Amgen's Second Quarter 2005 Adjusted Earnings Per Share Increased 42 Percent to 88 Cents.THOUSAND OAKS Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. , Calif. -- Amgen Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AMGN): --Second Quarter 2005 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Earnings Per Share Increased 44 percent to 82 Cents --2005 Revenue Growth Guidance Raised to Mid-to-High Teens --2005 Adjusted Earnings Per Share Guidance Increased to a Range of $3.10 to $3.20, a Growth Rate of 29 to 33 Percent Amgen (NASDAQ:AMGN) reported adjusted earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) for the second quarter of 2005 of 88 cents, an increase of 42 percent compared to 62 cents during the second quarter of 2004. Adjusted net income rose 36 percent to $1.1 billion compared to $809 million in the second quarter of 2004. The company also increased its full year guidance for total revenue growth to a range of mid-to-high teens from the previous range of low double-digits to mid-teens and for adjusted EPS to a range of $3.10 to $3.20 from the previous range of $2.80 to $2.90, which represents an increase of 29 to 33 percent over 2004 adjusted EPS. During the second quarter, total product sales increased 26 percent to $3.1 billion from $2.4 billion in the second quarter of 2004. Second quarter U.S. sales totaled $2.5 billion, an increase of 26 percent versus the same quarter in 2004. International sales totaled $540 million versus $424 million during the comparable period in 2004, an increase of 27 percent. International sales benefited from foreign exchange by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $31 million. Total revenue increased 23 percent during the second quarter to $3.2 billion. Adjusted earnings per share and adjusted net income for the three months ended June June: see month. 30, 2005 and 2004 primarily exclude certain expenses related to the acquisitions of Immunex Corporation and Tularik Inc. These expenses and other items are itemized on the reconciliation tables below. On a reported basis and calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP), Amgen's earnings per share increased 44 percent to 82 cents in the second quarter of 2005 from 57 cents in the same quarter last year. Net income was $1.0 billion in the second quarter of 2005 versus $748 million for the second quarter of 2004, an increase of 38 percent. "Our strong business momentum continued well into the second quarter, which has enabled us to raise revenue and earnings guidance for the year," said Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) Sharer, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our pipeline continues to advance, which will be key to driving long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth," concluded Sharer. Product Sales Performance Worldwide sales of Aranesp(R) (darbepoetin alfa darbepoetin alfa Aranesp Pharmacologic class: Recombinant human erythropoietin Therapeutic class: Hematopoietic Pregnancy risk category C FDA Boxed Warning), increased 36 percent to $837 million in the second quarter of 2005 versus $617 million during the second quarter of 2004. This growth was driven principally by demand reflecting market share gains and to a lesser extent market growth. U.S. Aranesp sales were $536 million versus $380 million in the prior year, with share gains in all major segments driving growth. International Aranesp sales were $301 million versus $237 million in the same quarter last year. International Aranesp sales benefited from foreign exchange of approximately $17 million in the second quarter.Sales of EPOGEN E·po·gen A trademark for the drug epoetin alfa. epoetin alfa Epogen, Eprex (CA) (UK), Procrit Pharmacologic class: Recombinant human erythropoietin Therapeutic class: (R) (Epoetin alfa e·po·e·tin al·fa n. A recombinant preparation of human erythropoietin used to treat some forms of anemia. epoetin alfa Epogen, Eprex (CA) (UK), Procrit Pharmacologic class: ) during the second quarter were $647 million versus $633 million in the comparable period of 2004. EPOGEN sales increased by two percent in the second quarter of 2005 reflecting a decrease in demand that was offset by wholesaler inventory changes and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. revised estimate Revised estimate The third estimate of GDP released about three months after the measurement period. of dialysis dialysis (dīăl`ĭsĭs), in chemistry, transfer of solute (dissolved solids) across a semipermeable membrane. Strictly speaking, dialysis refers only to the transfer of the solute; transfer of the solvent is called osmosis. demand (primarily spillover spill·o·ver n. 1. The act or an instance of spilling over. 2. An amount or quantity spilled over. 3. A side effect arising from or as if from an unpredicted source: ) for prior quarters. Demand was affected by higher sales incentives Noun 1. sales incentive - remuneration offered to a salesperson for exceeding some predetermined sales goal bonus, incentive - an additional payment (or other remuneration) to employees as a means of increasing output and increased usage of Aranesp in dialysis. Spillover is a result of the company's contractual relationship with Johnson & Johnson. (Please refer to the Company's 2004 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for a more detailed discussion of this relationship and a description of spillover.) Combined worldwide sales of Neulasta(R) (pegfilgrastim pegfilgrastim Neulasta Pharmacologic class: Granulocytic colony stimulating factor Therapeutic class: Hematopoietic drug Pregnancy risk category C Action) and NEUPOGEN Neupogen® Filgrastim Oncology An agent used to ↓ neutrophil recovery time and duration of fever after chemotherapy for AML. See Acute myelogenous leukemia. (R) (filgrastim filgrastim /fil·gras·tim/ (fil-gras´tim) a human granulocyte colony-stimulating factor produced by recombinant technology; used to enhance neutrophil function, stimulating hematopoiesis and decreasing neutropenia. ), were $899 million in the second quarter of 2005 versus $721 million for the second quarter of 2004, an increase of 25 percent. Combined sales growth for Neulasta and NEUPOGEN was primarily driven by increased demand for Neulasta.Combined sales of Neulasta and NEUPOGEN in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. were $698 million in the second quarter of 2005 versus $557 million in the second quarter of 2004, an increase of 25 percent. Combined international sales increased 23 percent to $201 million in the second quarter of 2005 versus $164 million over the same quarter in the prior year. Combined international Neulasta and NEUPOGEN sales benefited from foreign exchange by approximately $11 million in the second quarter of 2005. Sales of Enbrel En·brel A trademark for the drug etanercept. etanercept Enbrel Pharmacologic class: Immunomodulator Therapeutic class: Antiarthritic Pregnancy risk category B (R) (etanercept etanercept /eta·ner·cept/ (e-tan´er-sept) a soluble tumor necrosis factor receptor that inactivates tumor necrosis factor, used in the treatment of rheumatoid arthritis. e·tan·er·cept n. ), increased 45 percent during the second quarter to $639 million versus $440 million during the same period in 2004, driven by strong demand. ENBREL continues to lead the Dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. biologic marketplace and its market share is stable in the competitive Rheumatology rheumatology /rheu·ma·tol·o·gy/ (-tol´ah-je) the branch of medicine dealing with rheumatic disorders, their causes, pathology, diagnosis, treatment, etc. rheu·ma·tol·o·gy n. setting. Operating Expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. Analysis on an Adjusted Basis:
Cost of sales increased to $530 million in the second quarter
of 2005 from $435 million during the second quarter of 2004,
primarily due to higher sales volumes.
Research and development (R&D) expenses totaled $564 million
during the second quarter versus $460 million in the second
quarter of 2004. Second quarter increases were primarily
driven by staff-related expenses in part related to the
Tularik acquisition and key clinical trials including the ramp
up of large-scale Phase 3 trials for AMG 162, Amgen's
investigational therapy for bone loss.
Selling, general and administrative (SG&A) expenses were $646
million in the second quarter versus $587 million for the same
quarter of the prior year. Increases for the second quarter
are a result of higher staff-related expenses in support of
the Company's key products and the Wyeth profit share related
to ENBREL sales growth.
Amgen's adjusted tax rate decreased five percentage points compared to the second quarter of 2004 due to favorable resolution of prior year tax claims with the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. and to a lesser degree, an increase in permanently reinvested earnings of its foreign subsidiaries. The favorable resolution of prior year tax claims benefited adjusted EPS by approximately 4 cents during the quarter. For the remainder of the year, the adjusted tax rate is expected to be slightly lower than the Company's first quarter 2005 adjusted rate of 26.4 percent. Stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. for the second quarter 2005 totaled $750 million representing approximately 12 million shares. In December December: see month. 2004, the Company's board of directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: a stock repurchase program of $5 billion. At the end of the second quarter, the Company had $3.5 billion remaining under this stock authorization The right or permission to use a system resource; the process of granting access. See access control. . Capital expenditures for the second quarter of 2005 were $205 million, primarily due to construction at the company's Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. manufacturing facility, versus $356 million in 2004. The company's cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has were $4.4 billion at the end of the quarter. Second Quarter Product and Pipeline Highlights
AMG 162: During the second quarter, pivotal Phase 3 trials for AMG
162 completed enrollment in postmenopausal osteoporosis and
treatment induced bone loss in non-metastatic breast cancer and
prostate cancer.
Aranesp: Amgen announced the submission of a supplemental
Biologics License Application (sBLA) to the U.S. Food and Drug
Administration (FDA) for Aranesp. The sBLA is based on Phase 3
data that Amgen believes will demonstrate Aranesp administered
every three weeks is safe and effective in the treatment of
chemotherapy-induced anemia in patients with non-myeloid
malignancies.
New interim data for Aranesp suggesting a major response in anemic
patients with myelodysplastic syndromes (MDS) was recently
presented at the 17th International Symposium of the Multinational
Association of Supportive Care in Cancer (MASCC) at Geneva. The
data was generated from a Phase 2 study evaluating the use of 500
mcg of Aranesp every three weeks to treat anemia in patients with
MDS.
Enbrel: During the quarter, the FDA approved an expanded
indication for ENBREL to improve physical function in patients
with psoriatic arthritis. ENBREL is the first and only treatment
to receive this expanded indication.
Panitumumab: Amgen, together with its partner Abgenix, announced
the initiation of a Phase 3 clinical study to evaluate the
potential benefits of adding panitumumab, an experimental fully
human antibody to bevacizumab (Avastin) and chemotherapy. The
clinical trial called the PACCE (Panitumumab Advanced Colorectal
Cancer Evaluation) study is a randomized, multi-center, open label
study with endpoints of progression-free survival, overall
survival and response rate.
AMG 531: Amgen is in the process of filing an IND in
chemotherapy-induced thrombocytopenia (CIT) for AMG 531. Studies
in CIT will begin in 2005.
For more product information or the full prescribing information, please refer to the Amgen Web site at www.amgen.com. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 December 31, 2004, and in our periodic reports on Form 10-Q Form 10-Q See 10-Q. and Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 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, sales growth of recently launched products, difficulties or delays in manufacturing our products, and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments (domestic or foreign) involving current and future products and manufacturing facilities. In addition, sales of our products are affected by reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. policies imposed by first party payors, including governments, private insurance plans and managed care providers, and may be affected by domestic and international trends toward managed care and healthcare cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. as well as possible U.S. legislation affecting pharmaceutical pricing and reimbursement. Government 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 Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . We, or others could identify side effects Side effects Effects of a proposed project on other parts of the firm. or manufacturing problems with our products after they are on the market. 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. In addition, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated in·val·i·date tr.v. in·val·i·dat·ed, in·val·i·dat·ing, in·val·i·dates To make invalid; nullify. in·val or circumvented by our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. . Further, some raw materials, medical devices, and component parts for our products are supplied by sole first party suppliers. About Amgen Amgen is a global biotechnology biotechnology, the use of biological processes, as through the exploitation and manipulation of living organisms or biological systems, in the development or manufacture of a product or in the technological solution to a problem. company that discovers, develops, manufactures and markets important human therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. based on advances in cellular and molecular biology molecular biology, scientific study of the molecular basis of life processes, including cellular respiration, excretion, and reproduction. The term molecular biology was coined in 1938 by Warren Weaver, then director of the natural sciences program at the Rockefeller .
Amgen Inc.
Condensed Consolidated Statements of Operations and
Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
Three Months Ended
June 30, 2005
------------------------------
GAAP Adjustments "Adjusted"
------------------------------
Revenues:
Product sales $3,072 $- $3,072
Other revenues 100 - 100
------- ----------- ----------
Total revenues 3,172 - 3,172
Operating expenses:
Cost of sales (excludes amortization
of acquired intangible assets
presented below) 530 - 530
Research and development 567 (3)(1) 564
Selling, general and administrative 646 - 646
Amortization of intangible assets 87 (87)(2) -
Legal settlements 49 (49)(3) -
------- ----------- ----------
Total operating expenses 1,879 (139) 1,740
Operating income 1,293 139 1,432
Interest and other (expense)/income,
net 6 (20)(4) (14)
------- ----------- ----------
Income before income taxes 1,299 119 1,418
Provision for income taxes 270 44 (7) 314
------- ----------- ----------
Net income $1,029 $75 $1,104
======= =========== ==========
Earnings per share:
Basic $0.83 $0.90
Diluted (8) $0.82 $0.88
Shares used in calculation of
earnings per share:
Basic 1,233 1,233
Diluted (8) 1,250 1,250
(1) - (8) See explanatory notes
Three Months Ended
June 30, 2004
-------------------------------
GAAP Adjustments "Adjusted"
-------------------------------
Revenues:
Product sales $2,431 $- $2,431
Other revenues 154 - 154
------- ----------- ----------
Total revenues 2,585 - 2,585
Operating expenses:
Cost of sales (excludes amortization
of acquired intangible assets
presented below) 435 - 435
Research and development 468 (8)(5) 460
Selling, general and
administrative 591 (4)(5) 587
Amortization of intangible assets 84 (84)(2) -
Legal settlements - - -
------- ----------- ----------
Total operating expenses 1,578 (96) 1,482
Operating income 1,007 96 1,103
Interest and other
(expense)/income, net 10 - 10
------- ----------- ----------
Income before income taxes 1,017 96 1,113
Provision for income taxes 269 35 (7) 304
------- ----------- ----------
Net income $748 $61 $809
======= =========== ==========
Earnings per share:
Basic $0.59 $0.64
Diluted (8) $0.57 $0.62
Shares used in calculation of
earnings per share:
Basic 1,268 1,268
Diluted (8) 1,318 1,318
(1) - (8) See explanatory notes
Amgen Inc.
Condensed Consolidated Statements of Operations and
Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
Six Months Ended
June 30, 2005
------------------------------
GAAP Adjustments "Adjusted"
------------------------------
Revenues:
Product sales $5,807 $- $5,807
Other revenues 198 - 198
------- ----------- ----------
Total revenues 6,005 - 6,005
Operating expenses:
Cost of sales (excludes amortization
of acquired intangible assets
presented below) 1,019 - 1,019
Research and development 1,091 (6)(1) 1,085
Selling, general and administrative 1,223 - 1,223
Amortization of intangible assets 174 (174)(2) -
Legal settlements 49 (49)(3) -
------- ----------- ----------
Total operating expenses 3,556 (229) 3,327
Operating income 2,449 229 2,678
Interest and other (expense)/income,
net (4) (20)(4) (4)
20 (6)
------- ----------- ----------
Income before income taxes 2,445 229 2,674
Provision for income taxes 562 84 (7) 646
------- ----------- ----------
Net income $1,883 $145 $2,028
======= =========== ==========
Earnings per share:
Basic $1.52 $1.63
Diluted (8) $1.49 $1.60
Shares used in calculation of
earnings per share:
Basic 1,241 1,241
Diluted (8) 1,270 1,270
(1) - (8) See explanatory notes
Six Months Ended
June 30, 2004
------------------------------
GAAP Adjustments "Adjusted"
------------------------------
Revenues:
Product sales $4,639 $- $4,639
Other revenues 289 - 289
------- ----------- ----------
Total revenues 4,928 - 4,928
Operating expenses:
Cost of sales (excludes amortization
of acquired intangible assets
presented below) 809 (2)(5) 807
Research and development 909 (16)(5) 893
Selling, general and administrative 1,107 (8)(5) 1,099
Amortization of intangible assets 168 (168)(2) -
Legal settlements - - -
------- ----------- ----------
Total operating expenses 2,993 (194) 2,799
Operating income 1,935 194 2,129
Interest and other (expense)/income, net 31 - 31
------- ----------- ----------
Income before income taxes 1,966 194 2,160
Provision for income taxes 528 71 (7) 599
------- ----------- ----------
Net income $1,438 $123 $1,561
======= =========== ==========
Earnings per share:
Basic $1.13 $1.22
Diluted (8) $1.09 $1.19
Shares used in calculation of
earnings per share:
Basic 1,274 1,274
Diluted (8) 1,326 1,326
(1) - (8) See explanatory notes
Amgen Inc.
Notes to Reconciliation of GAAP Earnings to "Adjusted" Earnings
(In millions, except per share data)
(Unaudited)
(1) To exclude the incremental compensation provided to certain
Tularik Inc. ("Tularik") employees principally related to non-cash
compensation expense associated with stock options assumed in
connection with the acquisition and amounts payable under the
Tularik short-term retention plan. The total estimated remaining
costs of such incremental compensation is approximately $21
million, pre-tax.
(2) To exclude the ongoing, non-cash amortization of acquired
intangible assets, primarily Enbrel(R), related to the Immunex
Corporation ("Immunex") acquisition. The total 2005 annual
non-cash charge is currently estimated to be approximately $347
million, pre-tax.
(3) To exclude the impact of legal settlements incurred, net of
amounts previously accrued, primarily related to settling a patent
legal proceeding.
(4) To exclude the net gain realized on the termination of a
manufacturing agreement with Genentech, Inc. ("Genentech") for the
production of ENBREL at Genentech's manufacturing facility in
South San Francisco.
(5) To exclude the incremental compensation payable to certain Immunex
employees principally under the Immunex short-term retention plan.
All amounts have been incurred under this plan.
(6) To exclude the pro rata portion of the debt issuance costs that
were immediately charged to interest expense, as a result of
certain holders of the convertible notes exercising their March 1,
2005 put option and the related convertible notes being repaid in
cash.
(7) To reflect the tax effect of the above adjustments.
(8) The following table presents the computations for GAAP and
"Adjusted" diluted earnings per share computed under the treasury
stock and the "if-converted" methods:
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
------------------- ------------------
GAAP "Adjusted" GAAP "Adjusted"
------------------- ------------------
Income (Numerator):
Net income for basic EPS $1,029 $1,104 $748 $809
Adjustment for interest
expense on convertible
notes, net of tax (A) 1 1 5 5
------- ---------- ------- ----------
Net income for diluted
EPS, after assumed
conversion of
convertible notes $1,030 $1,105 $753 $814
======= ========== ======= ==========
Shares (Denominator):
Weighted-average shares
for basic EPS 1,233 1,233 1,268 1,268
Effect of dilutive
securities 9 9 15 15
Effect of convertible
notes, after assumed
conversion (A) 8 8 35 35
------- ---------- ------- ----------
Weighted-average shares
for diluted EPS 1,250 1,250 1,318 1,318
======= ========== ======= ==========
Diluted earnings per share $0.82 $0.88 $0.57 $0.62
======= ========== ======= ==========
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
------------------ ------------------
GAAP "Adjusted" GAAP "Adjusted"
------------------ ------------------
Income (Numerator):
Net income for basic EPS $1,883 $2,028 $1,438 $1,561
Adjustment for interest
expense on convertible
notes, net of tax (A) 6 6 11 11
------- ---------- ------- ----------
Net Income for diluted
EPS, after assumed
conversion of
convertible notes $1,889 $2,034 $1,449 $1,572
======= ========== ======= ==========
Shares (Denominator):
Weighted-average shares
for basic EPS 1,241 1,241 1,274 1,274
Effect of dilutive
securities 10 10 17 17
Effect of convertible
notes, after assumed
conversion (A) 19 19 35 35
------- ---------- ------- ----------
Adjusted weighted-average
shares for diluted EPS 1,270 1,270 1,326 1,326
======= ========== ======= ==========
Diluted earnings per share $1.49 $1.60 $1.09 $1.19
======= ========== ======= ==========
(A) On May 6, 2005, in connection with an exchange offer, we modified
the terms of approximately 95% of our convertible notes then
outstanding (the "Modified Convertible Notes"). As a result of
certain of these modifications, if converted, the Modified
Convertible Notes would be settled in 1) cash equal to the lesser
of the accreted value of the Modified Convertible Notes at the
conversion date or the conversion value, as defined, and 2) shares
of common stock, if any, to the extent the conversion value
exceeds the accreted value. Accordingly, the Modified Convertible
Notes do not impact diluted earnings per share under the
"if-converted" method but rather, they impact diluted earnings per
share under the treasury stock method, and only to the extent that
the conversion value exceeds the accreted value during any
reporting period, requiring such difference, if any, to be
potentially settled in shares of common stock.
Amgen Inc.
Product Sales Detail by Product and Geographic Region
(In millions)
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2005 2004 2005 2004
--------------- ---------------
Aranesp(R) - U.S. $536 $380 $983 $710
Aranesp(R) - International 301 237 577 450
EPOGEN(R) - U.S. 647 633 1,230 1,223
Neulasta(R) - U.S. 490 362 906 698
Neulasta(R) - International 97 64 182 123
NEUPOGEN(R) - U.S. 208 195 390 367
NEUPOGEN(R) - International 104 100 216 197
Enbrel(R) - U.S. 614 423 1,184 805
Enbrel(R) - International 25 17 47 32
Other product sales - U.S. 37 14 70 22
Other product sales - International 13 6 22 12
--------------- ---------------
Total product sales $3,072 $2,431 $5,807 $4,639
=============== ===============
U.S. $2,532 $2,007 $4,763 $3,825
International 540 424 1,044 814
--------------- ---------------
$3,072 $2,431 $5,807 $4,639
=============== ===============
Amgen Inc.
Condensed Consolidated Balance Sheets - GAAP
(In millions)
(Unaudited)
June 30, Dec. 31,
2005 2004
------------ ----------
Assets
Current assets:
Cash and marketable securities $4,440 $5,808
Trade receivables, net 1,707 1,461
Inventories 984 888
Other current assets 894 1,013
------------ ----------
Total current assets 8,025 9,170
Property, plant, and equipment, net 4,863 4,712
Intangible assets, net 3,872 4,033
Goodwill 10,519 10,525
Other assets 759 781
------------ ----------
Total assets $28,038 $29,221
============ ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $3,178 $2,984
Convertible notes 1,749(2) 1,173(1)
------------ ----------
Total current liabilities 4,927 4,157
Deferred tax liabilities 1,209 1,294
Convertible notes - 1,739(2)
Other long-term debt 2,198 2,198
Other non-current liabilities 123 128
Stockholders' equity 19,581 19,705
------------ ----------
Total liabilities and stockholders'
equity $28,038 $29,221
============ ==========
Shares outstanding 1,231 1,260
(1) On March 2, 2005, as a result of certain holders of the
Convertible notes exercising their March 1, 2005 put option, the
Company repurchased $1,175 million, or approximately 40%, of the
outstanding Convertible notes at their then-accreted value for
cash. Accordingly the Convertible notes repurchased were
classified as current liabilities at December 31, 2004.
(2) Holders of the remaining outstanding Convertible notes may require
the Company to purchase all or a portion of the notes on specific
dates as early as March 1, 2006 at the original issuance price
plus accrued original issue discount through the purchase date.
Accordingly, as of June 30, 2005, the Convertible notes have been
classified as current liabilities.
Amgen Inc.
Reconciliation of "Adjusted" Earnings Per Share Guidance to GAAP
Earnings Per Share Guidance for the Year Ended December 31, 2005
2005
--------------
"Adjusted" earnings per share guidance $3.10 - $3.20
Known adjustments to arrive at GAAP earnings:
Amortization of acquired intangible assets (1) (0.16)
Tularik merger related incremental compensation (2) (0.01)
Write-off of convertible notes debt issuance costs (3) (0.01)
Legal settlements (4) (0.02)
Termination of manufacturing agreement (5) 0.01
Tax liability related to repatriation of certain
foreign earnings (6) -
--------------
GAAP earnings per share guidance $2.91 - $3.01
--------------
The guidance for both "Adjusted" earnings per share and GAAP
earnings per share does not include the impact of expense related
to stock option compensation.
(1) To exclude the ongoing, non-cash amortization of acquired
intangible assets, primarily Enbrel(R), related to the Immunex
acquisition. The total 2005 annual non-cash charge is currently
estimated to be approximately $347 million, pre-tax.
(2) To exclude the incremental compensation provided to certain
Tularik employees principally related to non-cash compensation
expense associated with stock options assumed in connection with
the acquisition and amounts payable under the Tularik short-term
retention plan.
(3) To exclude the pro rata portion of debt issuance costs that were
immediately charged to interest expense, as a result of certain
holders of the convertible notes exercising their March 1, 2005
put option and the related convertible notes being repaid in cash.
(4) To exclude the impact of legal settlements incurred, net of
amounts previously accrued, primarily related to settling a patent
legal proceeding.
(5) To exclude the net gain realized on the termination of a
manufacturing agreement with Genentech for the production of
ENBREL at Genentech's manufacturing facility in South San
Francisco.
(6) To exclude the tax liability related to the repatriation of
certain foreign earnings under the American Jobs Act of 2004
("Jobs Act"). Uncertainty remains as to how to interpret numerous
provisions of the Jobs Act. As such, we have not yet determined
the amount of foreign earnings, if any, that will be repatriated
and, therefore, the amount of the tax liability is not known.
Based on our preliminary analysis to date, we are limited under
the Jobs Act to repatriate up to approximately $500 million in
foreign earnings.
2004 adjusted earnings per share was $2.40 and a reconciliation to
GAAP earnings per share for this amount was provided in our
January 27, 2005 news release.
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