Amgen Reports First Quarter 2020 Financial Results
THOUSAND OAKS, Calif., April 30, 2020 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the first quarter of 2020 and discussed the company's response to the COVID-19 pandemic.
First Quarter Performance
Key results include:
-- Total revenues increased 11% to $6.2 billion in comparison to the first
quarter of 2019, driven by higher unit demand, offset partially by lower
net selling prices.
-- Product sales increased 12% globally, driven by volume growth across
a number of our newer products, including Otezla(® )(apremilast),
Repatha(®) (evolocumab), MVASI(® )(bevacizumab-awwb), KANJINTI(®)
(trastuzumab-anns) and Evenity(®) (romosozumab-aqqg), offset
partially by declines in select products from the impact of
biosimilar and generic competition.
-- GAAP earnings per share (EPS) decreased 3% to $3.07 driven by the
amortization of costs associated with our Nov. 21, 2019 acquisition of
Otezla, offset partially by increased revenues.
-- GAAP operating income decreased 5% to $2.4 billion and GAAP
operating margin decreased 6.8 percentage points to 40.0% driven by
the amortization of intangible assets from our Otezla acquisition.
-- Non-GAAP EPS increased 17% to $4.17 driven by increased revenues and
fewer weighted-average shares outstanding.
-- Non-GAAP operating income increased 15% to $3.2 billion and non-GAAP
operating margin increased 1.5 percentage points to 53.9%.
-- The Company generated $2.0 billion of free cash flow in the first
quarter versus $1.7 billion in the first quarter of 2019.
-- 2020 total revenues guidance reaffirmed at $25.0-$25.6 billion; EPS
guidance revised to $10.65-$11.45 on a GAAP basis and reaffirmed at
$14.85-$15.60 on a non-GAAP basis.
"I am inspired by the many ways my colleagues at Amgen and others across the industry are stepping up to meet the greatest public health challenge of our lifetime," said Robert A. Bradway, chairman and chief executive officer. "We are committed to an uninterrupted supply of our medicines to patients; advancing potential new medicines to treat serious diseases, including COVID-19; making a difference in the communities where we live and work; and creating long-term value for shareholders."
$Millions, except EPS, dividends paid per share and percentages Q1'20 Q1'19 YOY
Total Revenues $
6,161 $
5,557 11%
GAAP Operating
Income $
2,355 $
2,472 (5%)
GAAP Net Income $
1,825 $
1,992 (8%)
GAAP EPS $
3.07 $
3.18 (3%)
Non-GAAP
Operating Income $
3,176 $
2,770 15%
Non-GAAP Net
Income $
2,476 $
2,230 11%
Non-GAAP EPS $
4.17 $
3.56 17%
Dividends Paid
Per Share $
1.60 $
1.45 10%
---
References in this release to "non-GAAP"
measures, measures presented "on a non-
GAAP basis" and to "free cash flow"
(computed by subtracting capital
expenditures from operating cash flow)
refer to non-GAAP financial measures.
Adjustments to the most directly
comparable GAAP financial measures and
other items are presented on the
attached reconciliations.
Product Sales Performance
-- Total product sales increased 12% for the first quarter of 2020 versus
the first quarter of 2019 driven by 15% volume growth.
-- Prolia(®) (denosumab) sales increased 10% driven by higher unit demand.
-- EVENITY launched in the U.S. and Japan in the first half of 2019,
generating $100 million of sales in the first quarter of 2020.
-- Repatha sales increased 62% driven by 98% volume growth, offset
partially by lower net selling price. Repatha's net selling price was
impacted by the removal of our original list price option to improve
patient affordability, especially for Medicare patients.
-- Aimovig(® )(erenumab-aooe) sales increased 20% driven by 46% volume
growth, offset partially by lower net selling price as we expanded
patient access.
-- Parsabiv(® )(etelcalcetide) sales increased 39% driven by higher unit
demand, offset partially by lower net selling price.
-- Otezla was acquired on Nov. 21, 2019 and generated $479 million of sales
in the first quarter of 2020.
-- Enbrel(®) (etanercept) sales were flat as favorable changes to
estimated sales deductions and inventory were offset by lower unit
demand and lower net selling price.
-- AMGEVITA((TM)) (adalimumab) generated $86 million of sales in the first
quarter of 2020 and is the most prescribed adalimumab biosimilar in
Europe.
-- KYPROLIS(®) (carfilzomib) sales increased 14% driven by higher unit
demand and to a lesser extent, higher net selling price.
-- XGEVA(®) (denosumab) sales increased 2% driven by higher unit demand.
-- Vectibix(®) (panitumumab) sales increased 19% driven by higher unit
demand.
-- Nplate(®) (romiplostim) sales increased 15% driven by higher unit
demand.
-- BLINCYTO(®) (blinatumomab) sales increased 36% driven by higher unit
demand.
-- KANJINTI(®) generated $119 million of sales in the first quarter of
2020.
-- MVASI(®) generated $115 million of sales in the first quarter of 2020.
-- Neulasta(®) (pegfilgrastim) sales decreased 40% driven by the impact of
competition on unit demand and net selling price.
-- NEUPOGEN(®) (filgrastim) sales decreased 11% driven by the impact of
competition on unit demand.
-- EPOGEN(®) (epoetin alfa) sales decreased 29% driven by lower net
selling price and unfavorable changes to estimated sales deductions.
-- Aranesp(®) (darbepoetin alfa) sales increased 2% driven by higher unit
demand and favorable changes in inventory, offset by lower net selling
price.
-- Sensipar/Mimpara(®) (cinacalcet) sales decreased 42% driven by the
impact of competition on unit demand, offset partially by favorable
changes to estimated sales deductions and inventory.
Product Sales Detail by Product and Geographic Region
$Millions, except percentages
Q1'20 Q1'19 YOY
US ROW TOTAL TOTAL TOTAL
Prolia(R) $
422 $
232 $
654 $
592 10%
EVENITY(R) 37 63 100 17
*
Repatha(R) 124 105 229 141 62%
Aimovig(R) 71 71 59 20%
Parsabiv(R) 146 29 175 126 39%
Otezla(R) 377 102 479
*
Enbrel(R) 1,117 36 1,153 1,151 -%
AMGEVITA(TM) 86 86 31
*
KYPROLIS(R) 187 93 280 245 14%
XGEVA(R) 355 126 481 471 2%
Vectibix(R) 80 122 202 170 19%
Nplate(R) 127 91 218 189 15%
BLINCYTO(R) 57 37 94 69 36%
KANJINTI(R) 96 23 119 24
*
MVASI(R) 108 7 115
*
Neulasta(R) 534 75 609 1,021 (40%)
NEUPOGEN(R) 45 20 65 73 (11%)
EPOGEN(R) 155 155 219 (29%)
Aranesp(R) 175 247 422 414 2%
Sensipar(R)/Mimpara(R) 42 81 123 213 (42%)
Other** 24 40 64 61 5%
Total product sales $
4,279 $
1,615 $
5,894 $
5,286 12%
* Change in excess of 100%
** Other includes GENSENTA, IMLYGIC(R), Corlanor(R) and Bergamo.
---
Operating Expense, Operating Margin and Tax Rate Analysis
On a GAAP basis:
-- Total Operating Expenses increased 23% driven by Otezla-related
expenses, including the amortization of intangible assets. Cost of Sales
margin increased 5.7 percentage points driven by amortization of
intangible assets acquired in the Otezla acquisition and an increase in
milestone payments, offset partially by lower manufacturing costs.
Research & Development (R&D) expenses increased 8% driven by higher
late-stage development program support of our oncology portfolio,
primarily AMG 510 (sotorasib), along with the recently acquired Otezla,
offset partially by recoveries from our collaboration with BeiGene.
Selling, General & Administrative (SG&A) expenses increased 14% due to
our first full quarter of Otezla commercial-related expenses.
-- Operating Margin decreased 6.8 percentage points to 40.0% driven by the
amortization of intangible assets from our Otezla acquisition.
-- Tax Rate decreased 4.2 percentage points due primarily to amortization
related to the Otezla acquisition, changes in jurisdictional mix of
earnings and an increase in net discrete tax benefits.
On a non-GAAP basis:
-- Total Operating Expenses increased 7% driven by Otezla-related expenses.
Cost of Sales margin decreased 1.6 percentage points driven by lower
manufacturing costs, offset partially by an increase in milestone
payments. R&D expenses increased 8% driven by higher late-stage
development program support of our oncology portfolio, primarily AMG 510
(sotorasib), along with the recently acquired Otezla, offset partially
by recoveries from our collaboration with BeiGene. SG&A expenses
increased 12% due to our first full quarter of Otezla commercial-related
expenses.
-- Operating Margin increased 1.5 percentage points to 53.9%.
-- Tax Rate decreased 1.8 percentage points due primarily to changes in
jurisdictional mix of earnings and an increase in net discrete tax
benefits.
$Millions, except percentages
GAAP
Non-GAAP
Q1'20 Q1'19 YOY Q1'20 Q1'19 YOY
Cost of Sales $
1,513 $
1,055 43% $
771 $
779 (1%)
% of product sales 25.7 20.0
5.7 pts. 13.1 14.7
% % % %
(1.6) pts.
Research & Development $
952 $
879 8% $
927 $
859 8%
% of product sales 16.2 16.6
(0.4) pts. 15.7 16.3
% % % %
(0.6) pts.
Selling, General &
Administrative $
1,316 $
1,154 14% $
1,287 $
1,149 12%
% of product sales 22.3 21.8
0.5 pts. 21.8 21.7
% % % %
0.1 pts.
Other $
25 $
(3)
*
$
$ -%
Total Operating Expenses $
3,806 $
3,085 23% $
2,985 $
2,787 7%
Operating Margin
operating income as % of 40.0 46.8
(6.8) pts. 53.9 52.4
product sales % % % %
1.5 pts.
Tax Rate 9.7 13.9 (4.2) pts. 12.8 14.6
%
%
%
% (1.8) pts.
* Change in excess of 100%
pts: percentage points
---
Cash Flow and Balance Sheet
-- The Company generated $2.0 billion of free cash flow in the first
quarter of 2020 versus $1.7 billion in the first quarter of 2019.
-- The Company's first quarter 2020 dividend of $1.60 per share was
declared on Dec. 11, 2019, and was paid on March 6, 2020, to all
stockholders of record as of Feb. 14, 2020, representing a 10% increase
from the first quarter of 2019.
-- During the first quarter, the Company repurchased 4.3 million shares of
common stock at a total cost of $933 million. At the end of the first
quarter, the Company had $5.5 billion remaining under its stock
repurchase authorization.
$Billions, except shares Q1'20 Q1'19 YOY
Operating
Cash Flow $
2.1 $
1.8 $
0.3
Capital
Expenditures 0.1 0.1 0.0
Free Cash
Flow 2.0 1.7 0.3
Dividends
Paid 0.9 0.9 0.0
Share
Repurchases 0.9 3.0 (2.1)
Average
Diluted
Shares
(millions) 594 626 (32)
Cash and
Investments 8.0 26.3 (18.3)
Debt
Outstanding 31.8 33.0 (2.1)
Stockholders'
Equity 9.5 10.8 (1.3)
Note: Numbers
may not add
due to
rounding
---
2020 Guidance
-- For the full year 2020, the Company reaffirmed total revenues and
non-GAAP EPS guidance:
-- Total revenues in the range of $25.0 billion to $25.6 billion, unchanged
from previous guidance.
-- On a GAAP basis, EPS in the range of $10.65 to $11.45 and a tax rate in
the range of 10.5% to 11.5%.
-- On a non-GAAP basis, EPS in the range of $14.85 to $15.60 and a tax rate
in the range of 13.5% to 14.5%, unchanged from previous guidance.
-- Capital expenditures to be approximately $600 million.
First Quarter Product and Pipeline Update
The Company provided the following updates on selected product and pipeline programs:
AMG 510 (sotorasib)
-- The Company will present the following clinical data as part of the
ASCO20 Virtual Scientific Program, May 29-31:
-- Updated results from the Phase 1 dose escalation study in patients
with advanced colorectal cancer.
-- Updated results from the Phase 1 dose escalation study in patients
with advanced solid tumors other than non-small-cell lung cancer
(NSCLC) and colorectal cancer.
-- The Company reiterated its expectation of initial data in 2020 from a
potentially pivotal Phase 2 monotherapy study in patients with advanced
NSCLC, including at least six months of response data.
BiTE(®) Programs
-- The Company expects initial data from Phase 1 dose escalation studies of
the following half-life extended BiTE(®) molecules in H2 2020:
-- AMG 160 targeting PSMA (prostate specific membrane antigen)
-- AMG 701 targeting BCMA (B-cell maturation antigen)
-- AMG 757 targeting DLL3 (Delta-like ligand 3)
-- Updated results from the Phase 1 dose escalation study of AMG 330, a
bispecific T-cell engager molecule targeting CD33, in patients with
relapsed/refractory acute myeloid leukemia will be presented as part of
the ASCO20 Virtual Scientific Program, May 29-31.
KYPROLIS
-- The FDA has set a Prescription Drug User Fee Act (PDUFA) target action
date of Nov. 15, 2020 for the supplemental New Drug Application (sNDA)
to expand the Prescribing Information to include KYPROLIS in combination
with dexamethasone and DARZALEX(®) (daratumumab) for patients with
relapsed or refractory multiple myeloma based on data from the Phase 3
CANDOR study.
-- In February, a variation to the marketing authorization application was
submitted to the European Medicines Agency to expand the indication for
Kyprolis in relapsed multiple myeloma based on data from the Phase 3
CANDOR study.
XGEVA
-- In April, a marketing authorization for the treatment of skeletal
related events was accepted for review by the Center for Drug Evaluation
in China. XGEVA is included in our strategic collaboration with BeiGene.
ABP 798 (biosimilar rituximab)
-- The FDA has set a Biosimilar User Fee Act target action date of Dec. 19,
2020 for the Biologics License Application for ABP 798, a biosimilar
candidate to Rituxan(®) (rituximab).
Otezla
-- Data from the Phase 3 study in patients with mild-to-moderate psoriasis
are expected in Q2 2020.
-- In April, the U.S. Food and Drug Administration (FDA) approved the sNDA
to add scalp psoriasis data to the U.S. Prescribing Information.
-- In April, the European Commission (EC) approved an additional indication
for the treatment of adult patients with oral ulcers associated with
Behçet's Disease who are candidates for systemic therapy.
Tezepelumab
-- The Company reiterated its expectation of data from the Phase 3
NAVIGATOR study in patients with severe uncontrolled asthma by the end
of 2020.
Omecamtiv mecarbil
-- In February, the Data Monitoring Committee for the Phase 3 GALACTIC-HF
study completed the second and final planned interim analysis for
futility and superiority and recommended that the study continue without
changes to its conduct.
-- The Company reiterated its expectation of data from GALACTIC-HF in Q4
2020.
Repatha
-- In March, the Company announced that Repatha significantly reduced
low-density lipoprotein cholesterol (LDL-C) in patients who are human
immunodeficiency virus-positive and have high LDL-C despite stable
background lipid-lowering therapy.
AMG 890
-- A Phase 2 study is expected to begin in the second half of 2020 for AMG
890, a small interfering RNA molecule that lowers lipoprotein(a).
COVID-19
-- The Company announced that Otezla, an oral treatment approved in more
than 50 countries for inflammatory diseases such as psoriasis and
psoriatic arthritis, will be investigated as a potential
immunomodulatory treatment in adult patients with COVID-19 in upcoming
platform trials.
-- In April, the Company announced a collaboration with Adaptive
Biotechnologies to discover and develop fully human neutralizing
antibodies targeting SARS-CoV-2 to potentially prevent or treat
COVID-19.
-- The Company provided the following updates on aspects of its R&D
activities
-- Study start-up activities are continuing where possible to allow
rapid site activation and enrollment when that becomes feasible.
-- Study procedures are being implemented consistent with recent
guidance from regulators to maintain patient safety and study data
integrity.
-- Enrollment is paused in clinical trials where there is uncertainty
around the ability of sites to ensure subject safety or data
integrity.
-- Research activities are increasing in various geographies as the
situation safely permits.
-- Medical conferences and journals are being engaged to ensure
continued dissemination of important data in a timely manner.
KEYTRUDA is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co. Inc.
DARZALEZX is a registered trademark of Janssen Biotech, Inc.
Rituxan is a registered trademark of Biogen Inc.
Tezepelumab is being developed in collaboration with AstraZeneca
Omecamtiv mecarbil is being developed under a collaboration between Amgen and Cytokinetics, with funding and strategic support from Servier
Non-GAAP Financial Measures
In this news release, management has presented its operating results for the first quarters of 2020 and 2019, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2020 EPS and tax rate guidance in accordance with GAAP and on a non-GAAP basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, restructuring and certain other items from the related GAAP financial measures. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the first quarters of 2020 and 2019. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP.
The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor's overall understanding of the financial performance and prospects for the future of the Company's ongoing business activities by facilitating comparisons of results of ongoing business operations among current, past and future periods. The Company believes that FCF provides a further measure of the Company's liquidity.
The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
About Amgen
Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.
Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.
For more information, visit www.amgen.com and follow us on www.twitter.com/amgen.
Forward-Looking Statements
This news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including any statements on the outcome, benefits and synergies of collaborations, or potential collaborations, with any other company, including Adaptive Biotechnologies (including statements regarding such collaboration's ability to discover and develop fully-human neutralizing antibodies targeting SARS-CoV-2 to potentially prevent or treat COVID-19), BeiGene, Ltd., or the Otezla acquisition, including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion, as well as estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes, effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, outcomes, progress, or effects relating to studies of Otezla as a potential treatment for COVID-19, and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission reports filed by Amgen, including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K. Unless otherwise noted, Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products, including our devices, after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. In addition, our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation. We perform a substantial amount of our commercial manufacturing activities at a few key facilities, including in Puerto Rico, and also depend on third parties for a portion of our manufacturing activities, and limits on supply may constrain sales of certain of our current products and product candidate development. An outbreak of disease or similar public health threat, such as COVID-19, and the public and governmental effort to mitigate against the spread of such disease, could have a significant adverse effect on the supply of materials for our manufacturing activities, the distribution of our products, the commercialization of our product candidates, and our clinical trial operations, and any such events may have a material adverse effect on our product development, product sales, business and results of operations. We rely on collaborations with third parties for the development of some of our product candidates and for the commercialization and sales of some of our commercial products. In addition, we compete with other companies with respect to many of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indication for an existing product 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. Certain of our distributors, customers and payers have substantial purchasing leverage in their dealings with us. The discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations. Our efforts to collaborate with or acquire other companies, products or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful. A breakdown, cyberattack or information security breach could compromise the confidentiality, integrity and availability of our systems and our data. Our stock price is volatile and may be affected by a number of events. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all.
CONTACT: Amgen, Thousand Oaks
Trish Rowland, 805-447-5631 (media)
Arvind Sood, 805-447-1060 (investors)
Amgen Inc.
Consolidated Statements of Income - GAAP
(In millions, except per-share data)
(Unaudited)
Three months ended
March 31,
2020 2019
---
Revenues:
Product
sales $
5,894 $
5,286
Other
revenues 267 271
Total
revenues 6,161 5,557
Operating expenses:
Cost
of
sales 1,513 1,055
Research
and
development 952 879
Selling,
general
and
administrative 1,316 1,154
Other 25 (3)
Total
operating
expenses 3,806 3,085
Operating
income 2,355 2,472
Interest
expense,
net 346 343
Interest
and
other
income,
net 11 185
Income
before
income
taxes 2,020 2,314
Provision
for
income
taxes 195 322
Net
income $
1,825 $
1,992
Earnings per share:
Basic $
3.09 $
3.20
Diluted $
3.07 $
3.18
Weighted-average
shares used in
calculation of
earnings per share:
Basic 590 622
Diluted 594 626
Amgen Inc.
Consolidated Balance Sheets - GAAP
(In millions)
March 31, December 31,
---
2020 2019
---
(Unaudited)
Assets
Current assets:
Cash, cash
equivalents and
marketable
securities $
8,012 $
8,911
Trade receivables,
net 5,009 4,057
Inventories 3,682 3,584
Other current
assets 2,110 1,888
Total current
assets 18,813 18,440
Property, plant
and equipment,
net 4,879 4,928
Intangible assets,
net 18,653 19,413
Goodwill 14,683 14,703
Other assets 4,641 2,223
Total assets $
61,669 $
59,707
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
and accrued
liabilities $
9,987 $
9,882
Current portion of
long-term debt 1,840 2,953
Total current
liabilities 11,827 12,835
Long-term debt 30,008 26,950
Long-term
deferred tax
liabilities 427 606
Long-term tax
liabilities 8,111 8,037
Other noncurrent
liabilities 1,811 1,606
Total
stockholders'
equity 9,485 9,673
Total liabilities
and stockholders'
equity $
61,669 $
59,707
Shares outstanding 588 591
Amgen Inc.
GAAP to Non-GAAP Reconciliations
(Dollars in millions)
(Unaudited)
Three months ended
March 31,
2020 2019
---
GAAP cost of sales $
1,513 $
1,055
Adjustments to cost of sales:
Acquisition-related expenses
(a) (742) (276)
Total adjustments to cost of
sales (742) (276)
Non-GAAP cost of sales $
771 $
779
GAAP cost of sales as a 25.7 20.0
percentage of product sales % %
Acquisition-related expenses
(a) -12.6 -5.3
Non-GAAP cost of sales as a 13.1 14.7
percentage of product sales % %
===
GAAP research and development
expenses $
952 $
879
Adjustments to research and development
expenses:
Acquisition-related expenses
(a) (25) (20)
Total adjustments to research
and development expenses (25) (20)
Non-GAAP research and
development expenses $
927 $
859
GAAP research and development
expenses as a percentage of % %
product sales 16.2 16.6
Acquisition-related expenses
(a) -0.5 -0.3
Non-GAAP research and
development expenses as a % %
percentage of product sales 15.7 16.3
===
GAAP selling, general and
administrative expenses $
1,316 $
1,154
Adjustments to selling, general and
administrative expenses:
Acquisition-related expenses
(a) (29) (4)
Certain net charges pursuant to
our restructuring initiatives - (1)
Total adjustments to selling,
general and administrative
expenses (29) (5)
Non-GAAP selling, general and
administrative expenses $
1,287 $
1,149
GAAP selling, general and
administrative expenses as a % %
percentage of product sales 22.3 21.8
Acquisition-related expenses
(a) -0.5 -0.1
Certain net charges pursuant to
our restructuring initiatives 0.0 0.0
Non-GAAP selling, general and
administrative expenses as a % %
percentage of product sales 21.8 21.7
===
GAAP operating expenses $
3,806 $
3,085
Adjustments to operating expenses:
Adjustments to cost of sales (742) (276)
Adjustments to research and
development expenses (25) (20)
Adjustments to selling, general
and administrative expenses (29) (5)
Certain net charges pursuant to
our restructuring initiatives 2 1
Acquisition-related
adjustments (b) (27) 2
Total adjustments to operating
expenses (821) (298)
Non-GAAP operating expenses $
2,985 $
2,787
GAAP operating income $
2,355 $
2,472
Adjustments to operating
expenses 821 298
Non-GAAP operating income $
3,176 $
2,770
Three months ended
March 31,
2020 2019
---
GAAP operating income as a 40.0 46.8
percentage of product sales % %
Adjustments to cost of sales 12.6 5.3
Adjustments to research and
development expenses 0.5 0.3
Adjustments to selling, general
and administrative expenses 0.5 0.1
Certain net charges pursuant to
our restructuring initiatives -0.1 0.0
Acquisition-related
adjustments (b) 0.4 -0.1
Non-GAAP operating income as a 53.9 52.4
percentage of product sales % %
===
GAAP income before income taxes $
2,020 $
2,314
Adjustments to operating
expenses 821 298
Non-GAAP income before income
taxes $
2,841 $
2,612
GAAP provision for income taxes $
195 $
322
Adjustments to provision for income taxes:
Income tax effect of the above
adjustments (c) 171 68
Other income tax adjustments
(d) (1) (8)
Total adjustments to provision
for income taxes 170 60
Non-GAAP provision for income
taxes $
365 $
382
GAAP tax as a percentage of 9.7 13.9
income before taxes % %
Adjustments to provision for income taxes:
Income tax effect of the above
adjustments (c) 3.1 1.0
Other income tax adjustments
(d) 0.0 -0.3
Total adjustments to provision
for income taxes 3.1 0.7
Non-GAAP tax as a percentage 12.8 14.6
of income before taxes % %
===
GAAP net income $
1,825 $
1,992
Adjustments to net income:
Adjustments to income before
income taxes, net of the
income tax effect 650 230
Other income tax adjustments
(d) 1 8
Total adjustments to net income 651 238
Non-GAAP net income $
2,476 $
2,230
Amgen Inc.
GAAP to Non-GAAP Reconciliations
(In millions, except per-share data)
(Unaudited)
The following table presents the computations for GAAP and non-GAAP diluted earnings per share:
Three months ended Three months ended
March 31, 2020 March 31, 2019
GAAP Non-GAAP GAAP Non-GAAP
---
Net income $
1,825 $
2,476 $
1,992 $
2,230
Weighted-
average
shares for
diluted EPS 594 594 626 626
Diluted EPS $
3.07 $
4.17 $
3.18 $
3.56
(a) The adjustments related primarily
to noncash amortization of
intangible assets from business
acquisitions.
(b) For the three months ended March
31, 2020 the adjustment related
primarily to an impairment charge
associated with an in-process
research and development asset.
(c) The tax effect of the adjustments
between our GAAP and non-GAAP
results takes into account the tax
treatment and related tax rate(s)
that apply to each adjustment in
the applicable tax
jurisdiction(s). Generally, this
results in a tax impact at the
U.S. marginal tax rate for certain
adjustments, including the
majority of amortization of
intangible assets, whereas the tax
impact of other adjustments,
including restructuring
initiatives, depends on whether
the amounts are deductible in the
respective tax jurisdictions and
the applicable tax rate(s) in
those jurisdictions. Due to these
factors, the effective tax rates
for the adjustments to our GAAP
income before income taxes, for
the three months ended March 31,
2020, was 20.8%, compared with
22.8% for the corresponding period
of the prior year.
(d) The adjustments related to certain
acquisition items and prior period
items excluded from GAAP earnings.
Amgen Inc.
Reconciliations of Cash Flows
(In millions)
(Unaudited)
Three months ended
March 31,
2020 2019
Net
cash
provided
by
operating
activities $
2,134 $
1,845
Net
cash
(used
in)
provided
by
investing
activities (230) 3,555
Net
cash
used
in
financing
activities (254) (4,987)
Increase
in
cash
and
cash
equivalents 1,650 413
Cash
and
cash
equivalents
at
beginning
of
period 6,037 6,945
Cash
and
cash
equivalents
at
end
of
period $
7,687 $
7,358
Three months ended
March 31,
2020 2019
---
Net
cash
provided
by
operating
activities $
2,134 $
1,845
Capital
expenditures (142) (116)
Free
cash
flow $
1,992 $
1,729
Amgen Inc.
Reconciliation of GAAP EPS Guidance to Non-GAAP
EPS Guidance for the Year Ending December 31, 2020
(Unaudited)
GAAP diluted EPS
guidance $
10.65 $
11.45
Known adjustments
to arrive at
non-GAAP*:
Acquisition-
related expenses
(a) 4.25 4.30
Legal settlement
proceeds (0.10)
Non-GAAP diluted
EPS guidance $
14.85 $
15.60
* The known adjustments are
presented net of their related tax
impact, which amount to
approximately $0.97 per share.
(a) The adjustments relate
primarily to noncash amortization
of intangible assets acquired in
business acquisitions.
Our GAAP diluted EPS guidance does
not include the effect of GAAP
adjustments triggered by events
that may occur subsequent to this
press release such as
acquisitions, asset impairments,
litigation and changes in the fair
value or our contingent
consideration.
Reconciliation of GAAP Tax Rate Guidance to Non-GAAP
Tax Rate Guidance for the Year Ending December 31, 2020
(Unaudited)
GAAP tax rate guidance 10.5 11.5
% %
Tax rate of known adjustments
discussed above 3.0%
Non-GAAP diluted EPS guidance 13.5 14.5
% %
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SOURCE Amgen
