Full Press Release Details
THOUSAND OAKS, Calif. , July 27, 2016 /PRNewswire/ -- Amgen (NASDAQ: AMGN ) today announced financial results for the second quarter of 2016. Key results include:
"We delivered another strong quarter and are on track to meet or exceed our long-term objectives," said Robert A. Bradway , chairman and chief executive officer. "We are in the early stages of a new product launch cycle and have several additional pipeline opportunities rapidly nearing regulatory milestones."
| $Millions, except EPS and percentages | Q2'16 | Q2'15 | YOY Δ | |||
| Total Revenues | $ 5,688 | $ 5,370 | 6% | |||
| GAAP Operating Income | $ 2,380 | $ 2,076 | 15% | |||
| GAAP Net Income | $ 1,870 | $ 1,653 | 13% | |||
| GAAP EPS | $ 2.47 | $ 2.15 | 15% | |||
| Non-GAAP Operating Income | $ 2,812 | $ 2,551 | 10% | |||
| Non-GAAP Net Income | $ 2,146 | $ 1,977 | 9% | |||
| Non-GAAP EPS | $ 2.84 | $ 2.57 | 11% |
Product Sales Performance
| Product Sales Detail by Product and Geographic Region | ||||||||
| $Millions, except percentages | Q2'16 | Q2'15 | YOY Δ | |||||
| US | ROW | TOTAL | TOTAL | TOTAL | ||||
| Enbrel ® | $1,423 | $61 | $1,484 | $1,348 | 10% | |||
| Neulasta ® | 962 | 187 | 1,149 | 1,158 | (1%) | |||
| Aranesp ® | 260 | 244 | 504 | 479 | 5% | |||
| Prolia ® | 286 | 155 | 441 | 340 | 30% | |||
| Sensipar ® / Mimpara ® | 303 | 86 | 389 | 344 | 13% | |||
| XGEVA ® | 275 | 106 | 381 | 331 | 15% | |||
| EPOGEN ® | 331 | 0 | 331 | 491 | (33%) | |||
| NEUPOGEN ® | 141 | 55 | 196 | 256 | (23%) | |||
| KYPROLIS ® | 142 | 30 | 172 | 119 | 45% | |||
| Vectibix ® | 52 | 108 | 160 | 160 | 0% | |||
| Nplate ® | 84 | 58 | 142 | 125 | 14% | |||
| BLINCYTO ® | 21 | 9 | 30 | 17 | 76% | |||
| Repatha ® | 20 | 7 | 27 | 0 | * | |||
| Other** | 17 | 51 | 68 | 57 | 19% | |||
| Total product sales | $4,317 | $1,157 | $5,474 | $5,225 | 5% | |||
| * Not meaningful | ||||||||
| ** Other includes MN Pharma, Bergamo, IMLYGIC ® and Corlanor ® |
Operating Expense, Operating Margin and Tax Rate Analysis
On a GAAP basis:
On a non-GAAP basis:
| $Millions, except percentages | |||||||||||||
| GAAP | Non-GAAP | ||||||||||||
| Q2'16 | Q2'15 | YOY Δ | Q2'16 | Q2'15 | YOY Δ | ||||||||
| Cost of Sales | $1,050 | $1,089 | (4%) | $738 | $789 | (6%) | |||||||
| % of product sales | 19.2% | 20.8% | (1.6) pts | 13.5% | 15.1% | (1.6) pts | |||||||
| Research & Development | $900 | $964 | (7%) | $878 | $918 | (4%) | |||||||
| % of product sales | 16.4% | 18.4% | (2.0) pts | 16.0% | 17.6% | (1.6) pts | |||||||
| Selling, General & Administrative | $1,292 | $1,160 | 11% | $1,260 | $1,112 | 13% | |||||||
| % of product sales | 23.6% | 22.2% | 1.4 pts | 23.0% | 21.3% | 1.7 pts | |||||||
| Other | $66 | $81 | (19%) | $0 | $0 | 0% | |||||||
| TOTAL Operating Expenses | $3,308 | $3,294 | 0% | $2,876 | $2,819 | 2% | |||||||
| Operating Margin | |||||||||||||
| operating income as a % of product sales | 43.5% | 39.7% | 3.8 pts | 51.4% | 48.8% | 2.6 pts | |||||||
| Tax Rate | 15.2% | 17.2% | (2.0) pts | 18.6% | 20.0% | (1.4) pts | |||||||
| pts: percentage points |
Cash Flow and Balance Sheet
| $Billions, except shares | Q2'16 | Q2'15 | YOY Δ | |||
| Operating Cash Flow | $2.7 | $3.3 | ($0.6) | |||
| Capital Expenditures | 0.2 | 0.1 | 0.1 | |||
| Free Cash Flow | 2.5 | 3.2 | (0.7) | |||
| Dividends Paid | 0.8 | 0.6 | 0.2 | |||
| Share Repurchase | 0.6 | 0.5 | 0.1 | |||
| Avg. Diluted Shares (millions) | 756 | 768 | (12) | |||
| Cash and Investments | 35.0 | 30.0 | 5.0 | |||
| Debt Outstanding | 33.2 | 32.0 | 1.2 | |||
| Stockholders' Equity | 30.1 | 27.5 | 2.6 | |||
| Note: Numbers may not add due to rounding |
For the full year 2016, the Company now expects:
| Second Quarter Product and Pipeline Update | ||
| Key development milestones: | ||
| Clinical Program | Indication | Milestone |
| Repatha ® (evolocumab) | Hyperlipidemia | Phase 3 coronary imaging data expected H2 2016 Phase 3 CV outcomes data expected Q1 2017* |
| KYPROLIS | Newly diagnosed multiple myeloma | Phase 3 data expected H2 2016* |
| BLINCYTO ® | Pediatric Ph- R/R B-cell precursor ALL | FDA priority review |
| Parsabiv ™ (etelcalcetide) † | Secondary hyperparathyroidism | Global regulatory reviews |
| XGEVA | Prevention of SREs in multiple myeloma | Phase 3 data expected H2 2016* |
| Romosozumab | Postmenopausal osteoporosis | US regulatory review Global regulatory submissions |
| Erenumab (AMG 334) | Migraine Prophylaxis | Phase 3 episodic migraine data expected H2 2016 |
| ABP 215 (biosimilar bevacizumab) | Oncology | Global regulatory submissions |
| ABP 501 (biosimilar adalimumab) | Inflammatory diseases | Global regulatory reviews |
| ABP 980 (biosimilar trastuzumab) | Breast Cancer | Global regulatory submissions |
The Company provided the following updates on selected product and pipeline programs:
Erenumab is developed in collaboration with Novartis Romosozumab is developed in collaboration with UCB globally, as well as Astellas in Japan
Non-GAAP Financial Measures
In this news release, management has presented its operating results for the second quarters of 2016 and 2015 in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2016 EPS and tax rate guidance in accordance with GAAP and on a non-GAAP basis. These non-GAAP financial measures are computed by excluding certain items related to acquisitions, restructuring and certain other items from the related GAAP financial measures. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release. Management has also presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the second quarters of 2016 and 2015. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP.
The Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses certain non-GAAP financial measures to enhance an investor's overall understanding of the financial performance and prospects for the future of the Company's ongoing business activities by facilitating comparisons of results of ongoing business operations among current, past and future periods. The Company believes that FCF provides a further measure of the Company's liquidity.
The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.
Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.
Forward-Looking Statements
This news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including 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 reports filed by Amgen, including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and Form 8-K. Unless otherwise noted, Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products 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.
CONTACT: Amgen, Thousand Oaks Trish Hawkins , 805-447-5631 (media) Arvind Sood , 805-447-1060 (investors)
| Amgen Inc. | ||||||||||
| Consolidated Statements of Income - GAAP | ||||||||||
| (In millions, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Three months ended | Six months ended | |||||||||
| June 30, | June 30, | |||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||
| Revenues: | ||||||||||
| Product sales | $ 5,474 | $ 5,225 | $ 10,713 | $ 10,099 | ||||||
| Other revenues | 214 | 145 | 502 | 304 | ||||||
| Total revenues | 5,688 | 5,370 | 11,215 | 10,403 | ||||||
| Operating expenses: | ||||||||||
| Cost of sales | 1,050 | 1,089 | 2,068 | 2,122 | ||||||
| Research and development | 900 | 964 | 1,772 | 1,858 | ||||||
| Selling, general and administrative | 1,292 | 1,160 | 2,495 | 2,186 | ||||||
| Other | 66 | 81 | 98 | 139 | ||||||
| Total operating expenses | 3,308 | 3,294 | 6,433 | 6,305 | ||||||
| Operating income | 2,380 | 2,076 | 4,782 | 4,098 | ||||||
| Interest expense, net | 313 | 277 | 607 | 529 | ||||||
| Interest and other income, net | 137 | 198 | 287 | 304 | ||||||
| Income before income taxes | 2,204 | 1,997 | 4,462 | 3,873 | ||||||
| Provision for income taxes | 334 | 344 | 692 | 597 | ||||||
| Net income | $ 1,870 | $ 1,653 | $ 3,770 | $ 3,276 | ||||||
| Earnings per share: | ||||||||||
| Basic | $ 2.49 | $ 2.18 | $ 5.01 | $ 4.30 | ||||||
| Diluted | $ 2.47 | $ 2.15 | $ 4.97 | $ 4.26 | ||||||
| Weighted average shares used in calculation of earnings per share: | ||||||||||
| Basic | 751 | 760 | 753 | 761 | ||||||
| Diluted | 756 | 768 | 759 | 769 |
| Amgen Inc. | ||||||
| Consolidated Balance Sheets - GAAP | ||||||
| (In millions) | ||||||
| (Unaudited) | ||||||
| June 30, | December 31, | |||||
| 2016 | 2015 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash, cash equivalents and marketable securities | $ 35,034 | $ 31,382 | ||||
| Trade receivables, net | 3,078 | 2,995 | ||||
| Inventories | 2,671 | 2,435 | ||||
| Other current assets | 2,164 | 1,703 | ||||
| Total current assets | 42,947 | 38,515 | ||||
| Property, plant and equipment, net | 4,884 | 4,907 | ||||
| Intangible assets, net | 11,068 | 11,641 | ||||
| Goodwill | 14,799 | 14,787 | ||||
| Other assets | 1,773 | 1,599 | ||||
| Total assets | $ 75,471 | $ 71,449 | ||||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ 5,536 | $ 6,417 | ||||
| Current portion of long-term debt | 5,294 | 2,247 | ||||
| Total current liabilities | 10,830 | 8,664 | ||||
| Long-term debt | 27,928 | 29,182 | ||||
| Long-term deferred tax liability | 2,598 | 2,239 | ||||
| Other noncurrent liabilities | 3,982 | 3,281 | ||||
| Stockholders' equity | 30,133 | 28,083 | ||||
| Total liabilities and stockholders' equity | $ 75,471 | $ 71,449 | ||||
| Shares outstanding | 749 | 754 |
| Amgen Inc. | |||||||
| GAAP to Non-GAAP Reconciliations | |||||||
| (In millions) | |||||||
| (Unaudited) | |||||||
| Three months ended | Six months ended | ||||||
| June 30, | June 30, | ||||||
| 2016 | 2015 | 2016 | 2015 | ||||
| GAAP cost of sales | $ 1,050 | $ 1,089 | $ 2,068 | $ 2,122 | |||
| Adjustments to cost of sales: | |||||||
| Acquisition-related expenses (a) | (312) | (285) | (623) | (569) | |||
| Certain net charges pursuant to our restructuring initiative | - | (15) | - | (29) | |||
| Total adjustments to cost of sales | (312) | (300) | (623) | (598) | |||
| Non-GAAP cost of sales | $ 738 | $ 789 | $ 1,445 | $ 1,524 | |||
| GAAP cost of sales as a percentage of product sales | 19.2% | 20.8% | 19.3% | 21.0% | |||
| Acquisition-related expenses | -5.7 | -5.4 | -5.8 | -5.6 | |||
| Certain net charges pursuant to our restructuring initiative | 0.0 | -0.3 | 0.0 | -0.3 | |||
| Non-GAAP cost of sales as a percentage of product sales | 13.5% | 15.1% | 13.5% | 15.1% | |||
| GAAP research and development expenses | $ 900 | $ 964 | $ 1,772 | $ 1,858 | |||
| Adjustments to research and development expenses: | |||||||
| Acquisition-related expenses (a) | (19) | (28) | (38) | (49) | |||
| Certain net charges pursuant to our restructuring initiative | (3) | (18) | 2 | (35) | |||
| Total adjustments to research and development expenses | (22) | (46) | (36) | (84) | |||
| Non-GAAP research and development expenses | $ 878 | $ 918 | $ 1,736 | $ 1,774 | |||
| GAAP research and development expenses as a percentage of product sales | 16.4% | 18.4% | 16.5% | 18.4% | |||
| Acquisition-related expenses (a) | -0.3 | -0.5 | -0.3 | -0.5 | |||
| Certain net charges pursuant to our restructuring initiative | -0.1 | -0.3 | 0.0 | -0.3 | |||
| Non-GAAP research and development expenses as a percentage of product sales | 16.0% | 17.6% | 16.2% | 17.6% | |||
| GAAP selling, general and administrative expenses | $ 1,292 | $ 1,160 | $ 2,495 | $ 2,186 | |||
| Adjustments to selling, general and administrative expenses: | |||||||
| Acquisition-related expenses (b) | (27) | (28) | (128) | (57) | |||
| Certain net charges pursuant to our restructuring initiative | (5) | (20) | (4) | (24) | |||
| Total adjustments to selling, general and administrative expenses | (32) | (48) | (132) | (81) | |||
| Non-GAAP selling, general and administrative expenses | $ 1,260 | $ 1,112 | $ 2,363 | $ 2,105 | |||
| GAAP selling, general and administrative expenses as a percentage of product sales | 23.6% | 22.2% | 23.3% | 21.6% | |||
| Acquisition-related expenses (a) | -0.5 | -0.5 | -1.2 | -0.6 | |||
| Certain net charges pursuant to our restructuring initiative | -0.1 | -0.4 | 0.0 | -0.2 | |||
| Non-GAAP selling, general and administrative expenses as a percentage of product sales | 23.0% | 21.3% | 22.1% | 20.8% | |||
| GAAP operating expenses | $ 3,308 | $ 3,294 | $ 6,433 | $ 6,305 | |||
| Adjustments to operating expenses: | |||||||
| Adjustments to cost of sales | (312) | (300) | (623) | (598) | |||
| Adjustments to research and development expenses | (22) | (46) | (36) | (84) | |||
| Adjustments to selling, general and administrative expenses | (32) | (48) | (132) | (81) | |||
| Certain net charges pursuant to our restructuring initiative (c) | (8) | (10) | (10) | (67) | |||
| Expense related to various legal proceedings | (78) | (71) | (105) | (71) | |||
| Acquisition-related adjustments | 20 | - | 17 | (1) | |||
| Total adjustments to operating expenses | (432) | (475) | (889) | (902) | |||
| Non-GAAP operating expenses | $ 2,876 | $ 2,819 | $ 5,544 | $ 5,403 | |||
| GAAP operating income | $ 2,380 | $ 2,076 | $ 4,782 | $ 4,098 | |||
| Adjustments to operating expenses | 432 | 475 | 889 | 902 | |||
| Non-GAAP operating income | $ 2,812 | $ 2,551 | $ 5,671 | $ 5,000 | |||
| GAAP operating income as a percentage of product sales | 43.5% | 39.7% | 44.6% | 40.6% | |||
| Adjustments to cost of sales | 5.7 | 5.7 | 5.8 | 5.9 | |||
| Adjustments to research and development expenses | 0.4 | 0.9 | 0.4 | 0.8 | |||
| Adjustments to selling, general and administrative expenses | 0.6 | 0.9 | 1.2 | 0.8 | |||
| Certain net charges pursuant to our restructuring initiative (c) | 0.2 | 0.2 | 0.1 | 0.7 | |||
| Expense related to various legal proceedings | 1.4 | 1.4 | 1.0 | 0.7 | |||
| Acquisition-related adjustments | -0.4 | 0.0 | -0.2 | 0.0 | |||
| Non-GAAP operating income as a percentage of product sales | 51.4% | 48.8% | 52.9% | 49.5% | |||
| GAAP income before income taxes | $ 2,204 | $ 1,997 | $ 4,462 | $ 3,873 | |||
| Adjustments to operating expenses | 432 | 475 | 889 | 902 | |||
| Non-GAAP income before income taxes | $ 2,636 | $ 2,472 | $ 5,351 | $ 4,775 | |||
| GAAP provision for income taxes | $ 334 | $ 344 | $ 692 | $ 597 | |||
| Adjustments to provision for income taxes: | |||||||
| Income tax effect of the above adjustments to operating expenses (d) | 146 | 151 | 285 | 290 | |||
| Other income tax adjustments (e) | 10 | - | 25 | - | |||
| Total adjustments to provision for income taxes | 156 | 151 | 310 | 290 | |||
| Non-GAAP provision for income taxes | $ 490 | $ 495 | $ 1,002 | $ 887 | |||
| GAAP tax rate as a percentage of income before taxes | 15.2% | 17.2% | 15.5% | 15.4% | |||
| Adjustments to provision for income taxes: | |||||||
| Income tax effect of the above adjustments to operating expenses (d) | 3.0 | 2.8 | 2.7 | 3.2 | |||
| Other income tax adjustments (e) | 0.4 | 0.0 | 0.5 | 0.0 | |||
| Total adjustments to provision for income taxes | 3.4 | 2.8 | 3.2 | 3.2 | |||
| Non-GAAP tax rate as a percentage of income before taxes | 18.6% | 20.0% | 18.7% | 18.6% | |||
| GAAP net income | $ 1,870 | $ 1,653 | $ 3,770 | $ 3,276 | |||
| Adjustments to net income: | |||||||
| Adjustments to income before income taxes, net of the income tax effect | 286 | 324 | 604 | 612 | |||
| Other income tax adjustments (e) | (10) | - | (25) | - | |||
| Total adjustments to net income | 276 | 324 | 579 | 612 | |||
| Non-GAAP net income | $ 2,146 | $ 1,977 | $ 4,349 | $ 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 | Three months ended | ||||||
| June 30, 2016 | June 30, 2015 | ||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | ||||
| Net income | $ 1,870 | $ 2,146 | $ 1,653 | $ 1,977 | |||
| Weighted-average shares for diluted EPS | 756 | 756 | 768 | 768 | |||
| Diluted EPS | $ 2.47 | $ 2.84 | $ 2.15 | $ 2.57 | |||
| Six months ended | Six months ended | ||||||
| June 30, 2016 | June 30, 2015 | ||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | ||||
| Net income | $ 3,770 | $ 4,349 | $ 3,276 | $ 3,888 | |||
| Weighted-average shares for diluted EPS | 759 | 759 | 769 | 769 | |||
| Diluted EPS | $ 4.97 | $ 5.73 | $ 4.26 | $ 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 related to the stock options from the adoption of ASU 2016-09. |
| Amgen Inc. | ||||||||
| Reconciliations of Cash Flows | ||||||||
| (In millions) | ||||||||
| (Unaudited) | ||||||||
| Three months ended | Six months ended | |||||||
| June 30, | June 30, | |||||||
| 2016 | 2015 | 2016 | 2015 | |||||
| Net cash provided by operating activities | $ 2,677 | $ 3,284 | (a) | $ 4,592 | $ 4,766 | (a) | ||
| Net cash used in investing activities | (657) | (2,359) | (5,047) | (3,311) | ||||
| Net cash (used in) provided by financing activities | (2,286) | 6 | (1,059) | (1,391) | ||||
| (Decrease) increase in cash and cash equivalents | (266) | 931 | (1,514) | 64 | ||||
| Cash and cash equivalents at beginning of period | 2,896 | 2,864 | 4,144 | 3,731 | ||||
| Cash and cash equivalents at end of period | $ 2,630 | $ 3,795 | $ 2,630 | $ 3,795 | ||||
| Three months ended | Six months ended | |||||||
| June 30, | June 30, | |||||||
| 2016 | 2015 | 2016 | 2015 | |||||
| Net cash provided by operating activities | $ 2,677 | $ 3,284 | (a) | $ 4,592 | $ 4,766 | (a) | ||
| Capital expenditures | (188) | (133) | (344) | (251) | ||||
| Free cash flow | $ 2,489 | $ 3,151 | $ 4,248 | $ 4,515 |
| Reconciliation of GAAP EPS Guidance to Non-GAAP | ||||||
| EPS Guidance for the Year Ending December 31, 2016 | ||||||
| (Unaudited) | ||||||
| GAAP diluted EPS guidance | $ 9.55 | - | $ 9.90 | |||
| Known adjustments to arrive at non-GAAP*: | ||||||
| Acquisition-related expenses | (a) | 1.35 | ||||
| Restructuring charges | 0.09 | - | 0.14 | |||
| Legal proceeding charge | 0.09 | |||||
| Tax adjustments | (b) | (0.03) | ||||
| Non-GAAP diluted EPS guidance | $ 11.10 | - | $ 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. |
| Reconciliation of GAAP Tax Rate Guidance to Non-GAAP | ||||
| Tax Rate Guidance for the Year Ending December 31, 2016 | ||||
| (Unaudited) | ||||
| 2016 | ||||
| GAAP tax rate guidance | 16.5% | - | 17.5% | |
| Tax rate effect of known adjustments discussed above | 2.5% | |||
| Non-GAAP tax rate guidance | 19.0% | - | 20.0% |