Item 2.02 Results of Operations and Financial Condition.
On August 3, 2021, Amgen Inc. (the Company) issued a press release announcing
its unaudited results of operations for the three and six months ended June 30,
2021, and its unaudited financial position as of June 30, 2021. The full text of
the press release is furnished as Exhibit 99.1 hereto.
In its press release the Company included certain non-U.S. Generally Accepted
Accounting Principles (GAAP) financial measures as defined in Regulation G
promulgated by the Securities and Exchange Commission. The non-GAAP financial
measures included in the press release are non-GAAP earnings per share, non-GAAP
operating income, non-GAAP operating margin, non-GAAP tax rate, non-GAAP net
income, non-GAAP operating expenses and sub-components of non-GAAP operating
expenses such as non-GAAP cost of sales, non-GAAP research and development (R&D)
expenses and non-GAAP selling, general and administrative expenses.
Reconciliations for such non-GAAP financial measures to the most directly
comparable GAAP financial measures are included in the press release. The
Company also included Free Cash Flow (FCF), which is computed by subtracting
capital expenditures from operating cash flow, each as determined in accordance
with GAAP.
The Company believes that this 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 uses non-GAAP financial measures 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.
The following is a summary of the costs and other items excluded from the most
directly comparable GAAP financial measures to calculate non-GAAP financial
measures:
•Acquisition-related expenses: Acquisition-related charges are primarily
associated with intangible assets acquired in connection with business
acquisitions. Such charges include amortization of developed-product-technology
rights, licensing rights, R&D technology rights, and marketing-related rights,
as well as impairments of in-process R&D assets. The Company incurs charges
related to these intangibles, and those charges are included in the Company's
Condensed Consolidated Financial Statements. Charges for purchased intangible
assets are significantly impacted by the timing and magnitude of the Company's
acquisitions and potential product approvals as they relate to in-process R&D
projects acquired. Accordingly, these charges may vary in amount from period to
period. The Company excludes these charges for purposes of calculating the
non-GAAP financial measures presented to facilitate a more meaningful evaluation
of the Company's current operating performance and comparisons to past operating
performance. The Company believes that excluding the noncash charges related to
those intangible assets acquired in business acquisitions treats those assets as
if the Company had developed them internally in the past and, thus, provides a
supplemental measure of profitability in which the Company's acquired
intellectual property is treated in a comparable manner to its
internally-developed-intellectual property.
•Net charges pursuant to the Company's costs savings initiatives: Costs from
cost savings initiatives are primarily related to facilities charges, including
accelerated depreciation, and severance and benefits for employees terminated
pursuant to our transformation and process improvement efforts. Costs from such
initiatives are inconsistent in amount and are significantly impacted by the
timing and nature of these events. Therefore, although the Company may incur
these types of expenses in the future, it believes that eliminating these
charges for purposes of calculating the non-GAAP financial measures provides a
supplemental evaluation of the Company's current operating performance and
facilitates comparisons to past operating performance.
•Other items: The Company adjusts GAAP financial results for certain income and
expenses (or gains and losses). These adjustments include certain items from
investment transactions, including amortization and impairments from the basis
difference that arises from certain equity method investments and certain gains
and losses on our investments in equity securities that are recorded to other
income and expense. Further, the Company also adjusts GAAP financial results for
certain items associated with judgments and/or settlements for legal proceedings
discussed in our filings. The Company excludes these items for the purpose of
calculating the non-GAAP financial measures presented because the Company
believes these items are outside the ordinary course of business. The Company
believes eliminating these items provides a supplemental evaluation of the
Company's current operating performance and facilitates comparisons to past
operating performance.

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•The tax effect of the adjustments between GAAP and non-GAAP results take 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 cost savings initiatives, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rate(s) in those jurisdictions. The press release also contains a discussion of the additional purposes for which the Company's management uses these non-GAAP financial measures, including, effective January 1, 2021, we began to exclude the gains and losses on our investments in equity securities from our non-GAAP measures that are recorded to other income and expense. This exclusion does not apply to our share of the earnings and losses of our strategic investments in corporations accounted for under the equity method of accounting, such as our investment in BeiGene. The Company began excluding gains and losses from equity investments for the purpose of calculating the non-GAAP financial measures presented because the Company believes the results of such gains and losses are not representative of our normal business operations. We made this change in 2021 because, as we have increased our investments in these companies, we recognized that the resulting variability can impede comparability between periods of our financial performance for our ongoing business operations. For comparability of results to the prior year, non-GAAP net income and non-GAAP EPS amounts for 2020 have also been revised to reflect this update to our non-GAAP policy. This information and the information contained in the press release shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report is not incorporated by reference into any filings of the Company made under the Securities Act of 1933, as amended, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing unless specifically stated so therein.

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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.

       99.1            Press Release dated A    ugust 3    , 2021
        104          Cover Page Interactive Data File (embedded within the Inline XBRL document).

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