Infliximab-AXXQ(Amgen, Inc.)

THOUSAND OAKS, Calif. , April 27, 2023 /PRNewswire/ -- Amgen (NASDAQ:AMGN) today announced financial results for the first quarter of 2023. "We delivered 14% volume growth driven by the breadth of our portfolio and strong demand for our products globally," said Robert A. Bradway , chairman and chief executive officer. "We look forward to closing the acquisition of Horizon Therapeutics and joining forces to reach more patients around the world with their innovative medicines." Key results include: References in this release to "non-GAAP" measures, measures presented "on a non-GAAP basis," "free cash flow" (computed by subtracting capital expenditures from operating cash flow) and "total revenues and product sales adjusted for foreign exchange impact" (computed by converting our current period local currency product sales using the prior period foreign exchange rates and comparing that to our current period product sales) refer to non-GAAP financial measures. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations. Refer to Non-GAAP Financial Measures below for further discussion. Product Sales Performance Total product sales increased 2% for the first quarter of 2023 versus the first quarter of 2022. Unit volumes grew 14%, partially offset by 5% lower net selling price, 3% unfavorable changes to estimated sales deductions, 2% lower inventory levels and 2% negative impact from foreign exchange. General Medicine Inflammation Hematology-Oncology Established Products Product Sales Detail by Product and Geographic Region $Millions, except percentages Q1 '23 Q1 '22 YOY Δ US ROW TOTAL TOTAL TOTAL Repatha ® 197 191 388 329 18 % Prolia ® 623 304 927 852 9 % EVENITY ® 164 90 254 170 49 % Aimovig ® 64 5 69 101 (32 %) TEZSPIRE ® 96 — 96 7 * TAVNEOS ® 23 — 23 — NM Otezla ® 294 98 392 451 (13 %) Enbrel ® 564 15 579 862 (33 %) AMJEVITA ® /AMGEVITA ™ 51 113 164 108 52 % BLINCYTO ® 126 68 194 138 41 % Vectibix ® 111 122 233 201 16 % KYPROLIS ® 234 124 358 287 25 % LUMAKRAS ® /LUMYKRAS ™ 48 26 74 62 19 % XGEVA ® 384 152 536 502 7 % Nplate ® 246 116 362 266 36 % MVASI ® 121 81 202 244 (17 %) KANJINTI ® 33 14 47 96 (51 %) EPOGEN ® 60 — 60 120 (50 %) Aranesp ® 115 240 355 358 (1 %) Parsabiv ® 58 33 91 86 6 % Neulasta ® 211 38 249 348 (28 %) Other products** 152 41 193 143 35 % Total product sales $      3,975 $      1,871 $      5,846 $      5,731 2 % *Change in excess of 100% ** Other products include Corlanor ® , AVSOLA ® , NEUPOGEN ® , RIABNI ® , IMLYGIC ® and Sensipar ® /Mimpara ™ , as well as sales by Bergamo and GENSENTA subsidiaries. NM = not meaningful Operating Expense, Operating Margin and Tax Rate Analysis On a GAAP basis: On a non-GAAP basis: $Millions, except percentages GAAP Non-GAAP Q1 '23 Q1 '22 YOY Δ Q1 '23 Q1 '22 YOY Δ Cost of Sales $  1,720 $  1,561 10 % $  1,016 $    951 7 % % of product sales 29.4 % 27.2 % 2.2 pts 17.4 % 16.6 % 0.8 pts Research & Development $  1,058 $    959 10 % $  1,044 $    934 12 % % of product sales 18.1 % 16.7 % 1.4 pts 17.9 % 16.3 % 1.6 pts Selling, General & Administrative $  1,258 $  1,228 2 % $  1,224 $  1,213 1 % % of product sales 21.5 % 21.4 % 0.1 pts 20.9 % 21.2 % (0.3) pts Other $    148 $     (10) * $       — $       — NM Total Operating Expenses $  4,184 $  3,738 12 % $  3,284 $  3,098 6 % Operating Margin operating income as % of product sales 32.9 % 43.6 % (10.7) pts 48.3 % 54.8 % (6.5) pts Tax Rate 17.5 % 11.9 % 5.6 pts 17.8 % 14.1 % 3.7 pts pts: percentage points * change in excess of 100% NM = not meaningful Cash Flow and Balance Sheet $Billions, except shares Q1 '23 Q1 '22 YOY Δ Operating Cash Flow $       1.1 $       2.2 $    (1.1) Capital Expenditures $       0.3 $       0.2 $     0.2 Free Cash Flow $       0.7 $       2.0 $    (1.3) Dividends Paid $       1.1 $       1.1 $     0.1 Share Repurchases $        — $       6.3 $    (6.3) Average Diluted Shares (millions) 538 551 (13) Note: Numbers may not add due to rounding $Billions 3/31/23 12/31/22 YTD Δ Cash and Investments $     31.6 $       9.3 $   22.3 Debt Outstanding $     61.6 $     38.9 $   22.7 Note: Numbers may not add due to rounding 2023 Guidance (Excludes any contribution from the announced acquisition of Horizon Therapeutics plc) The Company expects the announced acquisition of Horizon Therapeutics plc (Horizon) to close in the first half of 2023. For the full year 2023, excluding any contribution from the announced acquisition of Horizon, the Company now expects: First Quarter Product and Pipeline Update The Company provided the following updates on selected product and pipeline programs: General Medicine Olpasiran (AMG 890) AMG 133 AMG 786 Repatha Prolia Aimovig Inflammation TEZSPIRE Rocatinlimab (AMG 451 / KHK4083) Rozibafusp alfa (AMG 570) Efavaleukin alfa (AMG 592) Ordesekimab (AMG 714 / PRV-015) Oncology BLINCYTO Tarlatamab (AMG 757) Bemarituzumab LUMAKRAS/LUMYKRAS Xaluritamig (formerly AMG 509) AMG 340 AMG 193 Biosimilars TEZSPIRE is being developed in collaboration with AstraZeneca. Rocatinlimab, formerly AMG 451 / KHK4083 is being developed in collaboration with Kyowa Kirin. Ordesekimab formerly AMG 714 and also known as PRV-015 is being developed in collaboration with Provention Bio. AMG 509 is being developed in collaboration with Xencor. Humira is a registered trademark of AbbVie, Inc. STELARA is a registered trademark of Janssen Pharmaceutica NV . EYLEA is a registered trademark of Regeneron Pharmaceuticals, Inc. SOLIRIS is a registered trademark of Alexion Pharmaceuticals, Inc. Non-GAAP Financial Measures In this news release, management has presented its operating results for the first quarters of 2023 and 2022, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2023 EPS and tax 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, divestitures, restructuring and certain other items from the related GAAP financial measures. Beginning January 1, 2022 , following industry guidance from the U.S. Securities and Exchange Commission , the Company no longer excludes adjustments for upfront license fees, development milestones and in-process research and development (IPR&D) expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions from its non-GAAP financial measures. GAAP financial measures are included in the news release. Management has presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the first quarter of 2023 and 2022. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Management has also presented Total Revenues and Product Sales Adjusted for Foreign Exchange Impact, which is a non-GAAP financial measure, for the first quarter of 2023. Total Revenues and Product Sales Adjusted for Foreign Exchange Impact is computed by converting our current period local currency product sales using the prior period foreign exchange rates and comparing that to our current period product sales. 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 believes Total Revenues and Product Sales Adjusted for Foreign Exchange Impact provides supplementary information on the Company's product sales performance by excluding changes in foreign exchange rates between comparative periods. The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. About Amgen Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology. Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential. Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average and is also part of the Nasdaq-100 index. In 2022, Amgen was named one of the "World's Best Employers" by Forbes and one of "America's 100 Most Sustainable Companies" by Barron's. For more information, visit Amgen.com and follow us on Twitter, LinkedIn, Instagram, TikTok and YouTube. Forward-Looking Statements This news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen . All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including any statements on the outcome, benefits and synergies of collaborations, or potential collaborations, with any other company (including BeiGene, Ltd., Kyowa-Kirin Co., Ltd., or any collaboration to manufacture therapeutic antibodies against COVID-19), the performance of Otezla ® (apremilast) (including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion), the Five Prime Therapeutics, Inc. acquisition, the Teneobio, Inc. acquisition, the ChemoCentryx, Inc. acquisition, or the proposed acquisition of Horizon Therapeutics plc, as well as estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes, effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, outcomes, progress, and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission reports filed by Amgen , including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K. Unless otherwise noted, Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise. No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products, including our devices, after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. In addition, our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation. We perform a substantial amount of our commercial manufacturing activities at a few key facilities, including in Puerto Rico , and also depend on third parties for a portion of our manufacturing activities, and limits on supply may constrain sales of certain of our current products and product candidate development. An outbreak of disease or similar public health threat, such as COVID-19, and the public and governmental effort to mitigate against the spread of such disease, could have a significant adverse effect on the supply of materials for our manufacturing activities, the distribution of our products, the commercialization of our product candidates, and our clinical trial operations, and any such events may have a material adverse effect on our product development, product sales, business and results of operations. We rely on collaborations with third parties for the development of some of our product candidates and for the commercialization and sales of some of our commercial products. In addition, we compete with other companies with respect to many of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indication for an existing product will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Certain of our distributors, customers and payers have substantial purchasing leverage in their dealings with us. The discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations. Our efforts to collaborate with or acquire other companies, products or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful. A breakdown, cyberattack or information security breach of our information technology systems could compromise the confidentiality, integrity and availability of our systems and our data. Our stock price is volatile and may be affected by a number of events. Our business and operations may be negatively affected by the failure, or perceived failure, of achieving our environmental, social and governance objectives. The effects of global climate change and related natural disasters could negatively affect our business and operations. Global economic conditions may magnify certain risks that affect our business. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all. CONTACT: Amgen , Thousand Oaks Jessica Akopyan , 805-440-5721 (media) Arvind Sood , 805-447-1060 (investors) Amgen Inc. Consolidated Statements of Income - GAAP (In millions, except per-share data) (Unaudited) Three months ended March 31 , 2023 2022 Revenues: Product sales $    5,846 $    5,731 Other revenues 259 507 Total revenues 6,105 6,238 Operating expenses: Cost of sales 1,720 1,561 Research and development 1,058 959 Selling, general and administrative 1,258 1,228 Other 148 (10) Total operating expenses 4,184 3,738 Operating income 1,921 2,500 Other income (expense): Interest expense, net (543) (295) Other income (expense), net 2,064 (530) Income before income taxes 3,442 1,675 Provision for income taxes 601 199 Net income $    2,841 $    1,476 Earnings per share: Basic $      5.32 $      2.69 Diluted $      5.28 $      2.68 Weighted-average shares used in calculation of earnings per share: Basic 534 548 Diluted 538 551 Amgen Inc. Consolidated Balance Sheets - GAAP (In millions) March 31 , December 31 , 2023 2022 (Unaudited) Assets Current assets: Cash, cash equivalents and marketable securities $              31,561 $                9,305 Trade receivables, net 5,736 5,563 Inventories 5,011 4,930 Other current assets 2,395 2,388 Total current assets 44,703 22,186 Property, plant and equipment, net 5,460 5,427 Intangible assets, net 15,393 16,080 Goodwill 15,531 15,529 Other noncurrent assets 7,633 5,899 Total assets $              88,720 $              65,121 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $              13,381 $              14,096 Current portion of long-term debt 834 1,591 Total current liabilities 14,215 15,687 Long-term debt 60,761 37,354 Long-term tax liabilities 5,864 5,757 Other noncurrent liabilities 2,532 2,662 Total stockholders' equity 5,348 3,661 Total liabilities and stockholders' equity $              88,720 $              65,121 Shares outstanding 534 534 Amgen Inc. GAAP to Non-GAAP Reconciliations (Dollars in millions) (Unaudited) Three months ended March 31 , 2023 2022 GAAP cost of sales $       1,720 $       1,561 Adjustments to cost of sales: Acquisition-related expenses (a) (669) (610) Certain net charges pursuant to our restructuring and cost savings initiatives (35) — Total adjustments to cost of sales (704) (610) Non-GAAP cost of sales $       1,016 $          951 GAAP cost of sales as a percentage of product sales 29.4 % 27.2 % Acquisition-related expenses (a) (11.4) (10.6) Certain net charges pursuant to our restructuring and cost savings initiatives (0.6) 0.0 Non-GAAP cost of sales as a percentage of product sales 17.4 % 16.6 % GAAP research and development expenses $       1,058 $          959 Adjustments to research and development expenses: Acquisition-related expenses (a) (14) (25) Non-GAAP research and development expenses $       1,044 $          934 GAAP research and development expenses as a percentage of product sales 18.1 % 16.7 % Acquisition-related expenses (a) (0.2) (0.4) Non-GAAP research and development expenses as a percentage of product sales 17.9 % 16.3 % GAAP selling, general and administrative expenses $       1,258 $       1,228 Adjustments to selling, general and administrative expenses: Acquisition-related expenses (a) (34) (15) Non-GAAP selling, general and administrative expenses $       1,224 $       1,213 GAAP selling, general and administrative expenses as a percentage of product sales 21.5 % 21.4 % Acquisition-related expenses (a) (0.6) (0.2) Non-GAAP selling, general and administrative expenses as a percentage of product sales 20.9 % 21.2 % GAAP operating expenses $       4,184 $       3,738 Adjustments to operating expenses: Adjustments to cost of sales (704) (610) Adjustments to research and development expenses (14) (25) Adjustments to selling, general and administrative expenses (34) (15) Certain net charges pursuant to our restructuring and cost savings initiatives (b) (141) (2) Certain other expenses (c) (7) 12 Total adjustments to operating expenses (900) (640) Non-GAAP operating expenses $       3,284 $       3,098 Three months ended March 31 , 2023 2022 GAAP operating income $       1,921 $       2,500 Adjustments to operating expenses 900 640 Non-GAAP operating income $       2,821 $       3,140 GAAP operating income as a percentage of product sales 32.9 % 43.6 % Adjustments to cost of sales 12.0 10.6 Adjustments to research and development expenses 0.2 0.4 Adjustments to selling, general and administrative expenses 0.6 0.2 Certain net charges pursuant to our restructuring and cost savings initiatives (b) 2.5 0.1 Certain other expenses (c) 0.1 (0.1) Non-GAAP operating income as a percentage of product sales 48.3 % 54.8 % GAAP interest expense, net $        (543) $        (295) Adjustments to interest expense, net: Interest expense on acquisition-related debt (d) 123 — Non-GAAP interest expense, net $        (420) $        (295) GAAP other income (expense), net $       2,064 $        (530) Adjustments to other income (expense), net: Interest income and other expenses on acquisition-related debt (d) (6) — Equity method investment basis difference amortization — 47 Net (gains)/losses from equity investments (e) (1,853) 365 Total adjustments to other income (expense), net (1,859) 412 Non-GAAP other income (expense), net $          205 $        (118) GAAP income before income taxes $       3,442 $       1,675 Adjustments to income before income taxes: Adjustments to operating expenses 900 640 Adjustments to interest expense, net 123 — Adjustments to other income (expense), net (1,859) 412 Total adjustments to income before income taxes (836) 1,052 Non-GAAP income before income taxes $       2,606 $       2,727 GAAP provision for income taxes $          601 $          199 Adjustments to provision for income taxes: Income tax effect of the above adjustments (f) (117) 189 Other income tax adjustments (g) (19) (4) Total adjustments to provision for income taxes (136) 185 Non-GAAP provision for income taxes $          465 $          384 GAAP tax as a percentage of income before taxes 17.5 % 11.9 % Adjustments to provision for income taxes: Income tax effect of the above adjustments (f) 1.0 2.3 Other income tax adjustments (g) (0.7) (0.1) Total adjustments to provision for income taxes 0.3 2.2 Non-GAAP tax as a percentage of income before taxes 17.8 % 14.1 % GAAP net income $       2,841 $       1,476 Adjustments to net income: Adjustments to income before income taxes, net of the income tax effect (719) 863 Other income tax adjustments (g) 19 4 Total adjustments to net income (700) 867 Non-GAAP net income $       2,141 $       2,343 Note: Numbers may not add due to rounding Amgen Inc. GAAP to Non-GAAP Reconciliations (In millions, except per-share data) (Unaudited) The following table presents the computations for GAAP and non-GAAP diluted earnings per share: Three months ended March 31, 2023 Three months ended March 31, 2022 GAAP Non-GAAP GAAP Non-GAAP Net income $        2,841 $        2,141 $        1,476 $        2,343 Weighted-average shares for diluted EPS 538 538 551 551 Diluted EPS $          5.28 $          3.98 $          2.68 $          4.25 (a) The adjustments related primarily to noncash amortization of intangible assets from business acquisitions. (b) For the three months ended March 31, 2023 , the adjustments related primarily to severance expenses associated with our restructuring plan initiated in early 2023. (c) For the three months ended March 31, 2023 , the adjustments related to the change in fair values of contingent consideration liabilities. For the three months ended March 31, 2022 , the adjustments related primarily to an in-process research and development asset adjustment. (d) For the three months ended March 31, 2023 , the adjustments included (i) interest expense and income on senior notes issued in March 2023 and (ii) debt issuance costs and other fees related to our bridge credit and term loan credit agreements, incurred prior to the closing of our proposed acquisition of Horizon Therapeutics plc. (e) For the three months ended March 31, 2023 , the adjustments related primarily to our BeiGene, Ltd. equity fair value adjustment. (f) 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 expenses related to restructuring and cost savings initiatives, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rate for the adjustments to our GAAP income before income taxes for the three months ended March 31, 2023 , was 14.0% compared to 18.0% for the corresponding period of the prior year. (g) The adjustments related to certain acquisition items, prior period and other items excluded from GAAP earnings. Amgen Inc. Reconciliations of Cash Flows (In millions) (Unaudited) Three months ended March 31 , 2023 2022 Net cash provided by operating activities $     1,064 $     2,164 Net cash provided by (used in) investing activities 1,358 (111) Net cash provided by (used in) financing activities 21,509 (3,514) Increase (decrease) in cash and cash equivalents 23,931 (1,461) Cash and cash equivalents at beginning of period 7,629 7,989 Cash and cash equivalents at end of period $   31,560 $     6,528 Three months ended March 31 , 2023 2022 Net cash provided by operating activities $     1,064 $     2,164 Capital expenditures (344) (190) Free cash flow $       720 $     1,974 Amgen Inc. Reconciliation of Total Revenues and Product Sales Adjusted for Foreign Exchange (FX) Impact (Dollars in millions) (Unaudited) Three months ended March 31 , 2023 2022 Change FX impact $ (a) Three months ended March 31, 2023 excluding FX FX impact % (a) Change excluding FX Product Sales $       5,846 $       5,731 2 % $         (103) $        5,949 (2 %) 4 % Total Revenues $       6,105 $       6,238 (2 %) $         (103) $        6,208 (2 %) — % (a) Foreign exchange impact was calculated by converting our current period local currency Product sales using the prior period foreign exchange rates and comparing that to our current period Product sales. Amgen Inc Reconciliation of GAAP EPS Guidance to Non-GAAP EPS Guidance for the Year Ending December 31, 2023 (Unaudited) GAAP diluted EPS guidance $  15.38 — $ 16.59 Known adjustments to arrive at non-GAAP*: Acquisition-related expenses (a) 4.31 — 4.36 Net charges related to restructuring and cost savings initiatives 0.47 — 0.53 Net (gains)/losses from equity investments (2.70) Other 0.03 Non-GAAP diluted EPS guidance $  17.60 — $ 18.70 * The known adjustments are presented net of their related tax impact, which amount to approximately $0.48 - $0.50 per share. (a) The adjustments relate primarily to noncash amortization of intangible assets acquired in business acquisitions. Our GAAP diluted EPS guidance does not include the effect of GAAP adjustments triggered by events that may occur subsequent to this press release such as acquisitions, including any impact of the proposed Horizon acquisition, divestitures, asset impairments, litigation, changes in fair value of our contingent consideration obligations and changes in fair value of our equity investments. Reconciliation of GAAP Tax Rate Guidance to Non-GAAP Tax Rate Guidance for the Year Ending December 31, 2023 (Unaudited) GAAP tax rate guidance 17.0 % — 18.5 % Tax rate of known adjustments discussed above 0.5 % — 1.0 % Non-GAAP tax rate guidance 18.0 % — 19.0 % View original content to download multimedia: https://www.prnewswire.com/news-releases/amgen-reports-first-quarter-financial-results-301810090.html SOURCE Amgen

AMGEN ALSO PROVIDES 2023 GUIDANCE EXCLUDING ANY CONTRIBUTION FROM THE ANNOUNCED ACQUISITION OF HORIZON THERAPEUTICS THOUSAND OAKS, Calif. , Jan. 31, 2023 /PRNewswire/ -- Amgen (NASDAQ: AMGN) today announced financial results for the fourth quarter and full year 2022 versus comparable periods in 2021. "We executed effectively in 2022, delivering strong volume growth, advancing numerous first-in-class medicines in our pipeline, and staying on track to achieve our long-term growth objectives," said Robert A. Bradway , chairman and chief executive officer. "The announced acquisition of Horizon Therapeutics, which we expect to complete in the first half of this year, represents a compelling opportunity to serve more patients and strengthen our growth profile." Key results include: Non-GAAP EPS has been recast due to an update to our non-GAAP policy effective January 1, 2022 , resulting in a $0.04 increase for the fourth quarter of 2021 and a $3.18 decrease for the full year 2021 of previously-reported non-GAAP EPS.  Refer to Non-GAAP Financial Measures below for further discussion. $Millions, except EPS, dividends paid per share and percentages Q4 '22 Q4 '21 YOY Δ FY '22 FY '21 YOY Δ Total Revenues $  6,839 $   6,846 — % $ 26,323 $ 25,979 1 % GAAP Operating Income $  2,230 $   2,304 (3 %) $   9,566 $   7,639 25 % GAAP Net Income $  1,616 $   1,899 (15 %) $   6,552 $   5,893 11 % GAAP EPS $    3.00 $     3.36 (11 %) $   12.11 $   10.28 18 % Non-GAAP Operating Income $  3,009 $   2,997 — % $ 12,761 $ 10,519 21 % Non-GAAP Net Income $  2,202 $   2,487 (11 %) $   9,570 $   7,978 20 % Non-GAAP EPS $    4.09 $     4.40 (7 %) $   17.69 $   13.92 27 % Dividends Paid Per Share $    1.94 $     1.76 10 % $     7.76 $     7.04 10 % References in this release to "non-GAAP" measures, measures presented "on a non-GAAP basis," "free cash flow" (computed by subtracting capital expenditures from operating cash flow), "total revenues and product sales adjusted for foreign currency exchange rate impact" (computed by converting our current period local currency product sales using the prior period foreign currency exchange rates and comparing that to our current period product sales), "EBITDA, or earnings before interest, taxes, depreciation and amortization" (computed by adding interest expense, provision for income taxes, and depreciation and amortization expense to GAAP net income) and "debt leverage ratio" (calculated as the ratio of GAAP total debt to EBITDA) refer to non-GAAP financial measures. Beginning January 1, 2022 , the Company's non-GAAP financial measures no longer exclude adjustments for upfront license fees, development milestones and IPR&D expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions. For purposes of comparability, the non-GAAP financial results for the fourth quarter and full year of 2021 have been updated to reflect this change. Adjustments to the most directly comparable GAAP financial measures and other items are presented on the attached reconciliations. Refer to Non-GAAP Financial Measures below for further discussion. Product Sales Performance Total product sales increased 4% for the fourth quarter of 2022 versus the fourth quarter of 2021. Unit volumes grew 10%, partially offset by 3% lower net selling price and 2% negative impact from foreign exchange. Product sales for the full year increased 2% versus 2021, driven by 9% volume growth, partially offset by 5% lower net selling price and 2% negative impact from foreign exchange. General Medicine Inflammation Hematology-Oncology Product Sales Detail by Product and Geographic Region $Millions, except percentages Q4 '22 Q4 '21 YOY Δ US ROW TOTAL TOTAL TOTAL Prolia ® 682 310 992 873 14 % EVENITY ® 157 68 225 143 57 % Repatha ® 147 186 333 273 22 % Aimovig ® 109 5 114 90 27 % EPOGEN ® 114 — 114 128 (11 %) Aranesp ® 124 224 348 362 (4 %) Parsabiv ® 64 29 93 69 35 % Sensipar ® /Mimpara ™ (3) 10 7 18 (61 %) TEZSPIRE ® 79 — 79 — NM TAVNEOS ® 16 5 21 — NM Otezla ® 520 96 616 630 (2 %) Enbrel ® 1,079 19 1,098 1,108 (1 %) AMGEVITA ™ — 119 119 115 3 % LUMAKRAS ® /LUMYKRAS ™ 62 9 71 45 58 % KYPROLIS ® 224 101 325 284 14 % XGEVA ® 358 126 484 545 (11 %) Vectibix ® 109 129 238 243 (2 %) Nplate ® 374 95 469 282 66 % BLINCYTO ® 96 68 164 132 24 % MVASI ® 134 71 205 304 (33 %) KANJINTI ® 50 13 63 139 (55 %) Neulasta ® 187 34 221 351 (37 %) NEUPOGEN ® 22 12 34 31 10 % Other products* 90 29 119 106 12 % Total product sales $      4,794 $      1,758 $      6,552 $      6,271 4 % * Other products include Corlanor ® , AVSOLA ® , IMLYGIC ® and RIABNI ® , as well as sales by GENSENTA and Bergamo subsidiaries NM = not meaningful $Millions, except percentages FY '22 FY '21 YOY Δ US ROW TOTAL TOTAL TOTAL Prolia ® 2,465 1,163 3,628 $      3,248 12 % EVENITY ® 533 254 787 530 48 % Repatha ® 608 688 1,296 1,117 16 % Aimovig ® 398 16 414 317 31 % EPOGEN ® 506 — 506 521 (3 %) Aranesp ® 521 900 1,421 1,480 (4 %) Parsabiv ® 253 129 382 280 36 % Sensipar ® /Mimpara ™ 10 54 64 84 (24 %) TEZSPIRE ® 170 — 170 — NM TAVNEOS ® 16 5 21 — NM Otezla ® 1,886 402 2,288 2,249 2 % Enbrel ® 4,044 73 4,117 4,465 (8 %) AMGEVITA ™ — 460 460 439 5 % LUMAKRAS ® /LUMYKRAS ™ 222 63 285 90 * KYPROLIS ® 850 397 1,247 1,108 13 % XGEVA ® 1,480 534 2,014 2,018 — % Vectibix ® 396 497 893 873 2 % Nplate ® 848 459 1,307 1,027 27 % BLINCYTO ® 336 247 583 472 24 % MVASI ® 602 299 901 1,166 (23 %) KANJINTI ® 257 59 316 572 (45 %) Neulasta ® 959 167 1,126 1,734 (35 %) NEUPOGEN ® 87 57 144 168 (14 %) Other products** 296 135 431 339 27 % Total product sales $    17,743 $      7,058 $    24,801 $    24,297 2 % * Change in excess of 100% ** Other products include Corlanor ® , AVSOLA ® , IMLYGIC ® and RIABNI ® , as well as sales by GENSENTA and Bergamo subsidiaries NM = not meaningful Operating Expense, Operating Margin and Tax Rate Analysis On a GAAP basis: On a non-GAAP basis: $Millions, except percentages GAAP Non-GAAP Q4 '22 Q4 '21 YOY Δ Q4 '22 Q4 '21 YOY Δ Cost of Sales $  1,747 $  1,718 2 % $  1,071 $  1,096 (2 %) % of product sales 26.7 % 27.4 % (0.7) pts 16.3 % 17.5 % (1.2) pts Research & Development $  1,324 $  1,348 (2 %) $  1,291 $  1,319 (2 %) % of product sales 20.2 % 21.5 % (1.3) pts 19.7 % 21.0 % (1.3) pts Selling, General & Administrative $  1,572 $  1,425 10 % $  1,468 $  1,434 2 % % of product sales 24.0 % 22.7 % 1.3 pts 22.4 % 22.9 % (0.5) pts Other $     (34) $      51 * $       — $       — NM Total Operating Expenses $  4,609 $  4,542 1 % $  3,830 $  3,849 — % Operating Margin operating income as % of product sales 34.0 % 36.7 % (2.7) pts 45.9 % 47.8 % (1.9) pts Tax Rate 7.6 % 10.9 % (3.3) pts 13.4 % 10.6 % 2.8 pts pts: percentage points * change in excess of 100% NM = not meaningful $Millions, except percentages GAAP Non-GAAP FY '22 FY '21 YOY Δ FY '22 FY '21 YOY Δ Cost of Sales $  6,406 $  6,454 (1 %) $  3,951 $  3,994 (1 %) % of product sales 25.8 % 26.6 % (0.8) pts 15.9 % 16.4 % (0.5) pts Research & Development $  4,434 $  4,819 (8 %) $  4,341 $  4,696 (8 %) % of product sales 17.9 % 19.8 % (1.9) pts 17.5 % 19.3 % (1.8) pts Acquired IPR&D $       — $  1,505 NM $       — $  1,505 NM % of product sales — % 6.2 % NM — % 6.2 % NM Selling, General & Administrative $  5,414 $  5,368 1 % $  5,270 $  5,265 — % % of product sales 21.8 % 22.1 % (0.3) pts 21.2 % 21.7 % (0.5) pts Other $    503 $    194 * $       — $       — NM Total Operating Expenses $ 16,757 $ 18,340 (9 %) $ 13,562 $ 15,460 (12 %) Operating Margin operating income as % of product sales 38.6 % 31.4 % 7.2 pts 51.5 % 43.3 % 8.2 pts Tax Rate 10.8 % 12.1 % (1.3) pts 13.8 % 14.5 % (0.7) pts pts: percentage points * change in excess of 100% NM = not meaningful Cash Flow and Balance Sheet $Billions, except shares Q4 '22 Q4 '21 YOY Δ FY '22 FY '21 YOY Δ Operating Cash Flow $       2.6 $       2.8 $    (0.2) $       9.7 $       9.3 $      0.5 Capital Expenditures $       0.3 $       0.3 $     0.1 $       0.9 $       0.9 $      0.1 Free Cash Flow $       2.3 $       2.5 $    (0.2) $       8.8 $       8.4 $      0.4 Dividends Paid $       1.0 $       1.0 $     0.1 $       4.2 $       4.0 $      0.2 Share Repurchases $        — $       1.5 $    (1.5) $       6.3 $       5.0 $      1.3 Average Diluted Shares (millions) 539 565 (26) 541 573 (32) Note: Numbers may not add due to rounding $Billions 12/31/22 12/31/21 YTD Δ Cash and Investments $       9.3 $       8.0 $     1.3 Debt Outstanding $     38.9 $     33.3 $     5.6 Note: Numbers may not add due to rounding 2023 Guidance (Excludes any contribution from the announced acquisition of Horizon Therapeutics) For the full year 2023, excluding any contribution from the announced acquisition of Horizon Therapeutics, the Company expects: Fourth Quarter Product and Pipeline Update The Company provided the following updates on selected product and pipeline programs: General Medicine Repatha Olpasiran (AMG 890) AMG 133 AMG 786 Inflammation TEZSPIRE Rocatinlimab (AMG 451 / KHK4083) Rozibafusp alfa (AMG 570) Efavaleukin alfa (AMG 592) Ordesekimab (AMG 714 / PRV-015) Oncology BLINCYTO LUMAKRAS/LUMYKRAS Bemarituzumab Tarlatamab (AMG 757) AMG 509 AMG 340 AMG 193 Biosimilars TEZSPIRE is being developed in collaboration with AstraZeneca. Rocatinlimab, formerly AMG 451 / KHK4083 is being developed in collaboration with KKC. Ordesekimab formerly AMG 714 and also known as PRV-015 is being developed in collaboration with Provention Bio. AMG 509 is being developed in collaboration with Xencor. STELARA is a registered trademark of Janssen Pharmaceutica NV . EYLEA is a registered trademark of Regeneron Pharmaceuticals, Inc. SOLIRIS is a registered trademark of Alexion Pharmaceuticals, Inc. Non-GAAP Financial Measures In this news release, management has presented its operating results for the fourth quarters and full years of 2022 and 2021, in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and on a non-GAAP basis. In addition, management has presented its full year 2023 EPS and tax 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, divestitures, restructuring and certain other items from the related GAAP financial measures. Beginning January 1, 2022 , following industry guidance from the U.S. Securities and Exchange Commission , the Company no longer excludes adjustments for upfront license fees, development milestones and IPR&D expenses of pre-approval programs related to licensing, collaboration and asset acquisition transactions from its non-GAAP financial measures. For purposes of comparability, the non-GAAP financial results for the fourth quarter and full year of 2021 have been updated to reflect this change. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release. Management has presented Free Cash Flow (FCF), which is a non-GAAP financial measure, for the fourth quarters and full years of 2022 and 2021. FCF is computed by subtracting capital expenditures from operating cash flow, each as determined in accordance with GAAP. Management has presented Total Revenues and Product Sales Adjusted for Foreign Currency Exchange Rate Impact, which is a non-GAAP financial measure, for the fourth quarter and full year of 2022. Total Revenues and Product Sales Adjusted for Foreign Currency Exchange Rate Impact is computed by converting our current period local currency product sales using the prior period foreign currency exchange rates and comparing that to our current period product sales. Management has also presented Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and debt leverage ratio for 2022, both of which are non-GAAP financial measures. EBITDA is computed by adding interest expense, provision for income taxes, and depreciation and amortization expense to GAAP net income. Debt leverage ratio is calculated as the ratio of GAAP total debt to EBITDA. 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 believes Total Revenues and Product Sales Adjusted for Foreign Currency Exchange Rate Impact provides supplementary information on the Company's product sales performance by excluding changes in foreign currency exchange rates between comparative periods. The Company believes its debt leverage ratio provides an important ongoing operating metric as it compares the amount of cash generated by our operations during a given period relative to our debt obligations outstanding for the same period. The Company uses the non-GAAP financial measures set forth in the news release in connection with its own budgeting and financial planning internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. The non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. About Amgen Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology. Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people's lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential. Amgen is one of the 30 companies that comprise the Dow Jones Industrial Average and is also part of the Nasdaq-100 index. In 2022, Amgen was named one of the "World's Best Employers" by Forbes and one of "America's 100 Most Sustainable Companies" by Barron's. For more information, visit www.amgen.com and follow us on www.twitter.com/amgen . Forward-Looking Statements This news release contains forward-looking statements that are based on the current expectations and beliefs of Amgen . All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including any statements on the outcome, benefits and synergies of collaborations, or potential collaborations, with any other company (including BeiGene, Ltd., Kyowa-Kirin Co., Ltd., or any collaboration to manufacture therapeutic antibodies against COVID-19), the performance of Otezla ® (apremilast) (including anticipated Otezla sales growth and the timing of non-GAAP EPS accretion), the Five Prime Therapeutics, Inc. acquisition, the Teneobio, Inc. acquisition, the ChemoCentryx, Inc. acquisition, or the proposed acquisition of Horizon Therapeutics plc, as well as estimates of revenues, operating margins, capital expenditures, cash, other financial metrics, expected legal, arbitration, political, regulatory or clinical results or practices, customer and prescriber patterns or practices, reimbursement activities and outcomes, effects of pandemics or other widespread health problems such as the ongoing COVID-19 pandemic on our business, outcomes, progress, and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those discussed below and more fully described in the Securities and Exchange Commission reports filed by Amgen , including our most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K. Unless otherwise noted, Amgen is providing this information as of the date of this news release and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise. No forward-looking statement can be guaranteed and actual results may differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing products domestically and internationally, clinical and regulatory developments involving current and future products, sales growth of recently launched products, competition from other products including biosimilars, difficulties or delays in manufacturing our products and global economic conditions. In addition, sales of our products are affected by pricing pressure, political and public scrutiny and reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products, including our devices, after they are on the market. Our business may be impacted by government investigations, litigation and product liability claims. In addition, our business may be impacted by the adoption of new tax legislation or exposure to additional tax liabilities. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors, or we may fail to prevail in present and future intellectual property litigation. We perform a substantial amount of our commercial manufacturing activities at a few key facilities, including in Puerto Rico , and also depend on third parties for a portion of our manufacturing activities, and limits on supply may constrain sales of certain of our current products and product candidate development. An outbreak of disease or similar public health threat, such as COVID-19, and the public and governmental effort to mitigate against the spread of such disease, could have a significant adverse effect on the supply of materials for our manufacturing activities, the distribution of our products, the commercialization of our product candidates, and our clinical trial operations, and any such events may have a material adverse effect on our product development, product sales, business and results of operations. We rely on collaborations with third parties for the development of some of our product candidates and for the commercialization and sales of some of our commercial products. In addition, we compete with other companies with respect to many of our marketed products as well as for the discovery and development of new products. Discovery or identification of new product candidates or development of new indications for existing products cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate or development of a new indication for an existing product will be successful and become a commercial product. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Certain of our distributors, customers and payers have substantial purchasing leverage in their dealings with us. The discovery of significant problems with a product similar to one of our products that implicate an entire class of products could have a material adverse effect on sales of the affected products and on our business and results of operations. Our efforts to collaborate with or acquire other companies, products or technology, and to integrate the operations of companies or to support the products or technology we have acquired, may not be successful. A breakdown, cyberattack or information security breach of our information technology systems could compromise the confidentiality, integrity and availability of our systems and our data. Our stock price is volatile and may be affected by a number of events. Our business and operations may be negatively affected by the failure, or perceived failure, of achieving our environmental, social and governance objectives. The effects of global climate change and related natural disasters could negatively affect our business and operations. Global economic conditions may magnify certain risks that affect our business. Our business performance could affect or limit the ability of our Board of Directors to declare a dividend or our ability to pay a dividend or repurchase our common stock. We may not be able to access the capital and credit markets on terms that are favorable to us, or at all. CONTACT: Amgen , Thousand Oaks Jessica Akopyan , 805-440-5721 (media) Arvind Sood , 805-447-1060 (investors) Amgen Inc. Consolidated Statements of Income - GAAP (In millions, except per-share data) (Unaudited) Three months ended December 31 , Twelve months ended December 31 , 2022 2021 2022 2021 Revenues: Product sales $    6,552 $    6,271 $  24,801 $  24,297 Other revenues 287 575 1,522 1,682 Total revenues 6,839 6,846 26,323 25,979 Operating expenses: Cost of sales 1,747 1,718 6,406 6,454 Research and development 1,324 1,348 4,434 4,819 Acquired in-process research and development — — — 1,505 Selling, general and administrative 1,572 1,425 5,414 5,368 Other (34) 51 503 194 Total operating expenses 4,609 4,542 16,757 18,340 Operating income 2,230 2,304 9,566 7,639 Other income (expense): Interest expense, net (415) (335) (1,406) (1,197) Other (expense) income, net (67) 162 (814) 259 Income before income taxes 1,748 2,131 7,346 6,701 Provision for income taxes 132 232 794 808 Net income $    1,616 $    1,899 $    6,552 $    5,893 Earnings per share: Basic $      3.02 $      3.38 $    12.18 $    10.34 Diluted $      3.00 $      3.36 $    12.11 $    10.28 Weighted-average shares used in calculation of earnings per share: Basic 535 562 538 570 Diluted 539 565 541 573 Amgen Inc. Consolidated Balance Sheets - GAAP (In millions) December 31 , December 31 , 2022 2021 (Unaudited) Assets Current assets: Cash, cash equivalents and marketable securities $                9,305 $                8,037 Trade receivables, net 5,563 4,895 Inventories 4,930 4,086 Other current assets 2,388 2,367 Total current assets 22,186 19,385 Property, plant and equipment, net 5,427 5,184 Intangible assets, net 16,080 15,182 Goodwill 15,529 14,890 Other noncurrent assets 5,899 6,524 Total assets $              65,121 $              61,165 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $              14,096 $              12,097 Current portion of long-term debt 1,591 87 Total current liabilities 15,687 12,184 Long-term debt 37,354 33,222 Long-term tax liabilities 5,757 6,594 Other noncurrent liabilities 2,662 2,465 Total stockholders' equity 3,661 6,700 Total liabilities and stockholders' equity $              65,121 $              61,165 Shares outstanding 534 558 Amgen Inc. GAAP to Non-GAAP Reconciliations (Dollars in millions) (Unaudited) Three months ended December 31 , Twelve months ended December 31 , 2022 2021 2022 2021 GAAP cost of sales $       1,747 $       1,718 $       6,406 $       6,454 Adjustments to cost of sales: Acquisition-related expenses (a) (676) (616) (2,455) (2,443) Other — (6) — (17) Total adjustments to cost of sales (676) (622) (2,455) (2,460) Non-GAAP cost of sales $       1,071 $       1,096 $       3,951 $       3,994 GAAP cost of sales as a percentage of product sales 26.7 % 27.4 % 25.8 % 26.6 % Acquisition-related expenses (a) (10.4) (9.8) (9.9) (10.1) Other 0.0 (0.1) 0.0 (0.1) Non-GAAP cost of sales as a percentage of product sales 16.3 % 17.5 % 15.9 % 16.4 % GAAP research and development expenses $       1,324 $       1,348 $       4,434 $       4,819 Adjustments to research and development expenses: Acquisition-related expenses (a) (33) (29) (93) (123) Non-GAAP research and development expenses $       1,291 $       1,319 $       4,341 $       4,696 GAAP research and development expenses as a percentage of product sales 20.2 % 21.5 % 17.9 % 19.8 % Acquisition-related expenses (a) (0.5) (0.5) (0.4) (0.5) Non-GAAP research and development expenses as a percentage of product sales 19.7 % 21.0 % 17.5 % 19.3 % GAAP selling, general and administrative expenses $       1,572 $       1,425 $       5,414 $       5,368 Adjustments to selling, general and administrative expenses: Acquisition-related expenses (a) (104) (20) (144) (87) Other — 29 — (16) Total adjustments to selling, general and administrative expenses (104) 9 (144) (103) Non-GAAP selling, general and administrative expenses $       1,468 $       1,434 $       5,270 $       5,265 GAAP selling, general and administrative expenses as a percentage of product sales 24.0 % 22.7 % 21.8 % 22.1 % Acquisition-related expenses (a) (1.6) (0.3) (0.6) (0.4) Other 0.0 0.5 0.0 0.0 Non-GAAP selling, general and administrative expenses as a percentage of product sales 22.4 % 22.9 % 21.2 % 21.7 % GAAP operating expenses $       4,609 $       4,542 $     16,757 $     18,340 Adjustments to operating expenses: Adjustments to cost of sales (676) (622) (2,455) (2,460) Adjustments to research and development expenses (33) (29) (93) (123) Adjustments to selling, general and administrative expenses (104) 9 (144) (103) Certain charges pursuant to our cost savings initiatives 1 (1) 8 (130) Certain other expenses (b) 33 (50) (511) (64) Total adjustments to operating expenses (779) (693) (3,195) (2,880) Non-GAAP operating expenses $       3,830 $       3,849 $     13,562 $     15,460 Three months ended December 31 , Twelve months ended December 31 , 2022 2021 2022 2021 GAAP operating income $       2,230 $       2,304 $       9,566 $       7,639 Adjustments to operating expenses 779 693 3,195 2,880 Non-GAAP operating income $       3,009 $       2,997 $     12,761 $     10,519 GAAP operating income as a percentage of product sales 34.0 % 36.7 % 38.6 % 31.4 % Adjustments to cost of sales 10.4 9.9 9.9 10.2 Adjustments to research and development expenses 0.5 0.5 0.4 0.5 Adjustments to selling, general and administrative expenses 1.6 (0.2) 0.6 0.4 Certain charges pursuant to our cost savings initiatives 0.0 0.0 0.0 0.5 Certain other expenses (b) (0.6) 0.9 2.0 0.3 Non-GAAP operating income as a percentage of product sales 45.9 % 47.8 % 51.5 % 43.3 % GAAP interest expense, net $        (415) $        (335) $     (1,406) $     (1,197) Adjustments to interest expense, net: Acquisition-related interest expense (c) 5 — 5 — Non-GAAP interest expense, net $        (410) $        (335) $     (1,401) (1,197) GAAP other (expense) income, net $          (67) $          162 $        (814) $          259 Adjustments to other (expense) income, net: Equity method investment basis difference amortization 49 45 192 173 Net (gains)/losses from equity investments (39) (86) 362 (421) Total adjustments to other (expense) income, net 10 (41) 554 (248) Non-GAAP other (expense) income, net $          (57) $          121 $        (260) 11 GAAP income before income taxes $       1,748 $       2,131 $       7,346 $       6,701 Adjustments to income before income taxes: Adjustments to operating expenses 779 693 3,195 2,880 Adjustments to interest expense, net 5 — 5 — Adjustments to other (expense) income, net 10 (41) 554 (248) Total adjustments to income before income taxes 794 652 3,754 2,632 Non-GAAP income before income taxes $       2,542 $       2,783 $     11,100 $       9,333 GAAP provision for income taxes $          132 $          232 $          794 $          808 Adjustments to provision for income taxes: Income tax effect of the above adjustments (d) 163 78 690 544 Other income tax adjustments (c) 45 (14) 46 3 Total adjustments to provision for income taxes 208 64 736 547 Non-GAAP provision for income taxes $          340 $          296 $       1,530 $       1,355 GAAP tax as a percentage of income before taxes 7.6 % 10.9 % 10.8 % 12.1 % Adjustments to provision for income taxes: Income tax effect of the above adjustments (d) 4.0 0.2 2.6 2.4 Other income tax adjustments (c) 1.8 (0.5) 0.4 0.0 Total adjustments to provision for income taxes 5.8 (0.3) 3.0 2.4 Non-GAAP tax as a percentage of income before taxes 13.4 % 10.6 % 13.8 % 14.5 % GAAP net income $       1,616 $       1,899 $       6,552 $       5,893 Adjustments to net income: Adjustments to income before income taxes, net of the income tax effect 631 574 3,064 2,088 Other income tax adjustments (c) (45) 14 (46) (3) Total adjustments to net income 586 588 3,018 2,085 Non-GAAP net income $       2,202 $       2,487 $       9,570 $       7,978 Note: Numbers may not add due to rounding Amgen Inc. GAAP to Non-GAAP Reconciliations (In millions, except per-share data) (Unaudited) The following table presents the computations for GAAP and non-GAAP diluted earnings per share: Three months ended December 31, 2022 Three months ended December 31, 2021 GAAP Non-GAAP GAAP Non-GAAP Net income $        1,616 $        2,202 $        1,899 $        2,487 Weighted-average shares for diluted EPS 539 539 565 565 Diluted EPS $          3.00 $          4.09 $          3.36 $          4.40 Twelve months ended December 31, 2022 Twelve months ended December 31, 2021 GAAP Non-GAAP GAAP Non-GAAP Net income $        6,552 $        9,570 $        5,893 $        7,978 Weighted-average shares for diluted EPS 541 541 573 573 Diluted EPS $        12.11 $        17.69 $        10.28 $        13.92 (a) The adjustments related primarily to noncash amortization of intangible assets from business acquisitions. (b) For the three months ended December 31, 2022 , the adjustments related primarily to the change in fair values of contingent consideration liabilities. For the twelve months ended December 31, 2022 , the adjustments related primarily to cumulative foreign currency translation adjustments from a nonstrategic divestiture. For the three and twelve months ended December 31, 2021 , the adjustments related primarily to the change in fair values of contingent consideration liabilities. (c) The adjustments related to certain acquisition items, prior period and other items excluded from GAAP earnings. (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 initiatives, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those jurisdictions. Due to these factors, the effective tax rate for the adjustments to our GAAP income before income taxes, for the three and twelve months ended December 31, 2022 , were 20.5% and 18.4%, respectively, compared to 12.0% and 20.7% for the corresponding period of the prior year. Amgen Inc. Reconciliations of Cash Flows (In millions) (Unaudited) Three months ended December 31 , Twelve months ended December 31 , 2022 2021 2022 2021 Net cash provided by operating activities $     2,649 $     2,808 $      9,721 $      9,261 Net cash (used in) provided by investing activities (3,473) (230) (6,044) 733 Net cash used in financing activities (1,049) (6,558) (4,037) (8,271) (Decrease) increase in cash and cash equivalents (1,873) (3,980) (360) 1,723 Cash and cash equivalents at beginning of period 9,502 11,969 7,989 6,266 Cash and cash equivalents at end of period $     7,629 $     7,989 $      7,629 $      7,989 Three months ended December 31 , Twelve months ended December 31 , 2022 2021 2022 2021 Net cash provided by operating activities $     2,649 $     2,808 $      9,721 $      9,261 Capital expenditures (340) (287) (936) (880) Free cash flow $     2,309 $     2,521 $      8,785 $      8,381 Amgen Inc. Reconciliation of Total Revenues and Product Sales Adjusted for Foreign Currency Exchange Rate Impact (Dollars in millions) (Unaudited) Three months ended December 31 , 2022 2021 Change FX impact $ (a) Three months ended December 31 , 2022 excluding FX FX impact % (a) Change excluding FX Product Sales $       6,552 $       6,271 4 % $         (155) $        6,707 (2 %) 7 % Total Revenues $       6,839 $       6,846 — % $         (155) $        6,994 (2 %) 2 % Twelve months ended December 31 , 2022 2021 Change FX impact $ (a) Twelve months ended December 31 , 2022 excluding FX FX impact % (a) Change excluding FX Product Sales $     24,801 $     24,297 2 % $         (548) $      25,349 (2 %) 4 % Total Revenues $     26,323 $     25,979 1 % $         (548) $      26,871 (2 %) 3 % (a) Foreign currency impact was calculated by converting our current period local currency Product sales using the prior period foreign currency exchange rates and comparing that to our current period Product sales. Amgen Inc. Reconciliation of GAAP Net Income to EBITDA and Debt Leverage Ratio Calculation (Dollars in millions) (Unaudited) Twelve months ended December 31, 2022 GAAP Net Income $                   6,552 Depreciation and amortization 3,417 Interest expense, net 1,406 Provision for income taxes 794 EBITDA $                 12,169 As of December 31 , 2022 Current portion of long-term debt $                   1,591 Long-term debt 37,354 Total Debt $                 38,945 As of December 31 , 2022 Total Debt $                 38,945 EBITDA $                 12,169 Debt leverage ratio 3.2 Amgen Inc. Reconciliation of GAAP EPS Guidance to Non-GAAP EPS Guidance for the Year Ending December 31, 2023 (Unaudited) GAAP diluted EPS guidance $  13.16 — $ 14.41 Known adjustments to arrive at non-GAAP*: Acquisition-related expenses (a) 4.19 — 4.24 Non-GAAP diluted EPS guidance $  17.40 — $ 18.60 * The known adjustments are presented net of their related tax impact, which amount to approximately $1.15 per share. (a) The adjustments relate primarily to noncash amortization of intangible assets acquired in business acquisitions. Our GAAP diluted EPS guidance does not include the effect of GAAP adjustments triggered by events that may occur subsequent to this press release such as acquisitions, including any impact of the proposed Horizon Therapeutics plc acquisition, divestitures, asset impairments, litigation, changes in fair value of our contingent consideration obligations and changes in fair value of our equity investments. Reconciliation of GAAP Tax Rate Guidance to Non-GAAP Tax Rate Guidance for the Year Ending December 31, 2023 (Unaudited) GAAP tax rate guidance 17.0 % — 18.5 % Tax rate of known adjustments discussed above 0.5 % — 1.0 % Non-GAAP tax rate guidance 18.0 % — 19.0 % View original content to download multimedia: https://www.prnewswire.com/news-releases/amgen-reports-fourth-quarter-and-full-year-2022-financial-results-301735074.html SOURCE Amgen