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Table of Contents
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
 
 
FORM 10-Q
 
(Mark One)
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number 0-12477
 
 
AMGEN INC.
(Exact name of registrant as specified in its charter)
 
Delaware
  
95-3540776
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S. Employer
Identification No.)
One Amgen Center Drive,
Thousand Oaks, California
  
91320-1799
(Address of principal executive offices)
  
(Zip Code)
 
Registrant’s telephone number, including area code (805) 447-1000
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No  ¨
 
As of October 31, 2002, the registrant had 1,287,065,721 shares of Common Stock, $0.0001 par value, outstanding.
 

Table of Contents
AMGEN INC.
 
INDEX
 
         
Page No.
      
PART I—FINANCIAL INFORMATION
     
     
3
       
4
       
5
       
6
       
7
     
20
     
41
PART II—OTHER INFORMATION
     
     
42
     
43
  
44
  
45
  
47

2

Table of Contents
PART I—FINANCIAL INFORMATION
 
Item 1.
   
Financial Statements
 
The information in this report for the three and nine months ended September 30, 2002 and 2001 is unaudited but includes all adjustments (consisting only of normal recurring accruals, unless otherwise indicated) which Amgen Inc. (“Amgen” or the “Company”) considers necessary for a fair presentation of the results of operations for those periods.
 
The condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.
 
Interim results are not necessarily indicative of results for future quarters or the full fiscal year.

3

Table of Contents
AMGEN INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 
    
Three months ended September 30,
     
Nine months ended September 30,
  
    
2002
     
2001
     
2002
     
2001
  
Revenues:
                                    
Product sales
   
$
1,345.8
 
   
$
879.6
 
   
$
3,369.6
 
   
$
2,536.9
 
Corporate partner revenues
   
 
62.8
 
   
 
60.6
 
   
 
148.2
 
   
 
182.0
 
Royalty income
   
 
90.7
 
   
 
62.9
 
   
 
239.1
 
   
 
172.5
 
    
  
  
  
Total revenues
   
 
1,499.3
 
   
 
1,003.1
 
   
 
3,756.9
 
   
 
2,891.4
 
    
  
  
  
Operating expenses:
                                    
Cost of sales
   
 
226.4
 
   
 
102.7
 
   
 
461.9
 
   
 
290.5
 
Research and development
   
 
312.6
 
   
 
216.9
 
   
 
749.6
 
   
 
632.4
 
Selling, general and administrative
   
 
394.9
 
   
 
221.8
 
   
 
961.2
 
   
 
644.5
 
Write off of acquired in-process research and development
   
 
2,991.8
 
   
 
—  
 
   
 
2,991.8
 
   
 
—  
 
Amortization of acquired intangible assets
   
 
70.6
 
   
 
—  
 
   
 
70.6
 
   
 
—  
 
(Earnings) loss of affiliates, net
   
 
(3.4
)
   
 
5.5
 
   
 
(6.8
)
   
 
1.9
 
Other items, net
   
 
(35.5
)
   
 
—  
 
   
 
(35.5
)
   
 
—  
 
    
  
  
  
Total operating expenses
   
 
3,957.4
 
   
 
546.9
 
   
 
5,192.8
 
   
 
1,569.3
 
    
  
  
  
Operating (loss) income
   
 
(2,458.1
)
   
 
456.2
 
   
 
(1,435.9
)
   
 
1,322.1
 
Other income (expense):
                                    
Interest and other income, net
   
 
23.7
 
   
 
44.4
 
   
 
112.9
 
   
 
133.2
 
Interest expense, net
   
 
(11.6
)
   
 
(2.3
)
   
 
(31.3
)
   
 
(10.2
)
    
  
  
  
Total other income
   
 
12.1
 
   
 
42.1
 
   
 
81.6
 
   
 
123.0
 
    
  
  
  
(Loss) income before income taxes
   
 
(2,446.0
)
   
 
498.3
 
   
 
(1,354.3
)
   
 
1,445.1
 
Provision for income taxes
   
 
155.6
 
   
 
168.4
 
   
 
494.0
 
   
 
488.4
 
    
  
  
  
Net (loss) income
   
$
(2,601.6
)
   
$
329.9
 
   
$
(1,848.3
)
   
$
956.7
 
    
  
  
  
(Loss) earnings per share:
                                    
Basic
   
$
(2.10
)
   
$
0.31
 
   
$
(1.67
)
   
$
0.92
 
Diluted
   
$
(2.10
)
   
$
0.30
 
   
$
(1.67
)
   
$
0.88
 
Shares used in calculation of (loss) earnings per share:
                                    
Basic
   
 
1,241.7
 
   
 
1,048.3
 
   
 
1,105.5
 
   
 
1,044.9
 
Diluted
   
 
1,241.7
 
   
 
1,084.6
 
   
 
1,105.5
 
   
 
1,085.4
 
 
See accompanying notes.
 

4

Table of Contents
AMGEN INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
 
    
September 30, 2002
     
December 31, 2001
ASSETS
                
Current assets:
                
Cash and cash equivalents
   
$
1,158.7
 
   
$
689.1
Marketable securities
   
 
2,883.5
 
   
 
1,973.1
Trade receivables, net
   
 
622.2
 
   
 
497.2
Inventories
   
 
526.5
 
   
 
355.6
Other current assets
   
 
633.5
 
   
 
343.6
    
  
Total current assets
   
 
5,824.4
 
   
 
3,858.6
Property, plant, and equipment, net
   
 
2,666.2
 
   
 
1,946.1
Intangible assets, net
   
 
4,904.6
 
   
 
34.1
Goodwill
   
 
9,817.2
 
   
 
97.2
Other assets
   
 
528.7
 
   
 
507.1
    
  
    
$
23,741.1
 
   
$
6,443.1
    
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   
$
197.7
 
   
$
136.7
Commercial paper
   
 
100.0
 
   
 
99.9
Accrued liabilities
   
 
1,150.3
 
   
 
766.3
Current portion of long-term debt
   
 
23.0
 
   
 
—  
    
  
Total current liabilities
   
 
1,471.0
 
   
 
1,002.9
Deferred tax liabilities
   
 
1,565.6
 
   
 
—  
Long-term debt
   
 
3,039.7
 
   
 
223.0
Stockholders’ equity:
                
Preferred stock; $0.0001 par value; 5.0 shares authorized; none issued or outstanding
   
 
—  
 
   
 
—  
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—1,282.3 shares in 2002 and 1,045.8 shares in 2001
   
 
19,098.5
 
   
 
3,474.1
(Accumulated deficit)/retained earnings
   
 
(1,467.5
)
   
 
1,686.8
Accumulated other comprehensive income
   
 
33.8
 
   
 
56.3
    
  
Total stockholders’ equity
   
 
17,664.8
 
   
 
5,217.2
    
  
    
$
23,741.1
 
   
$
6,443.1
    
  
 
See accompanying notes.

5

Table of Contents
AMGEN INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
    
Nine months ended September 30,
  
    
2002
     
2001
  
Cash flows from operating activities:
                  
Net (loss) income
   
$
(1,848.3
)
   
$
956.7
 
Write-off of acquired in-process research and development
   
 
2,991.8
 
   
 
—  
 
Depreciation and amortization
   
 
283.1
 
   
 
189.7
 
Tax benefits related to employee stock options
   
 
181.6
 
   
 
166.5
 
Net gain on investments
   
 
(4.1
)
   
 
(12.4
)
Other
   
 
22.2
 
   
 
7.1
 
Cash provided by (used in) changes in operating assets and liabilities, net of the acquisition:
                  
Trade receivables, net
   
 
8.3
 
   
 
(92.3
)
Inventories
   
 
(78.1
)
   
 
(114.3
)
Other current assets
   
 
(30.0
)
   
 
(6.4
)
Accounts payable
   
 
(54.0
)
   
 
(72.9
)
Accrued liabilities
   
 
(43.8
)
   
 
(67.0
)
    
  
Net cash provided by operating activities
   
 
1,428.7
 
   
 
954.7
 
    
  
Cash flows from investing activities: