including the impact of stock option expense for the
three months and years ended December 31, 2012 and 2011 was as follows:
Three months ended Years ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
"Adjusted" diluted EPS, excluding stock option
expense $1.40 $1.21 $6.51 $5.33
Impact of stock option expense (net of tax) (0.01) (0.02) (0.06) (0.07)
------
"Adjusted" diluted EPS, including stock option
expense $1.39 $1.19 $6.45 $5.26
=====
(c) 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
amortization of intangible assets and non-cash interest expense associated
with our convertible notes, 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 years ended December 31, 2012, were
25.9% and 30.5%, respectively, compared with 34.8% and 21.8% for the
corresponding periods of the prior year.
Amgen Inc.
Reconciliation of GAAP Debt Outstanding to "Adjusted" Debt Outstanding
(In millions)
(Unaudited)
GAAP Adjustments for accounting
standard (a) "Adjusted"
---- --------------------------- ----------
December 31, 2011 $21,428 $154 $21,582
December 31, 2012 $26,529 $12 $26,541
(a) To exclude the impact of bifurcating the debt and equity components of
our convertible notes as required by U.S. accounting standards for
these securities commencing in 2009.
Reconciliation of Free Cash Flow
(In millions)
(Unaudited)
Three months ended Years ended
December 31, December 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Cash Flows
from
Operations $812 $1,584 $5,882 $5,119
Capital
Expenditures (200) (224) (689) (567)
Free Cash
Flow $612 $1,360 $5,193 $4,552
==== ====== ====== ======
Amgen Inc.
Reconciliation of GAAP EPS Guidance to "Adjusted"
EPS Guidance for the Year Ending December 31, 2013
(Unaudited)
2013
----
GAAP EPS (diluted) guidance $6.46 - $6.76
Known adjustments to arrive at "Adjusted" earnings*:
Amortization
of acquired
intangible
assets (a) 0.34
Stock option
expense (b) 0.04
Non-cash
interest
expense
associated
with our
convertible
notes (c) 0.01
"Adjusted" EPS (diluted) guidance $6.85 - $7.15
===== === =====
* The known adjustments are presented net of their related aggregate tax impact
of approximately $0.19 per share.
(a) To exclude the non-cash amortization of intangible assets acquired in prior
year business combinations.
(b) To exclude stock option expense.
(c) To exclude the non-cash interest expense associated with our convertible
notes.
Reconciliation of GAAP Tax Rate Guidance to "Adjusted"
Tax Rate Guidance for the Year Ending December 31, 2013
(Unaudited)
2013 with PR excise tax 2013 without PR excise tax
credit credit
------------------------ ---------------------------
GAAP tax rate guidance 12.5% - 13.6% 15.8% - 16.9%
Tax rate effect
of known
adjustments
discussed above 1.5% - 1.4% 1.2% - 1.1%
------------ --- --- --- ---
"Adjusted" tax rate guidance 14.0% - 15.0% 17.0% - 18.0%
==== === ==== ==== === ====
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
