8-KOther EventsExhibits & Filings

AMGEN INC 8-K Report, Corporate Update (Oct 31, 2016)

Filed October 31, 2016For Securities:AMGN

Summary

Amgen Inc. (AMGN) filed this 8-K to announce the retrospective adoption of two new accounting standards: ASU 2015-03 regarding debt issuance costs and ASU 2016-09 concerning employee share-based payment accounting. These changes primarily affect the presentation of financial information, not the underlying business operations or financial health of the company. For investors, the key takeaway is that certain line items in prior financial statements, specifically within the 2015 Form 10-K, are being recast to comply with these updated accounting rules. Debt issuance costs will now be presented as a direct reduction of debt liabilities on the balance sheet, and aspects of share-based payment accounting, particularly tax benefits/deficiencies and cash payments related to withholding taxes, will be reclassified within the statement of cash flows. Investors should refer to the updated exhibits for the precise financial statement impact.

Key Highlights

  • 1Amgen is retrospectively adopting ASU 2015-03, which changes the presentation of debt issuance costs from an asset to a direct deduction from debt liabilities.
  • 2Amgen is retrospectively adopting ASU 2016-09, impacting the classification of items related to employee share-based payments in the statement of cash flows.
  • 3Excess income tax benefits and deficiencies from share-based payments will now be classified under operating activities (previously financing).
  • 4Cash paid for withholding taxes on share-based payments will now be classified under financing activities (previously operating).
  • 5This filing recasts certain sections of the 2015 Form 10-K, including Selected Financial Data, MD&A, Market Risk Disclosures, Financial Statements, and Controls and Procedures.
  • 6The purpose is to comply with new accounting standards, not to report new business events or changes in financial performance.
  • 7Investors should consult the attached exhibits for the specific financial statement impacts of these accounting standard adoptions.

Frequently Asked Questions

Amgen is filing this 8-K to announce the retrospective adoption of two new accounting standards (ASU 2015-03 and ASU 2016-09). This means they are updating how certain financial information from their 2015 Annual Report (10-K) is presented to comply with these new rules.

Under the new standard (ASU 2015-03), costs incurred when issuing debt will no longer be shown as a separate asset (deferred charge). Instead, they will be directly subtracted from the total amount of debt on the balance sheet, reducing the reported net debt value.

This new standard reclassifies certain cash flows related to employee stock-based compensation. Specifically, tax benefits or shortfalls related to these awards will now be reported as operating cash flows, and cash paid to tax authorities for shares withheld from employees will be reported as financing cash flows.

No, this filing is purely an accounting change. It is not related to any new business developments, changes in strategy, or variations in the company's financial performance. It's a technical adjustment to how financial data is reported according to updated accounting rules.