Welcome!

.NET Authors: Pat Romanski, Elizabeth White, ChandraShekar Dattatreya, Trevor Parsons, Peter Silva

News Feed Item

Amgen's Full Year 2012 Revenues Increased 11 Percent To $17.3 Billion And Adjusted Earnings Per Share (EPS) Increased 22 Percent To $6.51

Full Year 2012 GAAP EPS Were $5.52

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 Δ


FY '12


FY '11


YOY Δ














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 Δ



US

ROW

TOTAL


TOTAL


TOTAL










Neulasta®/ NEUPOGEN®


$1,026

$280

$1,306


$1,319


(1%)

Neulasta®


775

219

994


998


0%

NEUPOGEN®


251

61

312


321


(3%)

Enbrel®


1,086

75

1,161


945


23%

Aranesp®


187

302

489


538


(9%)

EPOGEN®


479

0

479


486


(1%)

Sensipar® / Mimpara®


177

79

256


216


19%

Vectibix®


30

61

91


87


5%

Nplate®


57

44

101


80


26%

XGEVA®


178

37

215


134


60%

Prolia®


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 Δ



US

ROW

TOTAL


TOTAL


TOTAL










Neulasta®/ NEUPOGEN®


$4,214

$1,138

$5,352


$5,212


3%

Neulasta®


3,207

885

4,092


3,952


4%

NEUPOGEN®


1,007

253

1,260


1,260


0%

Enbrel®


3,967

269

4,236


3,701


14%

Aranesp®


782

1,258

2,040


2,303


(11%)

EPOGEN®


1,941

0

1,941


2,040


(5%)

Sensipar® / Mimpara®


639

311

950


808


18%

Vectibix®


122

237

359


322


11%

Nplate®


214

154

368


297


24%

XGEVA®


644

104

748


351


*

Prolia®


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 Δ


FY '12


FY '11


YOY Δ
















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 Δ


FY '12


FY '11


YOY Δ
















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 Δ


FY '12


FY '11


YOY Δ
















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 credit


2013 without PR excise tax 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

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.