Second Quarter 2009 Revenue Decreased 1 Percent to
THOUSAND OAKS, Calif.,
Total revenue decreased 1 percent during the second quarter of 2009 to
"We are optimistic about our financial performance in 2009 and are focused
on making denosumab a success," said
Adjusted EPS and adjusted net income for the second quarter of 2009 and 2008 exclude, for the applicable periods, stock option expense, certain expenses related to acquisitions, restructuring charges, the income tax benefit as a result of resolving certain non-routine transfer pricing issues with the Internal Revenue Service (IRS), loss accruals for settlements of certain commercial legal proceedings and certain other items. In addition, adjusted EPS and adjusted net income for the second quarter of 2009 and 2008 exclude the incremental non-cash interest expense resulting from a change in accounting for convertible debt as discussed below. These expenses and other items are itemized on the attached reconciliation tables.
On a reported basis and calculated in accordance with
Product Sales Performance
During the second quarter of 2009, total product sales decreased 2 percent
to
Worldwide sales of Aranesp (darbepoetin alfa) decreased 16 percent to
Sales of EPOGEN (Epoetin alfa) increased 3 percent to
Combined worldwide sales of Neulasta (pegfilgrastim) and NEUPOGEN
(Filgrastim) decreased 4 percent to
Sales of Enbrel (etanercept) increased 7 percent in the second quarter of
2009 to
Worldwide sales of Sensipar (cinacalcet) increased 11 percent to
Vectibix (panitumumab) sales for the second quarter of 2009 were
Operating Expense Analysis on an Adjusted Basis:
Cost of sales increased 3 percent to $527 million in the second
quarter of 2009 versus $512 million in the second quarter of 2008
primarily driven by higher fill and finish costs resulting from lower
utilization at our manufacturing facility in Puerto Rico .
Research & Development (R&D) expenses were $657 million in the second
quarter of 2009 versus $779 million in the second quarter of 2008, a
decrease of 16 percent. This decrease is in part due to the $100
million expense in the second quarter of 2008 resulting from the
upfront payment associated with the Kyowa Hakko collaboration. The
remainder of the expense decrease was primarily driven by lower
clinical trial costs for denosumab and Vectibix registrational
studies, partially offset by a $50 million expense in the second
quarter of 2009 resulting from the payment to obtain an exclusive
license to Cytokinetics' cardiac contractility program.
Selling, General & Administrative (SG&A) expenses were relatively
unchanged at $891 million in the second quarter of 2009 versus $894
million in the prior year. Lower staff related expenses, lower
litigation expenses, and lower enterprise resource planning (ERP)
system related expenses were offset by higher promotional expenses for
marketed products, increased spending for activities in preparation
and anticipation of approval and launch of denosumab, and higher
expenses associated with the Wyeth profit share due to higher ENBREL
sales.
Excluding expenses associated with the Wyeth profit share of $301
million and $283 million in the second quarter of 2009 and 2008,
respectively, adjusted SG&A expenses in the second quarter of 2009
decreased 3 percent versus the same quarter last year.
The adjusted tax rate in the second quarter of 2009 was 18.1 percent
compared to 22.2 percent in the second quarter of 2008. The decrease in the
adjusted tax rate is primarily due to increased bulk manufacturing and profits
in
Average diluted shares for adjusted EPS in the second quarter of 2009 were 1,016 million versus 1,080 million in the second quarter of 2008.
Capital expenditures for the second quarter of 2009 were approximately
2009 Guidance Update
Revenues for 2009 are trending towards the upper end of the current
guidance range of
The Company now expects 2009 capital expenditures to be less than
Second Quarter Product and Pipeline Update
The Company provided updates on selected products and clinical programs.
Denosumab: The Company discussed the previously announced results of its pivotal, Phase 3, head-to-head study where denosumab demonstrated superiority versus Zometa (zoledronic acid) in the treatment of bone metastases in advanced breast cancer patients.
Vectibix: The Company discussed the approval of revisions to the U.S.
prescribing information for the epidermal growth factor receptor (EGFr) class
of antibodies, including Vectibix by the
Motesanib: The Company indicated that enrollment has resumed for the
Phase 3 MONET1 trial evaluating motesanib in combination with paclitaxel and
carboplatin for the first-line treatment of advanced non-small cell lung
cancer (NSCLC). The Company also noted that the data from Phase 2 study
evaluating motesanib in combination with chemotherapy or bevacizumab in
combination with chemotherapy will be presented at the World Conference on
Lung Cancer. Motesanib is part of a broad co-development program between
AMG 423: The Company noted it exercised its option to the worldwide
rights (excluding
Emerging Pipeline: The Company provided an update on several of its clinical programs:
AMG 102: In Phase 2 studies, limited efficacy was seen in glioblastoma multiforme and renal cell carcinoma when AMG 102 was administered in monotherapy, but the effect size was not large enough to warrant moving forward with late-stage studies in these indications. Phase 2 combination studies with AMG 102 in the gastric, prostate, mCRC, and small cell lung cancer settings continue.
Dulanermin: The Company has received a preliminary report on the Phase 2
NSCLC study with dulanermin (rhApo2L/TRAIL), which is being developed in
collaboration with
AMG 222: The Company has received results from a Phase 2a study of AMG 222 in patients with type 2 diabetes. The results support continued Phase 2 development of AMG 222.
AMG 785: The Company announced that it is in the process of initiating Phase 2 studies of AMG 785 (Sclerostin) in fracture healing and postmenopausal osteoporosis
Non-GAAP Financial Measures
Management has presented its operating results in accordance with GAAP and
on an "adjusted" (or non-GAAP basis) for the three and six months ended
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
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 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. 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.
About
Amgen Inc.
Condensed Consolidated Statements of Income and
Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
Three Months Ended Three Months Ended
June 30, 2009 June 30, 2008
------------------------- -----------------------------
Adjust- Adjust-
GAAP ments "Adjusted" GAAP (a) ments "Adjusted"
---- ------- ---------- ------- ------- ----------
Revenues:
Product
sales $3,634 $- $3,634 $3,692 $- $3,692
Other
revenues 79 - 79 72 - 72
--- --- --- --- --- ---
Total
revenues 3,713 - 3,713 3,764 - 3,764
----- --- ----- ----- --- -----
Operating
expenses:
Cost of
sales
(excludes
amortiz-
ation
of certain
acquired
intangible
assets
presented
below) 531 (3) (b) 527 515 (3) (b) 512
(1) (c)
Research and
development 693 (16) (b) 657 809 (11) (b) 779
(3) (c) (1) (c)
(17) (d) (18) (d)
Selling,
general
and
adminis-
trative 910 (16) (b) 891 904 (10) (b) 894
(3) (c)
Amortization
of certain
acquired
intangible
assets 73 (73) (e) - 73 (73) (e) -
Other
charges 49 (29) (c) - 284 (21) (c) -
(20) (f) (263) (f)
----- --- ----- ----- ---- -----
Total
operating
expenses 2,256 (181) 2,075 2,585 (400) 2,185
----- ---- ----- ----- ---- -----
Operating
income 1,457 181 1,638 1,179 400 1,579
Interest
expense,
net 150 (62) (g) 88 137 (58) (g) 79
Interest
and other
income, net 50 - 50 88 - 88
--- --- --- --- --- ---
Income
before
income
taxes 1,357 243 1,600 1,130 458 1,588
Provision
for
income
taxes 88 86 (i) 289 224 129 (l) 353
115 (j)
--- --- --- --- --- ---
Net income $1,269 $42 $1,311 $906 $329 $1,235
====== === ====== ==== ==== ======
Earnings
per share:
Basic $1.25 $1.29 $0.84 $1.15
Diluted (m) $1.25 $1.29 (b) $0.84 $1.14 (b)
Average shares
used in
calculation
of earnings
per share:
Basic 1,013 1,013 1,078 1,078
Diluted (m) 1,017 1,016 (b) 1,081 1,080 (b)
(a) - (m) See explanatory notes on the following pages, which includes a
discussion in note (a) of the retrospectively applied change in
method of accounting for our convertible notes under Financial
Accounting Standards Board's Staff Position No. APB 14-1,
"Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash
Settlement)" ("FSP APB 14-1").
Amgen Inc.
Condensed Consolidated Statements of Income and
Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
Six months ended Six months ended
June 30, 2009 June 30, 2008
-------------------------- ------------------------------
Adjust- Adjust-
GAAP ments "Adjusted" GAAP (a) ments "Adjusted"
---- ------- ---------- -------- ------- ----------
Revenues:
Product
sales $6,872 $- $6,872 $7,229 $- $7,229
Other
revenues 149 - 149 148 - 148
--- --- --- --- --- ---
Total
revenues 7,021 - 7,021 7,377 - 7,377
----- --- ----- ----- --- -----
Operating
expenses:
Cost of sales
(excludes
amortization
of certain
acquired
intangible
assets
presented
below) 1,008 (6) (b) 1,001 1,061 (6) (b) 1,054
(1) (c) (1) (c)
Research and
development 1,326 (27) (b) 1,262 1,503 (23) (b) 1,440
(3) (c) (3) (c)
(34) (d) (36) (d)
(1) (h)
Selling,
general
and
adminis-
trative 1,708 (26) (b) 1,665 1,778 (23) (b) 1,756
(17) (c) 1 (c)
Amortization
of certain
acquired
intangible
assets 147 (147) (e) - 147 (147) (e) -
Other charges 54 (34) (c) - 294 (31) (c) -
(20) (f) (263) (f)
----- --- ----- ----- ---- -----
Total
operating
expenses 4,243 (315) 3,928 4,783 (533) 4,250
----- ---- ----- ----- ---- -----
Operating
income 2,778 315 3,093 2,594 533 3,127
Interest
expense,
net 297 (123) (g) 174 286 (115) (g) 171
Interest
and other
income,
net 108 - 108 202 - 202
--- --- --- --- --- ---
Income
before
income
taxes 2,589 438 3,027 2,510 648 3,158
Provision
for
income
taxes 301 155 (i) 596 504 201 (l) 705
115 (j)
25 (k)
--- --- --- --- --- ---
Net income $2,288 $143 $2,431 $2,006 $447 $2,453
====== ==== ====== ====== ==== ======
Earnings
per share:
Basic $2.24 $2.38 $1.85 $2.27
Diluted (m) $2.23 $2.37 (b) $1.85 $2.26 (b)
Average shares
used
in calculation
of earnings
per share:
Basic 1,023 1,023 1,083 1,083
Diluted (m) 1,027 1,026 (b) 1,086 1,085 (b)
(a) - (m) See explanatory notes on the following pages, which includes a
discussion in note (a) of the retrospectively applied change in
method of accounting for our convertible notes under FSP APB
14-1.
Amgen Inc.
Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
(a) Effective January 1, 2009 , we adopted FSP APB 14-1, which changed
the method of accounting for our convertible notes. In addition, as
required, we revised our previously reported financial statements
to retrospectively apply this change in accounting to prior
periods. Under this new method of accounting, the debt and equity
components of our convertible notes are bifurcated and accounted
for separately. The equity components of our convertible notes are
included in Stockholders' equity in our Condensed Consolidated
Balance Sheets with a corresponding reduction in the carrying
values of our convertible notes as of the date of issuance or
modification, as applicable. The reduced carrying values of our
convertible notes are being accreted back to their principal
amounts through the recognition of non-cash interest expense. This
results in recognizing interest expense on these borrowings at
effective rates approximating what we would have incurred had we
issued nonconvertible debt with otherwise similar terms.
In connection with applying this new accounting to prior periods,
we recorded $58 million and $115 million of additional non-cash
interest expense in the three and six months ended June 30, 2008 ,
respectively. As a result, our previously reported results of
operations calculated in accordance with GAAP have been revised for
the three and six months ended June 30, 2008 , as follows:
Three months ended
June 30, 2008
---------------------------------------------
As originally Effect of FSP APB
reported 14-1 "Revised"
------------- ----------------- ---------
Operating income $1,179 $- $1,179
Interest
expense, net 79 58 137
Interest and
other
income, net 88 - 88
--- --- ---
Income before
income
taxes 1,188 (58) 1,130
Provision for
income
taxes 247 (23) 224
--- --- ---
Net income $941 $(35) $906
==== ==== ====
Earnings per share:
Basic $0.87 $(0.03) $0.84
Diluted $0.87 $(0.03) $0.84
Six months ended
June 30, 2008
---------------------------------------------
As originally Effect of FSP APB
reported 14-1 "Revised"
------------- ----------------- ---------
Operating income $2,594 $- $2,594
Interest
expense, net 171 115 286
Interest and
other
income, net 202 - 202
--- --- ---
Income before
income
taxes 2,625 (115) 2,510
Provision for
income
taxes 548 (44) 504
--- --- ---
Net income $2,077 $(71) $2,006
====== ==== ======
Earnings per share:
Basic $1.92 $(0.07) $1.85
Diluted $1.91 $(0.06) $1.85
(b) To exclude the impact of stock option expense recorded in
accordance with Statement of Financial Accounting Standards
("SFAS") No. 123R. For the three and six months ended June 30,
2009 and 2008, the total pre-tax expense for employee stock options
in accordance with SFAS No. 123R was $35 million and $59 million ,
respectively, and $24 million and $52 million , respectively.
"Adjusted" diluted EPS including the impact of stock option expense
for the three and six months ended June 30, 2009 and 2008 was as
follows:
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
"Adjusted"
diluted EPS,
excluding stock
option expense $1.29 $1.14 $2.37 $2.26
Impact of
stock option
expense
(net of tax) (0.02) (0.01) (0.04) (0.03)
----- ----- ----- -----
"Adjusted"
diluted EPS,
including stock
option expense $1.27 $1.13 $2.33 $2.23
===== ===== ===== =====
(c) To exclude the following (expenses)/recoveries associated with our
restructuring plan announced in August 2007 and certain additional
cost savings initiatives subsequently identified, as follows:
Separation Asset
costs (1) impairment Other (2) Total
---------- ---------- --------- -----
Three months
ended June 30,
2009
-----------------
Cost of sales
(excludes
amortization
of certain
acquired
intangible
assets) $- $(1) $- $(1)
Research and
development
(R&D) 3 (5) (1) (3)
Selling,
general and
administrative
(SG&A) 2 - (5) (3)
Other charges (29) - - (29)
--- --- --- ---
$(24) $(6) $(6) $(36)
==== === === ====
Three months
ended June 30,
2008
---------------
R&D $(1) $- $- $(1)
Other charges - (12) (9) (21)
--- --- --- ---
$(1) $(12) $(9) $(22)
=== ==== === ====
Six months ended
June 30, 2009
----------------
Cost of sales
(excludes
amortization
of certain
acquired
intangible
assets) $- $(1) $- $(1)
R&D 3 (5) (1) (3)
SG&A 2 - (19) (17)
Other charges (34) - - (34)
--- --- --- ---
$(29) $(6) $(20) $(55)
==== === ==== ====
Six months ended
June 30, 2008
----------------
Cost of sales
(excludes
amortization of
certain acquired
intangible
assets) $- $(1) $- $(1)
R&D (3) - - (3)
SG&A - - 1 1
Other charges (4) (14) (13) (31)
--- --- --- ---
$(7) $(15) $(12) $(34)
=== ==== ==== ====
(1) Severance and other separation costs partially offset in 2009 by the
reversal of previously accrued expenses for bonuses and stock-based
compensation awards, which will be forfeited as a result of the
employees' termination.
(2) To exclude (i) from SG&A in 2009, integration costs associated with
certain cost saving initiatives and (ii) from Other charges in 2008,
loss accruals for leases principally related to certain facilities
that will not be used in our business.
(d) To exclude the ongoing, non-cash amortization of the R&D technology
intangible assets acquired with the acquisitions of Abgenix, Inc.
("Abgenix") and Avidia, Inc. ("Avidia").
(e) To exclude the ongoing, non-cash amortization of acquired product
technology rights, primarily ENBREL, related to the Immunex
Corporation ("Immunex ") acquisition.
(f) To exclude loss accruals for settlements of certain commercial legal
proceedings.
(g) To exclude the incremental non-cash interest expense resulting from
our adoption of FSP APB 14-1 (see (a) above).
(h) To exclude merger related expenses incurred due to the Alantos
Pharmaceutical Holding, Inc. acquisition, primarily related to
incremental costs associated with retention.
(i) To reflect the tax effect of the above adjustments for 2009, excluding
certain of the loss accruals for settlements of commercial legal
proceedings (see (f) above).
(j) To exclude the income tax benefit recognized as the result of
resolving certain non-routine transfer pricing issues with the
Internal Revenue Service ("IRS") for prior periods.
(k) To exclude the net tax benefit resulting from adjustments to
previously established deferred taxes, primarily related to prior
acquisitions and stock option expense, due to changes in California
tax law effective for future periods.
(l) To reflect the tax effect of the above adjustments for 2008, excluding
certain of the restructuring charges (see (c) above) and certain of
the loss accruals for settlements of commercial legal proceedings (see
(f) above).
(m) The following table presents the computations for GAAP and "Adjusted"
diluted earnings per share, computed under the treasury stock method.
"Adjusted" earnings per share presented below excludes stock option
expense:
Three months ended Three months ended
June 30, 2009 June 30, 2008
-------------------- ------------------
GAAP "Adjusted" GAAP "Adjusted"
---- ---------- ---- ----------
Income (Numerator):
Net income for
basic and
diluted EPS $1,269 $1,311 $906 $1,235
====== ====== ==== ======
Shares
(Denominator):
Weighted-
average shares
for basic EPS 1,013 1,013 1,078 1,078
Effect of
dilutive
securities 4 3 (*) 3 2 (*)
--- --- --- ---
Weighted-
average shares
for
diluted EPS 1,017 1,016 1,081 1,080
===== ===== ===== =====
Diluted
earnings
per
share $1.25 $1.29 $0.84 $1.14
===== ===== ===== =====
Six months ended Six months ended
June 30, 2009 June 30, 2008
-------------------- -------------------
GAAP "Adjusted" GAAP "Adjusted"
---- ---------- ---- ----------
Income (Numerator):
Net income for
basic and
diluted EPS $2,288 $2,431 $2,006 $2,453
====== ====== ====== ======
Shares
(Denominator):
Weighted-
average shares
for basic EPS 1,023 1,023 1,083 1,083
Effect of
dilutive
securities 4 3 (*) 3 2 (*)
Weighted- --- --- --- ---
average shares
for
diluted EPS 1,027 1,026 1,086 1,085
===== ===== ===== =====
Diluted earnings
per
share $2.23 $2.37 $1.85 $2.26
===== ===== ===== =====
(*) Dilutive securities used to compute "Adjusted" diluted earnings per
share for the three and six months ended June 30, 2009 and 2008 were
computed exclusive of the methodology used to determine dilutive
securities under SFAS No. 123R.
Amgen Inc.
Product Sales Detail by Product and Geographic Region
(In millions)
(Unaudited)
Three months Six months
ended ended
June 30, June 30,
----------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Aranesp(R) - U.S. $338 $427 $630 $832
Aranesp(R) -
International 355 398 689 754
EPOGEN(R) - U.S. 638 622 1,203 1,176
Neulasta(R) - U.S. 625 648 1,219 1,217
NEUPOGEN(R) - U.S. 230 221 432 444
Neulasta(R) -
International 206 214 389 401
NEUPOGEN(R) -
International 97 118 191 225
Enbrel(R) - U.S. 846 789 1,558 1,693
Enbrel(R) -
International 53 52 99 99
Sensipar(R) - U.S. 113 102 212 195
Sensipar(R) -
International 54 48 103 88
Vectibix(R) - U.S. 24 25 49 57
Vectibix(R) -
International 32 7 60 9
Other product
sales - U.S. 19 9 32 18
Other product
sales -
International 4 12 6 21
--- --- --- ---
Total product
sales $3,634 $3,692 $6,872 $7,229
====== ====== ====== ======
U.S. $2,833 $2,843 $5,335 $5,632
International 801 849 1,537 1,597
--- --- ----- -----
Total product
sales $3,634 $3,692 $6,872 $7,229
====== ====== ====== ======
Amgen Inc.
Condensed Consolidated Balance Sheets - GAAP
(In millions)
(Unaudited)
June 30, December 31,
2009 2008 (a)
-------- ------------
Assets
Current assets:
Cash, cash equivalents and
marketable securities $11,965 $9,552
Trade receivables, net 2,182 2,073
Inventories 2,061 2,075
Other current assets 1,488 1,521
----- -----
Total current assets 17,696 15,221
Property, plant and
equipment, net 5,800 5,879
Intangible assets, net 2,780 2,988
Goodwill 11,339 11,339
Other assets 1,225 1,000
----- -----
Total assets $38,840 $36,427
======= =======
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $3,548 $3,886
Current portion of other long-
term debt 1,000 1,000
----- -----
Total current liabilities 4,548 4,886
Convertible notes 4,383 4,257
Other long-term debt 6,088 4,095
Other non-current
liabilities 2,461 2,304
Stockholders' equity 21,360 20,885
------ ------
Total liabilities and
stockholders' equity $38,840 $36,427
======= =======
Shares outstanding 1,015 1,047
(a) As discussed in more detail above in the notes to the Reconciliation
of GAAP Earnings to "Adjusted" Earnings, effective January 1, 2009 , we
adopted FSP APB 14-1, which changed the method of accounting for our
convertible notes. In addition, as required, we revised our previously
reported financial statements to retrospectively apply this change in
accounting to prior periods. As a result, our previously reported
Consolidated Balance Sheet as of December 31, 2008 has been revised as
follows:
December 31, 2008
----------------------------------------------
As originally Effect of FSP APB
reported 14-1 "Revised"
------------- ----------------- --------
Other non-
current assets $1,016 $(16) $1,000
Convertible
notes 5,081 (824)(1) 4,257
Other non-
current
liabilities 1,995 309 (2) 2,304
Stockholders'
equity 20,386 499 (3) 20,885
(1) The reduction in Convertible notes reflects the bifurcation of the
equity components of our convertible notes partially offset by the
accretion of the reduced carrying values resulting from the
recognition of non-cash interest expense through December 31, 2008 .
(2) The increase in Other non-current liabilities reflects the impact of
deferred income taxes.
(3) The increase in Stockholders' equity reflects the addition of the
equity components of our convertible notes, partially offset by (i)
non-cash interest expense recognized through December 31, 2008
related to the accretion of the reduced carrying values of our
convertible notes and (ii) the impact of deferred income taxes.
Amgen Inc.
Reconciliation of GAAP Debt Outstanding to "Adjusted" Debt Outstanding
(In billions)
(Unaudited)
June 30, 2009
--------------------------------------------
FSP APB 14-1
GAAP Adjustments "Adjusted"
-------- ------------- ----------
Total debt
outstanding $11.5 $0.7 (a) $12.2
(a) To exclude the impact of the change in method of accounting for our
convertible notes under FSP APB 14-1, as discussed on the preceding
pages.
Amgen Inc.
Reconciliation of "Adjusted" Earnings Per Share Guidance to GAAP
Earnings Per Share Guidance for the Year Ending December 31, 2009
(Unaudited)
2009
--------------
"Adjusted" earnings
per share guidance $4.80 - $4.95
Known adjustments to
arrive at GAAP earnings:
Amortization of
acquired
intangible assets,
product technology
rights (a) (0.18)
Incremental non-
cash interest
expense (b) (0.15)
Tax settlement (c) 0.11
Stock option expense (d) (0.06) - (0.08)
Cost savings
initiatives (e) (0.04) - (0.05)
Amortization of
acquired
intangible assets,
R&D technology
rights (f) (0.04)
California tax law
change (g) 0.02
Legal settlements (h) (0.01)
--------------
GAAP earnings per
share guidance $4.42 - $4.60
==============
(a) To exclude the ongoing, non-cash amortization of acquired product
technology rights, primarily ENBREL, related to the Immunex
acquisition.
(b) To exclude the incremental non-cash interest expense resulting from
our adoption of FSP APB 14-1.
(c) To exclude the income tax benefit recognized as the result of
resolving certain non-routine transfer pricing issues with the IRS for
prior periods.
(d) To exclude stock option expense associated with SFAS No. 123R.
(e) To exclude costs related to cost saving initiatives.
(f) To exclude the ongoing, non-cash amortization of the R&D technology
intangible assets acquired with the Abgenix and Avidia acquisitions.
(g) To exclude the net tax benefit resulting from adjustments to
previously established deferred taxes, primarily related to prior
acquisitions and stock option expense, due to changes in California
tax law effective for future periods.
(h) To exclude loss accruals for settlements of certain commercial legal
proceedings.
CONTACT: Amgen , Thousand Oaks
David Polk , 805-447-4613 (media)
Arvind Sood, 805-447-1060 (investors)
(LOGO: http://www.newscom.com/cgi-bin/prnh/20081015/AMGENLOGO)
SOURCEAmgen