Amgen (Nasdaq: AMGN) reported adjusted earnings per share (EPS) of $1.29 for the second quarter of 2009, an increase of 13 percent compared to $1.14 for the second quarter of 2008. Adjusted net income increased 6 percent to $1,311 million in the second quarter of 2009 compared to $1,235 million in the second quarter of 2008. Total revenue decreased 1 percent during the second quarter of 2009 to $3,713 million versus $3,764 million in the second quarter of 2008.
"We are optimistic about our financial performance in 2009 and are focused on making denosumab a success," said Kevin Sharer, chairman and chief executive officer.
Adjusted EPS and adjusted net income for the second quarter of 2009 and 2008 exclude, for the applicable periods, stock option expense, certain expenses related to acquisitions, restructuring charges, the income tax benefit as a result of resolving certain non-routine transfer pricing issues with the Internal Revenue Service (IRS), loss accruals for settlements of certain commercial legal proceedings and certain other items. In addition, adjusted EPS and adjusted net income for the second quarter of 2009 and 2008 exclude the incremental non-cash interest expense resulting from a change in accounting for convertible debt as discussed below. These expenses and other items are itemized on the attached reconciliation tables.
On a reported basis and calculated in accordance with United States (U.S.) Generally Accepted Accounting Principles (GAAP), Amgen's GAAP EPS were $1.25 in the second quarter of 2009, a 49 percent increase compared to $0.84 in the same quarter last year. GAAP net income increased 40 percent to $1,269 million in the second quarter of 2009 from $906 million in the second quarter of 2008. GAAP net income for the second quarter of 2009 was positively impacted by a $115 million income tax benefit as a result of resolving certain non-routine transfer pricing issues with the IRS. GAAP net income for the second quarter of 2008 was negatively impacted by $263 million in loss accruals for settlements of certain commercial legal proceedings. Effective Jan. 1, 2009, Amgen adopted Financial Accounting Standards Board's Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"), which changed the method of accounting for the Company's convertible notes. In addition, as required, the Company also revised its previously reported financial statements to apply this change in accounting to prior periods. Under this new accounting method, the Company's GAAP EPS and net income have been reduced as a result of recognizing incremental non-cash interest expense. In connection with adopting FSP APB 14-1, Amgen recorded $62 million and $58 million of additional non-cash interest expense in the second quarter of 2009 and 2008, respectively. In addition, the Company's previously reported GAAP EPS and net income for the second quarter of 2008 have been reduced by $0.03 per share and $35 million to $0.84 per share and $906 million, respectively, as a result of adopting this new accounting method.
About Amgen
Amgen discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis and other serious illnesses. With a deep and broad pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. To learn more about our pioneering science and our vital medicines, visit www.amgen.com.