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JULY27,2016
SAFEHARBORSTATEMENT
This presentation contains forward-looking statements that are based on managements current expectations and beliefs and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially from those described. All statements, other than statements of historical fact, are statements that could be deemed
forward-looking statements, including statements about 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 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 (SEC)
reports filed by Amgen, including Amgens most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and Form 8-K. Please refer to Amgens most
recent Forms 10-K, 10-Q and 8-K for additional information on the uncertainties and risk factors related to our business. Unless otherwise noted, Amgen is providing this information
as of July 27, 2016 and expressly disclaims any duty to update information contained in this presentation.
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 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 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.
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 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. 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 acquire other companies or products and to integrate the operations of
companies we have acquired may not be successful. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all. We are increasingly
dependent on information technology systems, infrastructure and data security. 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.
This presentation includes GAAP and non-GAAP financial measures. In accordance with the requirements of SEC Regulation G, reconciliations between these two measures, if these
slides are in hard copy, accompany the hard copy presentation or, if these slides are delivered electronically, are available on the Company's website at www.amgen.com within the
Investors section.
AGENDA
Introduction
Arvind Sood
Opening Remarks
Bob Bradway
Q2 16 Business Results
David Meline
Tony Hooper
R&D Review
Sean Harper
Q&A
All
FOCUSEDONLONGTERMGROWTHANDVALUECREATION
Our business is performing well with YTD 8% revenue growth and 13%
and KYPROLIS
Advancing our late-stage pipeline, containing both innovative products
and biosimilars
Compelling scientific advances based on genetic insights into disease
Delivering efficiencies and speed through our transformation program
Investing for the long-term; plan to meet or exceed our 2018 commitments
*Non-GAAP financial measureif this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically,
see reconciliations available at: www.amgen.com within the Investors section
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
Q216BUSINESSRESULTS
DAVIDMELINE
EXECUTIVEVICEPRESIDENT
ANDCHIEFFINANCIALOFFICER
11%NONGAAPEPSGROWTHINQ216DRIVENBYHIGHER
REVENUESANDHIGHEROPERATINGMARGINS
$Millions,ExceptNonGAAPEPS
Item
Revenue
Product Sales
Other Revenues
Q2 16
Q2 15
$5,688
$5,370
6%
5,474
214
5,225
145
5%
2,876
2,819
(2%)
738
13.5%
789
15.1%
878
16.0%
918
17.6%
1,260
23.0%
1,112
21.3%
2,812
51.4%
2,551
48.8%
B/(W) %
10%
(176)
(79)
$2,146
$1,977
9%
Non-GAAP EPS
$2.84
$2.57
11%
Average Shares
756
768
18.6%
20.0%
Other Income/(Expense)
2%
1.4 pts
All income statement items for Q2 16 and/or Q2 15, except revenue, other income/(expense) and average shares, are adjusted, non-GAAP financial measuresif this slide is in hard
copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at: www.amgen.com within the Investors section
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
FREECASHFLOWWAS$2.5BINQ216
$Billions
Cash Flow Data
Q2 16
Q2 15
$0.2
$0.1
2.5
3.2
Share Repurchase
0.6
0.5
Dividends Paid
0.8
0.6
Capital Expenditures
Q2 16
Q2 15
$35.0
$30.0
33.2
32.0
Debt Outstanding
*Free Cash Flow is computed by subtracting capital expenditures from operating cash flowif this slide is in hard copy, see reconciliations
accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at: www.amgen.com within the Investors section
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
2016GUIDANCE
Updated
Guidance
Previous
Guidance
Revenue
$22.5B$22.8B
$22.2B$22.6B
Non-GAAP EPS*
$11.10$11.40
$10.85$11.20
19.0%20.0%
19.0%20.0%
Capital Expenditures
~ $700M
~ $700M
*Non-GAAP financial measureif this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically, or
amounts pertain to previously issued financial guidance, see reconciliations available at: www.amgen.com within the Investors section
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
GLOBALCOMMERCIALREVIEW
TONYHOOPER
EXECUTIVEVICEPRESIDENT,
GLOBALCOMMERCIALOPERATIONS
Q2 16 GLOBALCOMMERCIALREVIEW
$Millions,NetSales
Prolia
XGEVA
Enbrel
Sensipar/Mimpara
Vectibix
Nplate
Neulasta
NEUPOGEN
Aranesp
EPOGEN
KYPROLIS
BLINCYTO
Repatha
Other*
Total Product Sales
U.S.
Q2 16
ROW
286
275
1,423
303
52
84
962
141
260
331
142
21
20
17
$4,317
155
106
61
86
108
58
187
55
244
0
30
9
7
51
$1,157
NM = not meaningful
*Other includes MN Pharma, Bergamo, IMLYGIC and Corlanor
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
10
Total
Q2 15
Total
YoY
Total
441
381
1,484
389
160
142
1,149
196
504
331
172
30
27
68
$5,474
340
331
1,348
344
160
125
1,158
256
479
491
119
17
0
57
$5,225
30%
15%
10%
13%
0%
14%
(1%)
(23%)
5%
(33%)
45%
76%
NM
19%
5%
Q216PRODUCTSALESGREW5%YOY
$Millions,NetSales
Highlights
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
YoY
5%
0%
(1%)
5,516
5,329
5,239
1,091
1,107
1,120
4,105
4,425
4,222
4,119
4,317
Q2 15
Q3 15
Q4 15
Q1 16
Q2 16
5,225
1,120
5,474
1,157
*Non-GAAP financial measureif this slide is in hard copy, see reconciliations accompanying the presentation, or if this slide is delivered electronically, see reconciliations available at:
www.amgen.com within the Investors section; Note: Inventory represents wholesaler and, based on prescription data for ENBREL and Sensipar, end-user inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
11
Q216PROLIASALESGREW30%YOY
$Millions,NetSales
Highlights
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
YoY
30%
+24%
0%
QoQ
25%
+19%
+4%
441
380
340
125
320
133
115
215
205
Q2 15
Q3 15
352
155
131
247
221
Q4 15
Q1 16
286
Q2 16
12
Q216XGEVASALESGREW15%YOY
$Millions,NetSales
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
378
331
105
97
234
Q2 15
Highlights
356
102
YoY
15%
+8%
+1%
QoQ
1%
(3%)
+3%
378
381
107
106
273
254
271
275
Q3 15
Q4 15
Q1 16
Q2 16
*Net selling price represents the impact of list price changes as well as contracting and access changes; For the prevention of skeletal-related events in solid tumors
Note: Inventory represents wholesaler inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
13
Q216ENBRELSALESGREW10%YOY
$Millions,NetSales
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
1,348
68
1,280
Q2 15
Highlights
YoY
10%
(2%)
(2%)
1,459
67
1,441
66
1,392
1,375
1,326
Q3 15
Q4 15
Q1 16
1,385
59
QoQ
7%
0%
+7%
1,484
61
1,423
Q2 16
*Net selling price represents the impact of list price changes as well as contracting and access changes
Note: Inventory represents wholesaler and, based on prescription data, end-user inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
14
Q216SENSIPARSALESGREW13%YOY
$Millions,NetSales
Highlights
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
344
353
83
85
261
268
Q2 15
Q3 15
384
85
YoY
13%
+7%
(1%)
367
89
QoQ
6%
+3%
+4%
389
86
299
278
303
Q4 15
Q1 16
Q2 16
*Net selling price represents the impact of list price changes as well as contracting and access changes; Trade name provisionally approved by FDA
Note: Inventory represents wholesaler and, based on prescription data, end-user inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
15
Q216VECTIBIXSALESWEREUNCHANGEDYOY
$Millions,NetSales
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
160
108
52
Q2 15
Highlights
YoY
0%
+3%
(1%)
QoQ
11%
+12%
0%
160
144
132
135
78
84
88
108
54
51
56
52
Q3 15
Q4 15
Q1 16
Q2 16
16
Q216NPLATESALESGREW14%YOY
$Millions,NetSales
Highlights
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
YoY
14%
+15%
0%
QoQ
1%
+4%
(1%)
137
137
141
142
53
55
55
58
84
82
86
84
Q3 15
Q4 15
Q1 16
Q2 16
125
52
73
Q2 15
17
Q216NEULASTASALESDECLINED1%YOY
$Millions,NetSales
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
1,158
205
953
Q2 15
Highlights
1,267
211
1,056
Q3 15
YoY
(1%)
(4%)
(1%)
QoQ
(3%)
(5%)
+2%
1,156
1,183
1,149
196
187
187
960
996
962
Q4 15
Q1 16
Q2 16
*Net selling price represents the impact of list price changes as well as contracting and access changes
Note: Inventory represents wholesaler inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
18
Q216NEUPOGENSALESDECLINED23%YOY
$Millions,NetSales
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
284
256
Highlights
66
65
YoY
(23%)
(19%)
(1%)
263
60
213
63
191
Q2 15
218
Q3 15
QoQ
(8%)
(5%)
+2%
203
Q4 15
196
55
150
141
Q1 16
Q2 16
19
Q216ARANESPSALESGREW5%YOY
$Millions,NetSales
Highlights
Q2 '16
Total Growth
Units
Inventory
ROW
U.S.
479
493
499
256
254
250
223
239
Q2 15
Q3 15
YoY
5%
+13%
(3%)
532
QoQ
(5%)
+1%
+2%
504
271
244
249
261
260
Q4 15
Q1 16
Q2 16
*Net selling price represents the impact of list price changes as well as contracting and access changes
Note: Inventory represents wholesaler inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
20
Q216EPOGENSALESDECLINED33%YOY
$Millions,NetSales
Q2 16
Total Growth
Units
Inventory
U.S.
491
YoY
(33%)
(36%)
+2%
QoQ
10%
+1%
+10%
Q3 15
Q4 15
300
Q1 16
331
Q2 16
489
342
Q2 15
Highlights
21
Q216KYPROLISSALESGREW45%YOY
$Millions,NetSales
Highlights
Q2 16
Total Growth
Units
Inventory
ROW
U.S.
YoY
45%
+44%
(2%)
QoQ
12%
+5%
+2%
172
119
7
112
Q2 15
137
13
124
Q3 15
148
14
154
30
25
134
129
Q4 15
Q1 16
142
Q2 16
MM = multiple myeloma
*Net selling price represents the impact of list price changes as well as contracting and access changes; Note: Inventory represents wholesaler inventories
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
22
R&DREVIEW
SEANE.HARPER,M.D.
EXECUTIVEVICEPRESIDENT,
RESEARCHANDDEVELOPMENT
Q216R&DUPDATE
Cardiovascular
Repatha
Pushtronex system (on-body infusor with prefilled cartridge) for
monthly single-dose administration approved in U.S.
Data from Phase 3 cardiovascular outcomes study (FOURIER)
expected Q1 17*
*Event driven
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
24
Q216R&DUPDATE
Oncology
KYPROLIS
Use in combination with dexamethasone alone for adult patients with relapsed MM
approved in Europe, based on ENDEAVOR
Data from Phase 3 CLARION study vs. bortezomib in newly diagnosed, transplant-ineligible
MM patients expected H2 16*
BLINCYTO
sBLA for pediatric and adolescent Ph R/R B-cell precursor ALL under FDA priority review
with September 1 PDUFA action date
ABP 980
Primary analysis completed for Phase 3 study evaluating efficacy and safety of ABP 980
compared with trastuzumab in patients with HER2-positive early breast cancer
sBLA = supplemental biologics license application; Ph = Philadelphia chromosome-negative; R/R = relapsed or refractory; ALL = acute lymphoblastic leukemia
PDUFA = Prescription Drug User Fee Act; HER2 = human epidermal growth factor receptor 2; *Event-driven study
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
25
Q216R&DUPDATE
BoneHealth
Romosozumab*
BLA submitted to FDA for the treatment of osteoporosis in postmenopausal women
at increased risk for fracture
Results of Phase 3 placebo-controlled registrational fracture study (FRAME) will be
presented at the American Society for Bone and Mineral Research Annual Meeting
in September
Neuroscience
Erenumab (AMG 334)
Results of Phase 2b chronic migraine study will be presented at the European Headache
and Migraine Trust International Congress in September
BLA = biologics license application
*Developed in collaboration with UCB globally, as well as Astellas in Japan; Developed in collaboration with Novartis
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
26
KEYPIPELINEMILESTONES
Clinical Program
Indication
Repatha
Hyperlipidemia
KYPROLIS
BLINCYTO
Parsabiv (etelcalcetide)*
Projected Milestone
Phase 3 coronary imaging data H2 16
Phase 3 CV outcomes data Q1 17**
ENDEAVOR Europe approval
Phase 3 CLARION data H2 16**
FDA priority review
Global regulatory reviews
U.S. regulatory review
Global regulatory submissions
Romosozumab
Postmenopausal osteoporosis
Migraine prophylaxis
XGEVA
ABP 215
Oncology
ABP 501
Inflammatory diseases
ABP 980
Breast cancer
Phase 3 data
Global regulatory submissions
CV = cardiovascular; SRE = skeletal-related event; *Trade name provisionally approved by FDA; Developed in collaboration with UCB globally, as well as Astellas in Japan
Developed in collaboration with Novartis;;**Event-driven study
Provided July 27, 2016, as part of an oral presentation and is qualified by
such, contains forward-looking statements, actual results may vary
materially; Amgen disclaims any duty to update.
27
Q216EARNINGSCALL
JULY27,2016
RECONCILIATIONS
Amgen Inc.
Consolidated Statements of Income - GAAP
(In millions, except per share data)
(Unaudited)
Three months ended
June 30,
2016
2015
Revenues:
Product sales..........................................................................
Other revenues.......................................................................
Total revenues................................................................
5,474
214
5,688
5,225
145
5,370
10,713
502
11,215
10,099
304
10,403
Operating expenses:
Cost of sales
Research and development....................................................
Selling, general and administrative.........................................
Other.........................................................................
Total operating expenses...............................................
1,050
900
1,292
66
3,308
1,089
964
1,160
81
3,294
2,068
1,772
2,495
98
6,433
2,122
1,858
2,186
139
6,305
Operating income..........................................................................
2,380
2,076
4,782
4,098
313
137
277
198
607
287
529
304
2,204
1,997
4,462
3,873
334
344
692
597
Net income....................................................................................
1,870
1,653
3,770
3,276
$
$
2.49
2.47
$
$
2.18
2.15
$
$
5.01
4.97
$
$
4.30
4.26
30
751
756
759
768
753
759
761
769
Amgen Inc.
Consolidated Balance Sheets - GAAP
(In millions)
(Unaudited)
June 30,
2016
Assets
Current assets:
Cash, cash equivalents and marketable securities.........................................................
Trade receivables, net......................................................................................................
Inventories........................................................................................................................
Other current assets........................................................................................................
Total current assets............................................................................................
Property, plant and equipment, net.......................................................................................
Intangible assets, net............................................................................................................
Goodwill.................................................................................................................................
Other assets.........................................................................................................................
Total assets..........................................................................................................................
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities.........................................................................
Current portion of long-term debt.....................................................................................
Total current liabilities..........................................................................................
Long-term debt......................................................................................................................
Long-term deferred tax liability..............................................................................................
Other noncurrent liabilities....................................................................................................
Stockholders' equity..............................................................................................................
Total liabilities and stockholders' equity................................................................................
Shares outstanding...............................................................................................................
31
December 31,
2015
35,034
3,078
2,671
2,164
42,947
4,884
11,068
14,799
1,773
75,471
5,536
5,294
10,830
27,928
2,598
3,982
30,133
75,471
749
31,382
2,995
2,435
1,703
38,515
4,907
11,641
14,787
1,599
71,449
6,417
2,247
8,664
29,182
2,239
3,281
28,083
71,449
754
Amgen Inc.
GAAP to Non-GAAP Reconciliations
(In millions)
(Unaudited)
Three months ended
June 30,
2016
2015
$
1,050
(312)
(312)
738
19.2%
-5.7
0.0
13.5%
900
(19)
(3)
(22)
878
1,292
(27)
(5)
(32)
1,260
964
(28)
(18)
(46)
918
3,308
(312)
(22)
(32)
(8)
(78)
20
(432)
2,876
$
$
2,380
432
2,812
1,160
(28)
(20)
(48)
1,112
(623)
(623)
1,445
3,294
(300)
(46)
(48)
(10)
(71)
(475)
2,819
$
$
2,076
475
2,551
2,122
(569)
(29)
(598)
1,524
19.3%
-5.8
0.0
13.5%
21.0%
-5.6
-0.3
15.1%
1,772
1,858
(38)
2
(36)
1,736
(49)
(35)
(84)
1,774
16.5%
-0.3
0.0
16.2%
18.4%
-0.5
-0.3
17.6%
2,495
2,186
(128)
(4)
(132)
2,363
(57)
(24)
(81)
2,105
22.2%
-0.5
-0.4
21.3%
43.5%
5.7
0.4
0.6
0.2
1.4
-0.4
51.4%
2,068
18.4%
-0.5
-0.3
17.6%
23.6%
-0.5
-0.1
23.0%
(285)
(15)
(300)
789
2016
$
20.8%
-5.4
-0.3
15.1%
16.4%
-0.3
-0.1
16.0%
1,089
23.3%
-1.2
0.0
22.1%
$
6,433
(623)
(36)
(132)
(10)
(105)
17
(889)
5,544
$
$
39.7%
5.7
0.9
0.9
0.2
1.4
0.0
48.8%
4,782
889
5,671
21.6%
-0.6
-0.2
20.8%
$
6,305
(598)
(84)
(81)
(67)
(71)
(1)
(902)
5,403
$
$
44.6%
5.8
0.4
1.2
0.1
1.0
-0.2
52.9%
4,098
902
5,000
40.6%
5.9
0.8
0.8
0.7
0.7
0.0
49.5%
2,204
432
2,636
4,462
889
5,351
1,997
475
2,472
3,873
902
4,775
334
344
692
597
146
10
156
490
151
151
495
285
25
310
1,002
290
290
887
32
15.2%
17.2%
15.5%
15.4%
3.0
0.4
3.4
18.6%
2.8
0.0
2.8
20.0%
2.7
0.5
3.2
18.7%
3.2
0.0
3.2
18.6%
1,870
286
(10)
276
2,146
1,653
324
324
1,977
3,770
3,276
604
(25)
579
4,349
612
612
3,888
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 EPS.
Three months ended
June 30, 2016
GAAP
Net income..
Weighted-average shares for diluted EPS...
Diluted EPS..
$
$
1,870
756
2.47
Non-GAAP
$
$
2,146
756
2.84
GAAP
$
$
$
$
3,770
759
4.97
$
$
4,349
759
5.73
1,653
768
2.15
Non-GAAP
$
$
1,977
768
2.57
3,276
769
4.26
$
$
3,888
769
5.06
(a) The adjustments related primarily to non-cash amortization of intangible assets acquired in business combinations.
(b) For the three months ended June 20, 2016 as well as the three and six months ended June 30, 2015, the adjustments related primarily to non-cash amortization of intangible
assets acquired in business combinations. For the six months ended June 30, 2016, the adjustments related primarily to a $73-million charge resulting from the reacquisition of
Prolia, XGEVA and Vectibix license agreements in certain markets from Glaxo Group Limited, as well as non-cash amortization of intangible assets acquired in business
combinations.
(c) The adjustments related primarily to severance expenses.
(d) 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 expense, 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 and six
months ended June 30, 2016, were 33.8% and 32.1%, respectively, compared with 31.8% and 32.2% for the corresponding periods of the prior year.
(e) The adjustments related to certain prior period items excluded from non-GAAP earnings, primarily the impact from the adoption of ASU 2016-09 related to stock options that
were previously excluded from non-GAAP measures.
33
Amgen Inc.
Reconciliations of Cash Flows
(In millions)
(Unaudited)
Three months ended
June 30,
2015
2,677
$
3,284 (a)
(657)
(2,359)
(2,286)
6
(266)
931
2,896
2,864
2,630
$
3,795
2016
Net cash provided by operating activities........................ $
Net cash used in investing activities .............................
Net cash (used in) provided by financing activities...........
(Decrease) increase in cash and cash equivalents..........
Cash and cash equivalents at beginning of period...........
Cash and cash equivalents at end of period.................... $
2016
Net cash provided by operating activities........................ $
Capital expenditures....................................................
Free cash flow............................................................. $
2016
2016
$
$
(a) Restated to include $470 million and $623 million for the three and six months ended June 30, 2015, respectively, which was previously included
in Net cash (used in) provided by financing activities, as a result of the adoption of ASU 2016-09.
9.55
0.09
11.10
9.90
1.35
0.09
(0.03)
0.14
11.40
The known adjustments are presented net of their related tax impact which amount to approximately $0.71 to $0.73
per share, in the aggregate.
(a)
The adjustments relate primarily to non-cash amortization of intangible assets acquired in prior year business
combinations.
(b)
The adjustments relate to certain prior period items excluded from non-GAAP earnings.
16.5%
34
17.5%
2.5%
19.0%
20.0%
Amgen Inc.
International Sales Performance Adjusted for Foreign Exchange
Amgen has presented international sales performance excluding the impact of foreign exchange. This measure
adjusts for the translation effect of changes in average foreign exchange rates between the current period and the
corresponding period in the prior year. Amgens calculation to adjust for the impact of foreign exchange results in prior
period weighted-average, foreign exchange rates being applied to current period product sales. Amgen believes that
excluding the impact of foreign exchange enhances an investors overall understanding of the financial performance
and prospects for the future of Amgens core business activities by facilitating comparisons of results of core
business operations among current, past and future periods.
35
Q216EARNINGSCALL
JULY 27,2016