What is the main reason Amgen is providing non-GAAP financial measures in this report?

Amgen is providing non-GAAP financial measures to offer investors supplemental information that they believe provides a clearer view of the company's underlying operational performance. These measures exclude certain items that management believes are not indicative of ongoing business trends, such as acquisition-related costs, certain compensation expenses, and amortization of acquired intangibles.

What major events are causing the adjustments to Amgen's GAAP financial results?

The significant events causing adjustments to Amgen's GAAP financial results include the acquisitions of Tularik, Inc. and Immunex Corporation, as well as a patent litigation settlement with Genentech, Inc. Additionally, for the nine months ended September 30, 2003, adjustments also covered cost recovery from an arbitration with Johnson & Johnson and a contribution to the Amgen Foundation.

How does Amgen's non-GAAP reporting treat acquired assets like Enbrel®?

For acquired intangible assets, primarily related to Enbrel® from the Immunex Acquisition, Amgen reports non-GAAP adjusted net income and earnings per share that exclude the ongoing, non-cash amortization. The company states this approach is intended to treat these acquired assets similarly to internally developed intellectual property, providing a supplemental measure of profitability.

Are the non-GAAP adjustments the same for all periods presented?

No, the adjustments differ depending on the period. For 2004, adjustments focus on Tularik and Immunex acquisition costs (like retention compensation, R&D write-offs) and the Genentech settlement. For 2003, adjustments included Immunex acquisition costs, Genentech settlement, cost recovery from arbitration, and foundation contributions. The specific expense categories adjusted also vary slightly between the three-month and nine-month periods within each year.

AMGN 8-K: Earnings & Results

Summary

Amgen Inc. filed a Form 8-K on October 26, 2004, reporting its financial results for the third quarter and the first nine months of 2004. The primary focus of this filing is to present both GAAP and non-GAAP financial measures, highlighting the company's approach to providing investors with supplemental information. The company explains its adjustments to GAAP figures, which are primarily related to significant acquisitions, namely Tularik, Inc. and Immunex Corporation, as well as a patent litigation settlement with Genentech, Inc. These adjustments are made to exclude certain one-time or non-cash expenses, such as employee retention compensation related to acquisitions, amortization of acquired intangible assets (like Enbrel®), and in-process R&D write-offs. Amgen believes these non-GAAP measures offer a clearer view of operational performance by enabling period-to-period comparisons that are less impacted by these extraordinary items.

Key Highlights

1Amgen Inc. reported its financial results for the three and nine months ended September 30, 2004, via a press release on October 20, 2004.
2The filing includes both GAAP and non-GAAP financial measures, with non-GAAP measures presented to offer supplemental investor insights.
3Adjustments to GAAP figures for 2004 primarily relate to expenses from the Tularik and Immunex acquisitions, including incremental employee compensation and R&D write-offs.
4A patent litigation settlement with Genentech, Inc. also influenced the adjustments, particularly impacting SG&A expense.
5Non-GAAP measures exclude ongoing, non-cash amortization of acquired intangible assets, such as those related to Enbrel® from the Immunex acquisition.
6For the prior year (2003), adjustments also pertained to the Immunex acquisition and Genentech settlement, with additional exclusions for cost recovery from a Johnson & Johnson arbitration and a contribution to the Amgen Foundation.
7Amgen uses these non-GAAP measures internally for budgeting and financial planning.

AMGEN INC 8-K Report, Financial Results (Oct 26, 2004)

Summary

Key Highlights

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