Amgen's Third Quarter 2013 Revenues Increased 10 Percent To $4.7 Billion And Adjusted Earnings Per Share (EPS) Increased 16 Percent To $1.94

Third Quarter 2013 GAAP EPS Were $1.79
2013 Total Revenues and Adjusted EPS Guidance Increased to $18.3-$18.5 Billion and $7.35-$7.45

PR Newswire

THOUSAND OAKS, Calif., Oct. 22, 2013 /PRNewswire/ -- Amgen (AMGN) today announced results for the third quarter of 2013.  Key financial results for the quarter include:

  • Total revenues increased 10 percent to $4,748 million, with 11 percent product sales growth driven by strong performance across the portfolio, particularly from Neulasta® (pegfilgrastim), Enbrel® (etanercept), Prolia® (denosumab) and XGEVA® (denosumab). Product sales included a $155 million order for NEUPOGEN® (filgrastim) from the U.S. government.
  • Adjusted EPS grew 16 percent to $1.94, with higher revenues and a lower tax rate partially offset by increased Research & Development (R&D) investment. Adjusted net income increased 13 percent to $1,481 million.
  • GAAP EPS were $1.79 compared to $1.41 and GAAP net income was $1,368 million compared to $1,107 million.
  • The Company generated approximately $1.6 billion of free cash flow.

"We delivered excellent operating performance this quarter," said Robert A. Bradway, chairman and chief executive officer of Amgen. "We also delivered excellent strategic progress with the acquisition of Onyx Pharmaceuticals in oncology, the opening of our alliances in Japan and China, and the repurchase of our rights to NEUPOGEN and Neulasta in key emerging growth markets around the world."



Year-over-Year

$Millions, except EPS and percentages


Q3 '13


Q3 '12


YOY Δ








Total Revenues


$ 4,748


$ 4,319


10%

Adjusted Net Income


$ 1,481


$ 1,311


13%

Adjusted EPS


$ 1.94


$ 1.67


16%








GAAP Net Income


$ 1,368


$ 1,107


24%

GAAP EPS


$ 1.79


$ 1.41


27%








References in this release to "adjusted" measures, measures presented "on an adjusted basis" or to free cash flow refer to non-GAAP financial measures.  These adjustments and other items are presented on the attached reconciliations.

The Company also noted significant progress on key strategic priorities:

  • The acquisition of Onyx Pharmaceuticals closed on Oct. 1, 2013. Kyprolis sales grew 6 percent sequentially in the third quarter to $65 million.
  • Amgen advanced its efforts to develop a presence in cardiovascular disease by acquiring U.S. commercial rights to ivabradine, an innovative product already approved in over 100 countries for heart failure and angina.
  • In Japan, the Amgen-Astellas strategic alliance began operations on Oct. 1, 2013, and will develop and launch five Phase 3 molecules, starting with evolocumab (AMG 145).
  • In China, the joint venture with Betta Pharma Co. Ltd. to commercialize Vectibix® (panitumumab) also began operations, and Amgen announced a R&D partnership with ShanghaiTech University.
  • In emerging growth markets, Amgen repurchased rights to Neulasta and NEUPOGEN from Roche. Effective Jan. 1, 2014, Amgen will assume responsibility for these products in markets outside the U.S. and Europe with annual sales of approximately $200 million.

Product Sales Performance

  • Total product sales increased 11 percent driven by strong year-over-year performance from NEUPOGEN, Neulasta, ENBREL, Prolia and XGEVA.
  • Combined Neulasta and NEUPOGEN sales increased 18 percent year-over-year.
    • Global Neulasta sales increased 9 percent driven mainly by price.
    • Global NEUPOGEN sales increased 50 percent including a $155 million order from the U.S. government.
  • Enbrel sales increased 7 percent year-over-year driven mainly by price.
  • Aranesp® (darbepoetin alfa) sales decreased 10 percent year-over-year.
  • EPOGEN® (epoetin alfa) sales were flat year-over-year.
  • Sensipar®/Mimpara® (cinacalcet) sales increased 7 percent year-over-year driven by increases in unit demand.
  • Combined sales of Vectibix and Nplate® (romiplostim) increased 19 percent year-over-year mainly due to unit growth.
  • XGEVA sales increased 30 percent year-over-year and 5 percent on a sequential basis, reflecting increased segment share.
  • Prolia sales increased 62 percent year-over-year due to increased segment share and decreased 5 percent on a sequential basis impacted by seasonality.

Product Sales Detail by Product and Geographic Region










$Millions, except percentages


Q3 '13


Q3 '12


YOY Δ



US

ROW

TOTAL


TOTAL


TOTAL










Neulasta®/ NEUPOGEN®


$1,314

$287

$1,601


$1,355


18%

Neulasta®


905

230

1,135


1,044


9%

NEUPOGEN®


409

57

466


311


50%

Enbrel®


1,073

82

1,155


1,079


7%

Aranesp®


171

278

449


497


(10%)

EPOGEN®


491

0

491


491


0%

Sensipar® / Mimpara®


183

76

259


243


7%

Vectibix®


32

75

107


88


22%

Nplate®


58

48

106


91


16%

XGEVA®/ Prolia®


303

136

439


311


41%

XGEVA®


194

67

261


201


30%

Prolia®


109

69

178


110


62%

Other 


0

40

40


46


(13%)










Total product sales


$3,625

$1,022

$4,647


$4,201


11%










Operating Expense and Tax Rate Analysis, on an Adjusted Basis

  • Cost of Sales margin decreased 0.6 points.
  • R&D expenses increased 14 percent in the third quarter of 2013 primarily in support of our later-stage clinical programs, particularly evolocumab (AMG 145) and the $50 million upfront payment to Servier for the U.S. rights to ivabradine.
  • Selling, General & Administrative (SG&A) expenses increased 10 percent driven primarily by higher ENBREL profit share expenses and the U.S. healthcare reform federal excise fee. ENBREL profit share expenses increased 12 percent to $432 million.  

$Millions, except percentages







On an Adjusted Basis


Q3 '13


Q3 '12


YOY Δ










Cost of Sales

$715


$674


6%


% of sales


15.4%


16.0%


(0.6) pts


% of sales (Excluding PR excise tax)


13.4%


14.0%


(0.6) pts

Research & Development

$966


$849


14%


% of sales


20.8%


20.2%


0.6 pts

Selling, General & Administrative

$1,218


$1,110


10%


% of sales


26.2%


26.4%


(0.2) pts

TOTAL Operating Expenses

$2,899


$2,633


10%

pts: percentage points







  • Adjusted Tax Rate for the third quarter of 2013 reflects the favorable tax impacts of changes in the jurisdictional mix of income and expenses and the current year benefit from the federal R&D credit. 









On an Adjusted Basis


Q3 '13


Q3 '12


YOY Δ










Tax Rate

12.1%


16.0%


(3.9) pts

Tax Rate (Excluding PR excise tax credits)

16.3%


20.2%


(3.9) pts

pts: percentage points







Cash Flow and Balance Sheet Discussion

  • The Company generated $1.6 billion of free cash flow in the third quarter of 2013, in-line with the third quarter of 2012.
  • Debt outstanding and cash as of Sept. 30, 2013, included $3.1 billion from bank loans to fund the acquisition of Onyx Pharmaceuticals, which closed on Oct. 1, 2013. The Company received an additional $5 billion of bank loans on Oct. 1, 2013, to complete the acquisition financing.
  • The Company's fourth quarter dividend of $0.47 per share declared on Oct. 16, 2013, will be paid on Dec. 6, 2013, to all stockholders of record as of the close of business on Nov. 14, 2013.
  • The Company did not repurchase shares in the quarter and has $1.6 billion remaining under its stock repurchase authorization.

$Billions, except shares

Q3 '13


Q3 '12


YOY Δ







Operating Cash Flow

$1.8


$1.7


0.1

Capital Expenditures

(0.2)


(0.2)


0.0

Free Cash Flow

1.6


1.6


0.1

Dividend Paid

0.4


0.3


0.1

Cost of Shares Repurchased

0.0


0.8


(0.8)

Adjusted Avg. Diluted Shares (millions)

765


783


(18)







Cash and Investments*

26.5


25.4


1.1

Debt Outstanding

27.2


26.5


0.7

Stockholders' Equity

21.7


19.9


1.8







Includes cash, cash equivalents and marketable securities, receivable from sale of investments, and long-term restricted investments


Note: Numbers may not add due to rounding



2013 Guidance

For the full year 2013, the Company expects:

  • Total revenues to be in the range of $18.3 billion to $18.5 billion.
  • Adjusted EPS to be in the range of $7.35 to $7.45.
  • Adjusted tax rate to be in the range of 9 percent to 10 percent, unchanged from previous guidance. Excluding the Puerto Rico excise tax, Amgen expects the adjusted tax rate for 2013 to be in the range of 13 percent to 14 percent.
  • Capital expenditures to be approximately $700 million, unchanged from previous guidance.

Third Quarter Pipeline Update

The Company provided the following information on selected clinical programs:

Evolocumab (AMG 145):

  • The Company announced that all of the pivotal lipid lowering studies of evolocumab have completed enrollment and the data are expected in the first quarter of 2014.

Trebananib:

  • The Company announced that the primary analysis of the event-driven overall survival secondary endpoint from the ongoing pivotal Phase 3 study in recurrent ovarian cancer (TRINOVA-1) is projected to occur in the second half of 2014.
  • The Company announced that enrollment has been closed in a Phase 3 study in recurrent ovarian cancer (TRINOVA-2) due to DOXIL® (doxorubicin HCl liposome injection) supply issues.

Brodalumab:

  • The Company announced that all Phase 3 studies in subjects with psoriasis have completed enrollment and data are expected in 2014.

Biosimilars:

  • The Company announced that it has commenced a pivotal study in subjects with psoriasis for its biosimilar Humira® (adalimumab).

Note: DOXIL® is a product of Janssen Products, LP a Johnson & Johnson subsidiary; Humira® is a product of AbbVie Inc. 

Non-GAAP Financial Measures
The Adjusted non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures included above for the third quarters of 2013 and 2012 exclude, for the applicable periods, certain expenses related to acquisitions, cost-savings initiatives, various legal proceedings, non-cash interest expense associated with our convertible notes and certain other adjustments, as applicable. These adjustments and other items are presented on the attached reconciliations.

Management has presented its operating results in accordance with GAAP and on an "adjusted" (or non-GAAP) basis and Free Cash Flow which is a non-GAAP financial measure for the third quarters of 2013 and 2012.  In addition, management has presented its full year 2013 EPS and tax rate guidance in accordance with GAAP and on an "adjusted" (or non-GAAP) basis.  The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors.  The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning.  These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP.

About Amgen
Amgen 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 biologics manufacturing 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 the world's largest independent biotechnology company, 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 involve significant risks and uncertainties, including those discussed below and others that can be found in our Form 10-K for the year ended Dec. 31, 2012, and in any subsequent periodic reports on Form 10-Q and Form 8-K.  Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

No forward-looking statement can be guaranteed and actual results may differ materially from those we project.  The Company's results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign), and difficulties or delays in manufacturing our products.  In addition, sales of our products are affected by reimbursement policies imposed by third-party 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 healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement.  Government and others' regulations and reimbursement policies may affect the development, usage and pricing of our products.  Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities.  We or others could identify safety, side effects or manufacturing problems with our products after they are on the market.  Our business may be impacted by government investigations, litigation and product liability claims.  If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions.  Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors.  We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development.  In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products.  Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product.  Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers.  Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock.

 

Amgen Inc

Condensed Consolidated Statements of Income - GAAP

(In millions, except per share data)

(Unaudited)
















Three months ended


Nine months ended





September 30, 


September 30, 





2013


2012


2013


2012

Revenues:










Product sales


$         4,647


$           4,201


$       13,393


$         12,302


Other revenues


101


118


272


542



Total revenues


4,748


4,319


13,665


12,844












Operating expenses:










Cost of sales


788


775


2,317


2,277


Research and development


989


880


2,834


2,442


Selling, general and administrative


1,249


1,131


3,663


3,441


Other


34


110


171


195



Total operating expenses


3,060


2,896


8,985


8,355












Operating income


1,688


1,423


4,680


4,489












Interest expense, net


257


271


761


762

Interest and other income, net


72


111


332


359












Income before income taxes


1,503


1,263


4,251


4,086












Provision for income taxes


135


156


191


529












Net income


$         1,368


$           1,107


$         4,060


$           3,557












Earnings per share:










Basic


$           1.81


$             1.44


$           5.40


$             4.57


Diluted


$           1.79


$             1.41


$           5.31


$             4.51












Average shares used in calculation of earnings per share:










Basic


754


771


752


779


Diluted


766


783


764


789

 

 

Amgen Inc

Condensed Consolidated Balance Sheets - GAAP 

(In millions)

(Unaudited)








September 30, 


December 31, 



2013


2012

Assets





Current assets:






Cash, cash equivalents and marketable securities


$              22,558


$             24,061


Receivable from sale of investments


560


-


Trade receivables, net


2,670


2,518


Inventories


2,838


2,744


Other current assets


2,049


1,886


        Total current assets



30,675


31,209

Property, plant and equipment, net


5,283


5,326

Intangible assets, net


3,682


3,968

Goodwill


12,572


12,662

Restricted investments


3,411


-

Other assets


1,450


1,133

Total assets


$              57,073


$             54,298






Liabilities and Stockholders' Equity





Current liabilities:






Accounts payable and accrued liabilities


$                4,832


$               5,696


Current portion of long-term debt


11


2,495


        Total current liabilities


4,843


8,191

Long-term debt


27,178


24,034

Other non-current liabilities


3,324


3,013

Stockholders' equity


21,728


19,060

Total liabilities and stockholders' equity


$              57,073


$             54,298






Shares outstanding


754


756

 

Amgen Inc.

GAAP to "Adjusted" Reconciliations

(In millions)

(Unaudited)





















Three months ended


Nine months ended



September 30, 


September 30, 



2013


2012


2013


2012











GAAP cost of sales

$        788


$        775


$     2,317


$     2,277


Adjustments to cost of sales:









    Stock option expense (a)

(3)


(3)


(6)


(9)


    Acquisition-related expenses (b)

(70)


(77)


(211)


(218)


    Certain charges pursuant to our efforts to improve cost efficiencies in our operations related to accelerated depreciation of a manufacturing facility

-


(21)


-


(42)


        Total adjustments to cost of sales

(73)


(101)


(217)


(269)


Adjusted cost of sales

$        715


$        674


$     2,100


$     2,008




















GAAP research and development expenses

$        989


$        880


$     2,834


$     2,442


Adjustments to research and development expenses:









    Stock option expense (a)

(2)


(5)


(10)


(17)


    Acquisition-related expenses (c)

(21)


(14)


(63)


(34)


    Certain charges pursuant to our efforts to improve cost efficiencies in our operations related to a lease abandonment

-


(12)


-


(12)


        Total adjustments to research and development expenses

(23)


(31)


(73)


(63)


Adjusted research and development expenses

$        966


$        849


$     2,761


$     2,379




















GAAP selling, general and administrative expenses

$     1,249


$     1,131


$     3,663


$     3,441


Adjustments to selling, general and administrative expenses:









    Stock option expense (a)

(3)


(6)


(10)


(20)


    Acquisition-related expenses (d)

(28)


(15)


(54)


(55)


        Total adjustments to selling, general and administrative expenses

(31)


(21)


(64)


(75)


Adjusted selling, general and administrative expenses

$     1,218


$     1,110


$     3,599


$     3,366




















GAAP operating expenses

$     3,060


$     2,896


$     8,985


$     8,355


Adjustments to operating expenses:









    Adjustments to cost of sales

(73)


(101)


(217)


(269)


    Adjustments to research and development expenses

(23)


(31)


(73)


(63)


    Adjustments to selling, general and administrative expenses

(31)


(21)


(64)


(75)


    Expense resulting from changes in the estimated fair values of the contingent consideration obligations related to a prior year business combination

-


(2)


(111)


(5)


    Write-off of a non-key contract asset acquired in a prior year business combination

-


(19)


-


(19)


    Certain charges pursuant to our efforts to improve cost efficiencies in our operations (e)

(35)


(36)


(46)


(106)


    Benefit/(Expense) related to various legal proceedings

1


(53)


(14)


(65)


        Total adjustments to operating expenses

(161)


(263)


(525)


(602)


Adjusted operating expenses

$     2,899


$     2,633


$     8,460


$     7,753




















GAAP income before income taxes

$     1,503


$     1,263


$     4,251


$     4,086


Adjustments to income before income taxes:









    Adjustments to operating expenses

161


263


525


602


    Adjustments to other income/(expense)

22


35


34


104


        Total adjustments to income before income taxes

183


298


559


706


Adjusted income before income taxes

$     1,686


$     1,561


$     4,810


$     4,792




















GAAP provision for income taxes

$        135


$        156


$        191


$        529


Adjustments to provision for income taxes:









    Income tax effect of the above adjustments (f)

60


94


148


232


    Other income tax adjustments (g)

10


-


48


-


        Total adjustments to provision for income taxes

70


94


196


232


Adjusted provision for income taxes

$        205


$        250


$        387


$        761




















GAAP net income

$     1,368


$     1,107


$     4,060


$     3,557


Adjustments to net income:









    Adjustments to income before income taxes, net of the tax effect of the above adjustments

123


204


411


474


    Other income tax adjustments (g)

(10)


-


(48)


-


        Total adjustments to net income

113


204


363


474


Adjusted net income

$     1,481


$     1,311


$     4,423


$     4,031










 

Amgen Inc

GAAP to "Adjusted" Reconciliations

(In millions, except per share data)

(Unaudited)






















The following table presents the computations for GAAP and "Adjusted" diluted EPS, computed under the treasury stock method.


"Adjusted" EPS presented below excludes stock option expense:













Three months ended


Three months ended




September 30, 2013


September 30, 2012




GAAP


"Adjusted"  


GAAP


"Adjusted"  



Income (Numerator):










Net income for basic and diluted EPS

$     1,368


$     1,481


$     1,107


$     1,311













Shares (Denominator):










Weighted-average shares for basic EPS

754


754


771


771



Effect of dilutive securities

12


11

(*)

12


12

(*)


Weighted-average shares for diluted EPS

766


765


783


783













Diluted EPS

$       1.79


$       1.94


$       1.41


$       1.67














Nine months ended


Nine months ended




September 30, 2013


September 30, 2012




GAAP


"Adjusted" 


GAAP


"Adjusted" 



Income (Numerator):










Net income for basic and diluted EPS

$     4,060


$     4,423


$     3,557


$     4,031













Shares (Denominator):










Weighted-average shares for basic EPS

752


752


779


779



Effect of dilutive securities

12


12

(*)

10


10

(*)


Weighted-average shares for diluted EPS

764


764


789


789













Diluted EPS

$       5.31


$       5.79


$       4.51


$       5.11












(*)

Dilutive securities used to compute "Adjusted" diluted EPS for the three and nine months ended September 30, 2013 and 2012, were computed under the treasury stock method assuming that we do not expense stock options. 











(a)

For the three and nine months ended September 30, 2013, the total pre-tax expense for employee stock options was $8 million and $26 million, respectively, compared with $14 million and $46 million for the corresponding periods of the prior year.



"Adjusted" diluted EPS including the impact of stock option expense were as follows: 













Three months ended


Nine months ended




September 30, 


September 30, 




2013


2012


2013


2012













"Adjusted" diluted EPS, excluding stock option expense

$       1.94


$       1.67


$       5.79


$       5.11













Impact of stock option expense (net of tax)

(0.01)


(0.01)


(0.02)


(0.04)













"Adjusted" diluted EPS, including stock option expense

$       1.93


$       1.66


$       5.77


$       5.07












(b)

The adjustments related to non-cash amortization of product technology rights acquired in a prior year business combination. The adjustments in 2012 also included $7 million of other costs.


(c)

The adjustments in 2013 related primarily to non-cash amortization of intangible assets acquired in prior year business combinations. The adjustments in 2012 related primarily to non-cash amortization of intangible assets as well as retention and severance expenses.


(d)

The adjustments in 2013 related primarily to non-cash amortization of intangible assets acquired in prior year business combinations as well as $15 million of transaction costs associated with the Onyx business combination which closed in the fourth quarter of 2013. For the three months ended September 30, 2012, the adjustments related primarily to non-cash amortization of intangible assets. For the nine months ended September 30, 2012, the adjustments related primarily to transaction costs as well as non-cash amortization of intangible assets.


(e)

The adjustments in 2013 related primarily to severance expenses. The adjustments in 2012 related primarily to lease abandonment costs.











(f)

The tax effect of the adjustments between our GAAP and "Adjusted" results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets and non-cash interest expense associated with our convertible notes, whereas the tax impact of other adjustments, including stock option expense, depends on whether the amounts are deductible in the tax jurisdictions where the expenses are incurred or the asset is located and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rates for the adjustments to our GAAP income before income taxes, for the three and nine months ended  September 30, 2013, were 32.8% and 26.5%, respectively, compared with 31.5% and 32.9% for the corresponding periods of the prior year.


(g)

The income tax impact from resolving certain non-routine transfer-pricing and acquisition-related issues with tax authorities as well as the impact related to certain prior period items excluded from adjusted earnings.


Note:

The 2012 expenses related to amortization of certain acquired intangible assets within operating expenses have been reclassified to conform to the current year presentation

 

Amgen Inc

Reconciliation of Free Cash Flow

(In millions)

(Unaudited)












Three months ended





September 30, 





2013


2012


Cash Flows from Operations

$                    1,807


$                  1,723


Capital Expenditures

(175)


(173)


Free Cash Flow

$                    1,632


$                  1,550








Reconciliation of GAAP EPS Guidance to "Adjusted" 

EPS Guidance for the Year Ending December 31, 2013

(Unaudited)












































2013




















GAAP diluted EPS guidance


$        6.79

-

$        6.89




















Known adjustments to arrive at "Adjusted" earnings*:













Acquisition-related expenses

(a)

0.53









Charges associated with cost savings initiatives


0.04









Stock option expense


0.02









Expense related to various legal proceedings


0.02









Non-cash interest expense associated with our convertible notes


0.01









Other tax adjustments

(b)

(0.06)




















"Adjusted" diluted EPS guidance


$        7.35

-

$        7.45




















*

The known adjustments are presented net of their related tax impact which amount to approximately $0.25 per share in the aggregate. 














(a)

To exclude acquisition-related expenses related primarily to non-cash amortization of intangible assets and expense resulting from changes in the estimated fair values of the contingent consideration obligations related to prior year business combinations.














(b)

To exclude the income tax impact from resolving certain non-routine transfer-pricing and acquisition-related issues with tax authorities as well as the impact related to certain prior period items excluded from adjusted earnings.















On October 1, 2013, we acquired Onyx Pharmaceuticals. Many of the adjustments from this transaction have not been determined.  As a result, we expect significantly more adjustments in the fourth quarter that are not included in the table above.




 


Reconciliation of GAAP Tax Rate Guidance to "Adjusted" 

Tax Rate Guidance for the Year Ending December 31, 2013

(Unaudited)































2013 with
PR excise tax credit


2013 without
PR excise tax credit














GAAP tax rate guidance


6%

-

7%



11%

-

12%
















Tax rate effect of known adjustments discussed above


3%



2%















"Adjusted" tax rate guidance


9%

-

10%



13%

-

14%


 

CONTACT: Amgen, Thousand Oaks
Christine Regan, 805-447-5476 (media)
Arvind Sood, 805-447-1060 (investors)

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