þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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)
|
|
|
Page No.
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
Item 1.
|
FINANCIAL STATEMENTS
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Product sales
|
$
|
5,343
|
|
|
$
|
5,199
|
|
Other revenues
|
211
|
|
|
265
|
|
||
Total revenues
|
5,554
|
|
|
5,464
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Cost of sales
|
944
|
|
|
996
|
|
||
Research and development
|
760
|
|
|
769
|
|
||
Selling, general and administrative
|
1,127
|
|
|
1,064
|
|
||
Other
|
(3
|
)
|
|
44
|
|
||
Total operating expenses
|
2,828
|
|
|
2,873
|
|
||
|
|
|
|
||||
Operating income
|
2,726
|
|
|
2,591
|
|
||
|
|
|
|
||||
Interest expense, net
|
338
|
|
|
326
|
|
||
Interest and other income, net
|
231
|
|
|
195
|
|
||
|
|
|
|
||||
Income before income taxes
|
2,619
|
|
|
2,460
|
|
||
|
|
|
|
||||
Provision for income taxes
|
308
|
|
|
389
|
|
||
|
|
|
|
||||
Net income
|
$
|
2,311
|
|
|
$
|
2,071
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
3.27
|
|
|
$
|
2.81
|
|
Diluted
|
$
|
3.25
|
|
|
$
|
2.79
|
|
|
|
|
|
||||
Shares used in calculation of earnings per share:
|
|
|
|
||||
Basic
|
707
|
|
|
737
|
|
||
Diluted
|
711
|
|
|
741
|
|
||
|
|
|
|
||||
Dividends paid per share
|
$
|
1.32
|
|
|
$
|
1.15
|
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
2,311
|
|
|
$
|
2,071
|
|
Other comprehensive (loss) income, net of reclassification adjustments and taxes:
|
|
|
|
||||
Foreign currency translation gains
|
29
|
|
|
24
|
|
||
Effective portion of cash flow hedges
|
6
|
|
|
(73
|
)
|
||
Net unrealized (losses) gains on available-for-sale securities
|
(352
|
)
|
|
158
|
|
||
Other
|
2
|
|
|
—
|
|
||
Other comprehensive (loss) income, net of taxes
|
(315
|
)
|
|
109
|
|
||
Comprehensive income
|
$
|
1,996
|
|
|
$
|
2,180
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,741
|
|
|
$
|
3,800
|
|
Marketable securities
|
22,431
|
|
|
37,878
|
|
||
Trade receivables, net
|
3,633
|
|
|
3,237
|
|
||
Inventories
|
2,952
|
|
|
2,834
|
|
||
Other current assets
|
1,932
|
|
|
1,727
|
|
||
Total current assets
|
40,689
|
|
|
49,476
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
4,943
|
|
|
4,989
|
|
||
Intangible assets, net
|
8,779
|
|
|
8,609
|
|
||
Goodwill
|
14,771
|
|
|
14,761
|
|
||
Other assets
|
1,982
|
|
|
2,119
|
|
||
Total assets
|
$
|
71,164
|
|
|
$
|
79,954
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,089
|
|
|
$
|
1,352
|
|
Accrued liabilities
|
7,207
|
|
|
6,516
|
|
||
Current portion of long-term debt
|
2,183
|
|
|
1,152
|
|
||
Total current liabilities
|
10,479
|
|
|
9,020
|
|
||
|
|
|
|
||||
Long-term debt
|
33,358
|
|
|
34,190
|
|
||
Long-term deferred tax liabilities
|
1,215
|
|
|
1,166
|
|
||
Long-term tax liabilities
|
9,166
|
|
|
9,099
|
|
||
Other noncurrent liabilities
|
1,326
|
|
|
1,238
|
|
||
|
|
|
|
||||
Contingencies and commitments
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 666.4 shares in 2018 and 722.2 shares in 2017
|
31,001
|
|
|
30,992
|
|
||
Accumulated deficit
|
(14,387
|
)
|
|
(5,072
|
)
|
||
Accumulated other comprehensive loss
|
(994
|
)
|
|
(679
|
)
|
||
Total stockholders’ equity
|
15,620
|
|
|
25,241
|
|
||
Total liabilities and stockholders’ equity
|
$
|
71,164
|
|
|
$
|
79,954
|
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
2,311
|
|
|
$
|
2,071
|
|
Depreciation and amortization
|
471
|
|
|
524
|
|
||
Share-based compensation expense
|
54
|
|
|
60
|
|
||
Deferred income taxes
|
(72
|
)
|
|
(77
|
)
|
||
Other items, net
|
44
|
|
|
15
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Trade receivables, net
|
(384
|
)
|
|
(47
|
)
|
||
Inventories
|
(107
|
)
|
|
(125
|
)
|
||
Other assets
|
(135
|
)
|
|
(155
|
)
|
||
Accounts payable
|
(278
|
)
|
|
(20
|
)
|
||
Accrued income taxes, net
|
353
|
|
|
268
|
|
||
Long-term tax liability
|
63
|
|
|
124
|
|
||
Other liabilities
|
407
|
|
|
(253
|
)
|
||
Net cash provided by operating activities
|
2,727
|
|
|
2,385
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of marketable securities
|
(2,732
|
)
|
|
(7,077
|
)
|
||
Proceeds from sales of marketable securities
|
16,694
|
|
|
5,612
|
|
||
Proceeds from maturities of marketable securities
|
900
|
|
|
1,528
|
|
||
Cash acquired in acquisition, net of cash paid
|
197
|
|
|
—
|
|
||
Purchases of property, plant and equipment
|
(155
|
)
|
|
(168
|
)
|
||
Other
|
2
|
|
|
(52
|
)
|
||
Net cash provided by (used in) investing activities
|
14,906
|
|
|
(157
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayment of debt
|
—
|
|
|
(605
|
)
|
||
Repurchases of common stock
|
(10,697
|
)
|
|
(586
|
)
|
||
Dividends paid
|
(951
|
)
|
|
(847
|
)
|
||
Other
|
(44
|
)
|
|
(73
|
)
|
||
Net cash used in financing activities
|
(11,692
|
)
|
|
(2,111
|
)
|
||
Increase in cash and cash equivalents
|
5,941
|
|
|
117
|
|
||
Cash and cash equivalents at beginning of period
|
3,800
|
|
|
3,241
|
|
||
Cash and cash equivalents at end of period
|
$
|
9,741
|
|
|
$
|
3,358
|
|
|
|
Amount
|
||
Total cash paid to Kirin
|
|
$
|
780
|
|
Fair value of contingent consideration obligation
|
|
45
|
|
|
Loss on settlement of preexisting relationship
|
|
(168
|
)
|
|
Total consideration transferred to acquire K-A
|
|
657
|
|
|
|
|
|
||
Fair value of Amgen’s investment in K-A
|
|
825
|
|
|
Total acquisition date fair value
|
|
$
|
1,482
|
|
|
|
Three months ended March 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
|
US
|
|
ROW
|
|
Total
|
|
US
|
|
ROW
|
|
Total
|
||||||||||||
Neulasta
®
|
|
$
|
1,009
|
|
|
$
|
146
|
|
|
$
|
1,155
|
|
|
$
|
1,048
|
|
|
$
|
162
|
|
|
$
|
1,210
|
|
Enbrel
®
|
|
1,050
|
|
|
55
|
|
|
1,105
|
|
|
1,118
|
|
|
63
|
|
|
1,181
|
|
||||||
Sensipar
®
/ Mimpara
®
|
|
409
|
|
|
88
|
|
|
497
|
|
|
337
|
|
|
84
|
|
|
421
|
|
||||||
Prolia
®
|
|
320
|
|
|
174
|
|
|
494
|
|
|
279
|
|
|
146
|
|
|
425
|
|
||||||
Aranesp
®
|
|
225
|
|
|
229
|
|
|
454
|
|
|
278
|
|
|
233
|
|
|
511
|
|
||||||
XGEVA
®
|
|
332
|
|
|
113
|
|
|
445
|
|
|
298
|
|
|
104
|
|
|
402
|
|
||||||
EPOGEN
®
|
|
244
|
|
|
—
|
|
|
244
|
|
|
270
|
|
|
—
|
|
|
270
|
|
||||||
Other products
|
|
558
|
|
|
391
|
|
|
949
|
|
|
467
|
|
|
312
|
|
|
779
|
|
||||||
Total product sales
1
|
|
$
|
4,147
|
|
|
$
|
1,196
|
|
|
$
|
5,343
|
|
|
$
|
4,095
|
|
|
$
|
1,104
|
|
|
$
|
5,199
|
|
Other revenues
|
|
|
|
|
|
211
|
|
|
|
|
|
|
265
|
|
||||||||||
Total revenues
2
|
|
|
|
|
|
$
|
5,554
|
|
|
|
|
|
|
$
|
5,464
|
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Income (Numerator):
|
|
|
|
||||
Net income for basic and diluted EPS
|
$
|
2,311
|
|
|
$
|
2,071
|
|
|
|
|
|
||||
Shares (Denominator):
|
|
|
|
||||
Weighted-average shares for basic EPS
|
707
|
|
|
737
|
|
||
Effect of dilutive securities
|
4
|
|
|
4
|
|
||
Weighted-average shares for diluted EPS
|
711
|
|
|
741
|
|
||
|
|
|
|
||||
Basic EPS
|
$
|
3.27
|
|
|
$
|
2.81
|
|
Diluted EPS
|
$
|
3.25
|
|
|
$
|
2.79
|
|
Type of security as of March 31, 2018
|
|
Amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
value
|
||||||||
U.S. Treasury securities
|
|
$
|
5,207
|
|
|
$
|
—
|
|
|
$
|
(104
|
)
|
|
$
|
5,103
|
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
132
|
|
|
—
|
|
|
(3
|
)
|
|
129
|
|
||||
Foreign and other
|
|
1,714
|
|
|
3
|
|
|
(43
|
)
|
|
1,674
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
6,189
|
|
|
1
|
|
|
(137
|
)
|
|
6,053
|
|
||||
Industrial
|
|
5,687
|
|
|
6
|
|
|
(128
|
)
|
|
5,565
|
|
||||
Other
|
|
916
|
|
|
1
|
|
|
(21
|
)
|
|
896
|
|
||||
Residential-mortgage-backed securities
|
|
1,745
|
|
|
—
|
|
|
(46
|
)
|
|
1,699
|
|
||||
Other mortgage- and asset-backed securities
|
|
1,293
|
|
|
—
|
|
|
(26
|
)
|
|
1,267
|
|
||||
Money market mutual funds
|
|
9,234
|
|
|
—
|
|
|
—
|
|
|
9,234
|
|
||||
Other short-term interest-bearing securities
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||
Total available-for-sale investments
|
|
$
|
32,167
|
|
|
$
|
11
|
|
|
$
|
(508
|
)
|
|
$
|
31,670
|
|
Type of security as of December 31, 2017
|
|
Amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
value
|
||||||||
U.S. Treasury securities
|
|
$
|
8,313
|
|
|
$
|
1
|
|
|
$
|
(72
|
)
|
|
$
|
8,242
|
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
225
|
|
|
—
|
|
|
(2
|
)
|
|
223
|
|
||||
Foreign and other
|
|
2,415
|
|
|
18
|
|
|
(11
|
)
|
|
2,422
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
10,089
|
|
|
17
|
|
|
(34
|
)
|
|
10,072
|
|
||||
Industrial
|
|
9,688
|
|
|
34
|
|
|
(52
|
)
|
|
9,670
|
|
||||
Other
|
|
1,393
|
|
|
3
|
|
|
(6
|
)
|
|
1,390
|
|
||||
Residential-mortgage-backed securities
|
|
2,198
|
|
|
—
|
|
|
(30
|
)
|
|
2,168
|
|
||||
Other mortgage- and asset-backed securities
|
|
2,312
|
|
|
—
|
|
|
(15
|
)
|
|
2,297
|
|
||||
Money market mutual funds
|
|
3,245
|
|
|
—
|
|
|
—
|
|
|
3,245
|
|
||||
Other short-term interest-bearing securities
|
|
1,440
|
|
|
—
|
|
|
—
|
|
|
1,440
|
|
||||
Total interest-bearing securities
|
|
41,318
|
|
|
73
|
|
|
(222
|
)
|
|
41,169
|
|
||||
Equity securities
|
|
135
|
|
|
14
|
|
|
—
|
|
|
149
|
|
||||
Total available-for-sale investments
|
|
$
|
41,453
|
|
|
$
|
87
|
|
|
$
|
(222
|
)
|
|
$
|
41,318
|
|
Condensed Consolidated Balance Sheets location
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
|
$
|
9,239
|
|
|
$
|
3,291
|
|
Marketable securities
|
|
22,431
|
|
|
37,878
|
|
||
Other assets
|
|
—
|
|
|
149
|
|
||
Total available-for-sale investments
|
|
$
|
31,670
|
|
|
$
|
41,318
|
|
Contractual maturity
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Maturing in one year or less
|
|
$
|
9,403
|
|
|
$
|
6,733
|
|
Maturing after one year through three years
|
|
6,579
|
|
|
12,820
|
|
||
Maturing after three years through five years
|
|
10,934
|
|
|
13,836
|
|
||
Maturing after five years through ten years
|
|
1,788
|
|
|
3,263
|
|
||
Maturing after ten years
|
|
—
|
|
|
52
|
|
||
Mortgage- and asset-backed securities
|
|
2,966
|
|
|
4,465
|
|
||
Total interest-bearing securities
|
|
$
|
31,670
|
|
|
$
|
41,169
|
|
|
|
Less than 12 months
|
|
12 months or more
|
||||||||||||
Type of security as of March 31, 2018
|
|
Fair value
|
|
Unrealized losses
|
|
Fair value
|
|
Unrealized losses
|
||||||||
U.S. Treasury securities
|
|
$
|
5,023
|
|
|
$
|
(103
|
)
|
|
$
|
53
|
|
|
$
|
(1
|
)
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
103
|
|
|
(2
|
)
|
|
26
|
|
|
(1
|
)
|
||||
Foreign and other
|
|
1,367
|
|
|
(39
|
)
|
|
88
|
|
|
(4
|
)
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
5,648
|
|
|
(128
|
)
|
|
325
|
|
|
(9
|
)
|
||||
Industrial
|
|
4,702
|
|
|
(117
|
)
|
|
397
|
|
|
(11
|
)
|
||||
Other
|
|
727
|
|
|
(18
|
)
|
|
93
|
|
|
(3
|
)
|
||||
Residential-mortgage-backed securities
|
|
1,464
|
|
|
(39
|
)
|
|
226
|
|
|
(7
|
)
|
||||
Other mortgage- and asset-backed securities
|
|
1,105
|
|
|
(22
|
)
|
|
162
|
|
|
(4
|
)
|
||||
Total
|
|
$
|
20,139
|
|
|
$
|
(468
|
)
|
|
$
|
1,370
|
|
|
$
|
(40
|
)
|
|
|
Less than 12 months
|
|
12 months or more
|
||||||||||||
Type of security as of December 31, 2017
|
|
Fair value
|
|
Unrealized losses
|
|
Fair value
|
|
Unrealized losses
|
||||||||
U.S. Treasury securities
|
|
$
|
7,728
|
|
|
$
|
(70
|
)
|
|
$
|
195
|
|
|
$
|
(2
|
)
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
188
|
|
|
(1
|
)
|
|
34
|
|
|
(1
|
)
|
||||
Foreign and other
|
|
1,163
|
|
|
(9
|
)
|
|
115
|
|
|
(2
|
)
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
5,928
|
|
|
(28
|
)
|
|
462
|
|
|
(6
|
)
|
||||
Industrial
|
|
5,760
|
|
|
(43
|
)
|
|
612
|
|
|
(9
|
)
|
||||
Other
|
|
868
|
|
|
(4
|
)
|
|
117
|
|
|
(2
|
)
|
||||
Residential-mortgage-backed securities
|
|
1,838
|
|
|
(24
|
)
|
|
276
|
|
|
(6
|
)
|
||||
Other mortgage- and asset-backed securities
|
|
1,777
|
|
|
(12
|
)
|
|
250
|
|
|
(3
|
)
|
||||
Total
|
|
$
|
25,250
|
|
|
$
|
(191
|
)
|
|
$
|
2,061
|
|
|
$
|
(31
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Raw materials
|
$
|
275
|
|
|
$
|
232
|
|
Work in process
|
1,627
|
|
|
1,668
|
|
||
Finished goods
|
1,050
|
|
|
934
|
|
||
Total inventories
|
$
|
2,952
|
|
|
$
|
2,834
|
|
|
Three months ended
March 31, 2018 |
||
Beginning balance
|
$
|
14,761
|
|
Addition from K-A acquisition
|
6
|
|
|
Currency translation adjustment
|
4
|
|
|
Ending balance
|
$
|
14,771
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Intangible
assets, net
|
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Intangible
assets, net
|
||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed-product-technology rights
|
$
|
12,609
|
|
|
$
|
(6,974
|
)
|
|
$
|
5,635
|
|
|
$
|
12,589
|
|
|
$
|
(6,796
|
)
|
|
$
|
5,793
|
|
Licensing rights
|
3,745
|
|
|
(1,699
|
)
|
|
2,046
|
|
|
3,275
|
|
|
(1,601
|
)
|
|
1,674
|
|
||||||
Marketing-related rights
|
1,316
|
|
|
(948
|
)
|
|
368
|
|
|
1,319
|
|
|
(920
|
)
|
|
399
|
|
||||||
R&D technology rights
|
1,177
|
|
|
(834
|
)
|
|
343
|
|
|
1,161
|
|
|
(804
|
)
|
|
357
|
|
||||||
Total finite-lived intangible assets
|
18,847
|
|
|
(10,455
|
)
|
|
8,392
|
|
|
18,344
|
|
|
(10,121
|
)
|
|
8,223
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-process research and development
|
387
|
|
|
—
|
|
|
387
|
|
|
386
|
|
|
—
|
|
|
386
|
|
||||||
Total other intangible assets
|
$
|
19,234
|
|
|
$
|
(10,455
|
)
|
|
$
|
8,779
|
|
|
$
|
18,730
|
|
|
$
|
(10,121
|
)
|
|
$
|
8,609
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
6.15% notes due 2018 (6.15% 2018 Notes)
|
$
|
500
|
|
|
$
|
500
|
|
4.375% €550 million notes due 2018 (4.375% 2018 euro Notes)
|
684
|
|
|
653
|
|
||
5.70% notes due 2019 (5.70% 2019 Notes)
|
1,000
|
|
|
1,000
|
|
||
1.90% notes due 2019 (1.90% 2019 Notes)
|
700
|
|
|
700
|
|
||
Floating Rate Notes due 2019
|
550
|
|
|
550
|
|
||
2.20% notes due 2019 (2.20% 2019 Notes)
|
1,400
|
|
|
1,400
|
|
||
2.125% €675 million notes due 2019 (2.125% 2019 euro Notes)
|
832
|
|
|
810
|
|
||
4.50% notes due 2020 (4.50% 2020 Notes)
|
300
|
|
|
300
|
|
||
2.125% notes due 2020 (2.125% 2020 Notes)
|
750
|
|
|
750
|
|
||
Floating Rate Notes due 2020
|
300
|
|
|
300
|
|
||
2.20% notes due 2020 (2.20% 2020 Notes)
|
700
|
|
|
700
|
|
||
3.45% notes due 2020 (3.45% 2020 Notes)
|
900
|
|
|
900
|
|
||
4.10% notes due 2021 (4.10% 2021 Notes)
|
1,000
|
|
|
1,000
|
|
||
1.85% notes due 2021 (1.85% 2021 Notes)
|
750
|
|
|
750
|
|
||
3.875% notes due 2021 (3.875% 2021 Notes)
|
1,750
|
|
|
1,750
|
|
||
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes)
|
1,541
|
|
|
1,501
|
|
||
2.70% notes due 2022 (2.70% 2022 Notes)
|
500
|
|
|
500
|
|
||
2.65% notes due 2022 (2.65% 2022 Notes)
|
1,500
|
|
|
1,500
|
|
||
3.625% notes due 2022 (3.625% 2022 Notes)
|
750
|
|
|
750
|
|
||
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)
|
734
|
|
|
719
|
|
||
2.25% notes due 2023 (2.25% 2023 Notes)
|
750
|
|
|
750
|
|
||
3.625% notes due 2024 (3.625% 2024 Notes)
|
1,400
|
|
|
1,400
|
|
||
3.125% notes due 2025 (3.125% 2025 Notes)
|
1,000
|
|
|
1,000
|
|
||
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)
|
924
|
|
|
901
|
|
||
2.60% notes due 2026 (2.60% 2026 Notes)
|
1,250
|
|
|
1,250
|
|
||
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)
|
666
|
|
|
642
|
|
||
3.20% notes due 2027 (3.20% 2027 Notes)
|
1,000
|
|
|
1,000
|
|
||
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)
|
981
|
|
|
946
|
|
||
6.375% notes due 2037 (6.375% 2037 Notes)
|
552
|
|
|
552
|
|
||
6.90% notes due 2038 (6.90% 2038 Notes)
|
291
|
|
|
291
|
|
||
6.40% notes due 2039 (6.40% 2039 Notes)
|
466
|
|
|
466
|
|
||
5.75% notes due 2040 (5.75% 2040 Notes)
|
412
|
|
|
412
|
|
||
4.95% notes due 2041 (4.95% 2041 Notes)
|
600
|
|
|
600
|
|
||
5.15% notes due 2041 (5.15% 2041 Notes)
|
974
|
|
|
974
|
|
||
5.65% notes due 2042 (5.65% 2042 Notes)
|
487
|
|
|
487
|
|
||
5.375% notes due 2043 (5.375% 2043 Notes)
|
261
|
|
|
261
|
|
||
4.40% notes due 2045 (4.40% 2045 Notes)
|
2,250
|
|
|
2,250
|
|
||
4.563% notes due 2048 (4.563% 2048 Notes)
|
1,415
|
|
|
1,415
|
|
||
4.663% notes due 2051 (4.663% 2051 Notes)
|
3,541
|
|
|
3,541
|
|
||
Other notes due 2097
|
100
|
|
|
100
|
|
||
Unamortized bond discounts, premiums and issuance costs, net
|
(920
|
)
|
|
(929
|
)
|
||
Total carrying value of debt
|
35,541
|
|
|
35,342
|
|
||
Less current portion
|
(2,183
|
)
|
|
(1,152
|
)
|
||
Total noncurrent debt
|
$
|
33,358
|
|
|
$
|
34,190
|
|
|
2018
|
|
2017
|
||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
||||||
First quarter
|
56.4
|
|
|
$
|
10,787
|
|
|
3.4
|
|
|
$
|
555
|
|
|
Foreign
currency
translation
|
|
Cash flow
hedges
|
|
Available-for-sale
securities
|
|
Other
|
|
AOCI
|
||||||||||
Balance as of December 31, 2017
|
$
|
(529
|
)
|
|
$
|
(6
|
)
|
|
$
|
(144
|
)
|
|
$
|
—
|
|
|
$
|
(679
|
)
|
Cumulative effect of change in accounting principle, net of tax
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Foreign currency translation adjustments
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Unrealized gains (losses)
|
—
|
|
|
149
|
|
|
(482
|
)
|
|
—
|
|
|
(333
|
)
|
|||||
Reclassification adjustments to income
|
—
|
|
|
(130
|
)
|
|
134
|
|
|
—
|
|
|
4
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||
Income taxes
|
—
|
|
|
(13
|
)
|
|
5
|
|
|
—
|
|
|
(8
|
)
|
|||||
Balance as of March 31, 2018
|
$
|
(500
|
)
|
|
$
|
—
|
|
|
$
|
(496
|
)
|
|
$
|
2
|
|
|
$
|
(994
|
)
|
|
|
Three months ended
March 31, |
|
|
||||||
Components of AOCI
|
|
2018
|
|
2017
|
|
Condensed Consolidated
Statements of Income location
|
||||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency contract (losses) gains
|
|
$
|
(34
|
)
|
|
$
|
57
|
|
|
Product sales
|
Cross-currency swap contract gains
|
|
164
|
|
|
74
|
|
|
Interest and other income, net
|
||
|
|
130
|
|
|
131
|
|
|
Income before income taxes
|
||
|
|
(28
|
)
|
|
(47
|
)
|
|
Provision for income taxes
|
||
|
|
$
|
102
|
|
|
$
|
84
|
|
|
Net income
|
Available-for-sale securities:
|
|
|
|
|
|
|
||||
Net realized losses
|
|
$
|
(134
|
)
|
|
$
|
(49
|
)
|
|
Interest and other income, net
|
|
|
1
|
|
|
—
|
|
|
Provision for income taxes
|
||
|
|
$
|
(133
|
)
|
|
$
|
(49
|
)
|
|
Net income
|
Level 1
|
—
|
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
|
Level 2
|
—
|
Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs
|
Level 3
|
—
|
Valuations based on inputs that are unobservable and significant to the overall fair value measurement
|
|
|
Quoted prices in
active markets for identical assets (Level 1) |
|
Significant
other observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
|
||||||||
|
|
|
|
|
|
|||||||||||
Fair value measurement as of March 31, 2018, using:
|
|
|
|
|
Total
|
|||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,103
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,103
|
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
||||
Foreign and other
|
|
—
|
|
|
1,674
|
|
|
—
|
|
|
1,674
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
—
|
|
|
6,053
|
|
|
—
|
|
|
6,053
|
|
||||
Industrial
|
|
—
|
|
|
5,565
|
|
|
—
|
|
|
5,565
|
|
||||
Other
|
|
—
|
|
|
896
|
|
|
—
|
|
|
896
|
|
||||
Residential-mortgage-backed securities
|
|
—
|
|
|
1,699
|
|
|
—
|
|
|
1,699
|
|
||||
Other mortgage- and asset-backed securities
|
|
—
|
|
|
1,267
|
|
|
—
|
|
|
1,267
|
|
||||
Money market mutual funds
|
|
9,234
|
|
|
—
|
|
|
—
|
|
|
9,234
|
|
||||
Other short-term interest-bearing securities
|
|
—
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||
Equity securities
|
|
155
|
|
|
—
|
|
|
—
|
|
|
155
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Cross-currency swap contracts
|
|
—
|
|
|
433
|
|
|
—
|
|
|
433
|
|
||||
Total assets
|
|
$
|
14,492
|
|
|
$
|
17,783
|
|
|
$
|
—
|
|
|
$
|
32,275
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
$
|
—
|
|
|
$
|
259
|
|
|
$
|
—
|
|
|
$
|
259
|
|
Cross-currency swap contracts
|
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
215
|
|
|
—
|
|
|
215
|
|
||||
Contingent consideration obligations in connection with business combinations
|
|
—
|
|
|
—
|
|
|
110
|
|
|
110
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
622
|
|
|
$
|
110
|
|
|
$
|
732
|
|
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant
other observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
|
||||||||
|
|
|
|
|
|
|||||||||||
Fair value measurement as of December 31, 2017, using:
|
|
|
|
|
Total
|
|||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
8,242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,242
|
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
—
|
|
|
223
|
|
|
—
|
|
|
223
|
|
||||
Foreign and other
|
|
—
|
|
|
2,422
|
|
|
—
|
|
|
2,422
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
—
|
|
|
10,072
|
|
|
—
|
|
|
10,072
|
|
||||
Industrial
|
|
—
|
|
|
9,670
|
|
|
—
|
|
|
9,670
|
|
||||
Other
|
|
—
|
|
|
1,390
|
|
|
—
|
|
|
1,390
|
|
||||
Residential-mortgage-backed securities
|
|
—
|
|
|
2,168
|
|
|
—
|
|
|
2,168
|
|
||||
Other mortgage- and asset-backed securities
|
|
—
|
|
|
2,297
|
|
|
—
|
|
|
2,297
|
|
||||
Money market mutual funds
|
|
3,245
|
|
|
—
|
|
|
—
|
|
|
3,245
|
|
||||
Other short-term interest-bearing securities
|
|
—
|
|
|
1,440
|
|
|
—
|
|
|
1,440
|
|
||||
Equity securities
|
|
149
|
|
|
—
|
|
|
—
|
|
|
149
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Cross-currency swap contracts
|
|
—
|
|
|
270
|
|
|
—
|
|
|
270
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Total assets
|
|
$
|
11,636
|
|
|
$
|
29,968
|
|
|
$
|
—
|
|
|
$
|
41,604
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
$
|
—
|
|
|
$
|
204
|
|
|
$
|
—
|
|
|
$
|
204
|
|
Cross-currency swap contracts
|
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Contingent consideration obligations in connection with business combinations
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
485
|
|
|
$
|
69
|
|
|
$
|
554
|
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Beginning balance
|
$
|
69
|
|
|
$
|
179
|
|
Addition from K-A acquisition
|
45
|
|
|
—
|
|
||
Net changes in valuations
|
(4
|
)
|
|
5
|
|
||
Ending balance
|
$
|
110
|
|
|
$
|
184
|
|
|
|
Foreign currency
|
|
U.S. dollars
|
||||||||||
Hedged notes
|
|
Notional amount
|
|
Interest rate
|
|
Notional amount
|
|
Interest rate
|
||||||
2.125% 2019 euro Notes
|
|
€
|
675
|
|
|
2.125
|
%
|
|
$
|
864
|
|
|
2.6
|
%
|
1.25% 2022 euro Notes
|
|
€
|
1,250
|
|
|
1.25
|
%
|
|
$
|
1,388
|
|
|
3.2
|
%
|
0.41% 2023 Swiss franc Bonds
|
|
CHF
|
700
|
|
|
0.41
|
%
|
|
$
|
704
|
|
|
3.4
|
%
|
2.00% 2026 euro Notes
|
|
€
|
750
|
|
|
2.00
|
%
|
|
$
|
833
|
|
|
3.9
|
%
|
5.50% 2026 pound sterling Notes
|
|
£
|
475
|
|
|
5.50
|
%
|
|
$
|
747
|
|
|
6.0
|
%
|
4.00% 2029 pound sterling Notes
|
|
£
|
700
|
|
|
4.00
|
%
|
|
$
|
1,111
|
|
|
4.5
|
%
|
|
|
Three months ended
March 31, |
||||||
Derivatives in cash flow hedging relationships
|
|
2018
|
|
2017
|
||||
Foreign currency contracts
|
|
$
|
(89
|
)
|
|
$
|
(47
|
)
|
Cross-currency swap contracts
|
|
238
|
|
|
64
|
|
||
Total unrealized gains
|
|
$
|
149
|
|
|
$
|
17
|
|
|
|
|
|
Three months ended
March 31, |
||||||
Derivatives in cash flow hedging relationships
|
|
Condensed Consolidated
Statements of Income location
|
|
2018
|
|
2017
|
||||
Foreign currency contracts
|
|
Product sales
|
|
$
|
(34
|
)
|
|
$
|
57
|
|
Cross-currency swap contracts
|
|
Interest and other income, net
|
|
164
|
|
|
74
|
|
||
Total realized gains
|
|
|
|
$
|
130
|
|
|
$
|
131
|
|
|
|
Three months ended
March 31, |
||||||
Derivatives in fair value hedging relationships
|
|
2018
|
|
2017
|
||||
Net unrealized losses recognized for interest rate swap contracts
|
|
$
|
(164
|
)
|
|
$
|
(19
|
)
|
Net unrealized gains recognized for related hedged debt
|
|
$
|
164
|
|
|
$
|
19
|
|
|
|
|
|
Three months ended
March 31, |
||||||
Derivatives not designated as hedging instruments
|
|
Condensed Consolidated
Statements of Income location
|
|
2018
|
|
2017
|
||||
Foreign currency contracts
|
|
Interest and other income, net
|
|
$
|
7
|
|
|
$
|
1
|
|
|
|
Derivative assets
|
|
Derivative liabilities
|
||||||||
March 31, 2018
|
|
Condensed Consolidated
Balance Sheet location
|
|
Fair value
|
|
Condensed Consolidated
Balance Sheet location |
|
Fair value
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
Other current assets/ Other assets
|
|
$
|
17
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
$
|
259
|
|
Cross-currency swap contracts
|
|
Other current assets/ Other assets
|
|
433
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
148
|
|
||
Interest rate swap contracts
|
|
Other current assets/ Other assets
|
|
—
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
215
|
|
||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
450
|
|
|
|
|
$
|
622
|
|
|
|
Derivative assets
|
|
Derivative liabilities
|
||||||||
December 31, 2017
|
|
Condensed Consolidated
Balance Sheet location
|
|
Fair value
|
|
Condensed Consolidated
Balance Sheet location |
|
Fair value
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
Other current assets/ Other assets
|
|
$
|
6
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
$
|
204
|
|
Cross-currency swap contracts
|
|
Other current assets/ Other assets
|
|
270
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
220
|
|
||
Interest rate swap contracts
|
|
Other current assets/ Other assets
|
|
10
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
61
|
|
||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
286
|
|
|
|
|
$
|
485
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
In March 2018, we announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion to include a new indication in the Repatha
®
label for adults with established atherosclerotic cardiovascular disease to reduce cardiovascular risk by lowering low-density lipoprotein cholesterol levels. The recommended label recognizes the findings from the Repatha
®
cardiovascular outcomes study, FOURIER (Further Cardiovascular OUtcomes Research with Proprotein Convertase Subtilisin/Kexin Type 9 (PCSK9) Inhibition in Subjects with Elevated Risk).
|
•
|
In March 2018, we announced that the FDA approved under accelerated approval the supplemental Biologics License Application for BLINCYTO
®
for the treatment of adults and children with B-cell precursor acute lymphoblastic leukemia in first or second complete remission with minimal residual disease greater than or equal to 0.1 percent.
|
•
|
In February 2018, we announced that the CHMP of the EMA issued a positive opinion recommending a label variation for Neulasta
®
to include the
Neulasta
®
Onpro
®
kit.
|
•
|
In April 2018, we announced that the European Commission approved an expanded indication for XGEVA
®
for the prevention of skeletal-related events in patients with multiple myeloma.
|
•
|
In March 2018, we announced that the CHMP of the EMA adopted a positive opinion for the Marketing Authorization Application of KANJINTI
™
, a biosimilar candidate to Herceptin
®
(trastuzumab). KANJINTI
™
has been recommended for approval for the treatment of the same three types of cancer as Herceptin
®
is approved for in the European Union, including HER2-positive metastatic breast cancer, HER2-positive early breast cancer and HER2-positive metastatic adenocarcinoma of the stomach or gastroesophageal junction. KANJINTI
™
is being developed in collaboration with Allergan plc.
|
•
|
In April 2018, we announced plans to build a new next-generation biomanufacturing plant on our campus in West Greenwich, Rhode Island. The new plant will employ our next-generation biomanufacturing capabilities and manufacture products for the U.S. and global markets.
|
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
|||||
Product sales
|
|
|
|
|
|
|||||
U.S.
|
$
|
4,147
|
|
|
$
|
4,095
|
|
|
1
|
%
|
ROW
|
1,196
|
|
|
1,104
|
|
|
8
|
%
|
||
Total product sales
|
5,343
|
|
|
5,199
|
|
|
3
|
%
|
||
Other revenues
|
211
|
|
|
265
|
|
|
(20
|
)%
|
||
Total revenues
|
$
|
5,554
|
|
|
$
|
5,464
|
|
|
2
|
%
|
Operating expenses
|
$
|
2,828
|
|
|
$
|
2,873
|
|
|
(2
|
)%
|
Operating income
|
$
|
2,726
|
|
|
$
|
2,591
|
|
|
5
|
%
|
Net income
|
$
|
2,311
|
|
|
$
|
2,071
|
|
|
12
|
%
|
Diluted EPS
|
$
|
3.25
|
|
|
$
|
2.79
|
|
|
16
|
%
|
Diluted shares
|
711
|
|
|
741
|
|
|
(4
|
)%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
ENBREL — U.S.
|
$
|
1,050
|
|
|
$
|
1,118
|
|
|
(6
|
)%
|
ENBREL — Canada
|
55
|
|
|
63
|
|
|
(13
|
)%
|
||
Total ENBREL
|
$
|
1,105
|
|
|
$
|
1,181
|
|
|
(6
|
)%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
Sensipar
®
— U.S.
|
$
|
409
|
|
|
$
|
337
|
|
|
21
|
%
|
Sensipar
®
/Mimpara
®
— ROW
|
88
|
|
|
84
|
|
|
5
|
%
|
||
Total Sensipar
®
/Mimpara
®
|
$
|
497
|
|
|
$
|
421
|
|
|
18
|
%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
Prolia
®
— U.S.
|
$
|
320
|
|
|
$
|
279
|
|
|
15
|
%
|
Prolia
®
— ROW
|
174
|
|
|
146
|
|
|
19
|
%
|
||
Total Prolia
®
|
$
|
494
|
|
|
$
|
425
|
|
|
16
|
%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
XGEVA
®
— U.S.
|
$
|
332
|
|
|
$
|
298
|
|
|
11
|
%
|
XGEVA
®
— ROW
|
113
|
|
|
104
|
|
|
9
|
%
|
||
Total XGEVA
®
|
$
|
445
|
|
|
$
|
402
|
|
|
11
|
%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
EPOGEN
®
— U.S.
|
$
|
244
|
|
|
$
|
270
|
|
|
(10
|
)%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
KYPROLIS
®
— U.S.
|
$
|
137
|
|
|
$
|
137
|
|
|
—
|
%
|
KYPROLIS
®
— ROW
|
85
|
|
|
53
|
|
|
60
|
%
|
||
Nplate
®
— U.S.
|
112
|
|
|
97
|
|
|
15
|
%
|
||
Nplate
®
— ROW
|
67
|
|
|
57
|
|
|
18
|
%
|
||
Vectibix
®
— U.S.
|
75
|
|
|
61
|
|
|
23
|
%
|
||
Vectibix
®
— ROW
|
94
|
|
|
86
|
|
|
9
|
%
|
||
Repatha
®
— U.S.
|
84
|
|
|
33
|
|
|
*
|
|
||
Repatha
®
— ROW
|
39
|
|
|
16
|
|
|
*
|
|
||
NEUPOGEN
®
— U.S.
|
65
|
|
|
101
|
|
|
(36
|
)%
|
||
NEUPOGEN
®
— ROW
|
38
|
|
|
47
|
|
|
(19
|
)%
|
||
BLINCYTO
®
— U.S.
|
30
|
|
|
23
|
|
|
30
|
%
|
||
BLINCYTO
®
— ROW
|
19
|
|
|
11
|
|
|
73
|
%
|
||
Parsabiv
TM
— U.S.
|
36
|
|
|
—
|
|
|
*
|
|
||
Parsabiv
TM
— ROW
|
5
|
|
|
—
|
|
|
*
|
|
||
Other — U.S.
|
19
|
|
|
15
|
|
|
27
|
%
|
||
Other — ROW
|
44
|
|
|
42
|
|
|
5
|
%
|
||
Total other products
|
$
|
949
|
|
|
$
|
779
|
|
|
22
|
%
|
Total U.S. — other products
|
$
|
558
|
|
|
$
|
467
|
|
|
19
|
%
|
Total ROW — other products
|
391
|
|
|
312
|
|
|
25
|
%
|
||
Total other products
|
$
|
949
|
|
|
$
|
779
|
|
|
22
|
%
|
|
Three months ended
March 31, |
|
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||||
Operating expenses:
|
|
|
|
|
|
|||||
Cost of sales
|
$
|
944
|
|
|
$
|
996
|
|
|
(5
|
)%
|
% of product sales
|
17.7
|
%
|
|
19.2
|
%
|
|
|
|||
% of total revenues
|
17.0
|
%
|
|
18.2
|
%
|
|
|
|||
Research and development
|
$
|
760
|
|
|
$
|
769
|
|
|
(1
|
)%
|
% of product sales
|
14.2
|
%
|
|
14.8
|
%
|
|
|
|||
% of total revenues
|
13.7
|
%
|
|
14.1
|
%
|
|
|
|||
Selling, general and administrative
|
$
|
1,127
|
|
|
$
|
1,064
|
|
|
6
|
%
|
% of product sales
|
21.1
|
%
|
|
20.5
|
%
|
|
|
|||
% of total revenues
|
20.3
|
%
|
|
19.5
|
%
|
|
|
|||
Other
|
$
|
(3
|
)
|
|
$
|
44
|
|
|
*
|
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Interest expense, net
|
$
|
338
|
|
|
$
|
326
|
|
Interest and other income, net
|
$
|
231
|
|
|
$
|
195
|
|
Provision for income taxes
|
$
|
308
|
|
|
$
|
389
|
|
Effective tax rate
|
11.8
|
%
|
|
15.8
|
%
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Cash, cash equivalents and marketable securities
|
$
|
32,172
|
|
|
$
|
41,678
|
|
Total assets
|
$
|
71,164
|
|
|
$
|
79,954
|
|
Current portion of long-term debt
|
$
|
2,183
|
|
|
$
|
1,152
|
|
Long-term debt
|
$
|
33,358
|
|
|
$
|
34,190
|
|
Stockholders’ equity
|
$
|
15,620
|
|
|
$
|
25,241
|
|
|
Three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
2,727
|
|
|
$
|
2,385
|
|
Net cash provided by (used in) investing activities
|
$
|
14,906
|
|
|
$
|
(157
|
)
|
Net cash used in financing activities
|
$
|
(11,692
|
)
|
|
$
|
(2,111
|
)
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
Total number
of shares
purchased
|
|
Average
price paid
per share
|
|
Total number
of shares purchased
as part of publicly announced program
|
|
Maximum dollar
value that may
yet be purchased
under the program
(1)
|
||||||
January 1 - 31
|
1,242,000
|
|
|
$
|
185.75
|
|
|
1,242,000
|
|
|
$
|
14,139,104,402
|
|
February 1 - 28
|
542,890
|
|
|
$
|
188.11
|
|
|
542,890
|
|
|
$
|
14,036,979,617
|
|
March 1 - 31
|
54,616,133
|
|
|
$
|
191.42
|
|
|
54,616,133
|
|
|
$
|
3,582,419,801
|
|
|
56,401,023
|
|
|
$
|
191.26
|
|
|
56,401,023
|
|
|
|
(1)
|
In January 2018, our Board of Directors authorized an increase of $10.0 billion available under our stock repurchase program. Repurchase activity for the three months ended March 31, 2018, included 52.1 million shares of our common stock acquired under a tender offer at an aggregate cost of $10.0 billion. As of March 31, 2018, $3.6 billion remained available under our stock repurchase program. In April 2018, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $5.0 billion.
|
Item 6.
|
EXHIBITS
|
|
|
Amgen Inc.
|
||
|
|
(Registrant)
|
||
|
|
|
|
|
Date:
|
April 24, 2018
|
By:
|
|
/
S
/ DAVID W. MELINE
|
|
|
|
|
David W. Meline
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation of Amgen Inc.
(As Restated March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Amgen Inc.
(As Amended and Restated February 15, 2016.) (Filed as an exhibit to Form 8-K on February 17, 2016 and incorporated herein by reference.)
|
|
|
|
4.1
|
|
Form of stock certificate for the common stock, par value $.0001 of the Company.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 14, 1997 and incorporated herein by reference.)
|
|
|
|
4.2
|
|
Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.)
|
|
|
|
4.3
|
|
Agreement of Resignation, Appointment and Acceptance dated February 15, 2008.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.)
|
|
|
|
4.4
|
|
First Supplemental Indenture, dated February 26, 1997.
(Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.)
|
|
|
|
4.5
|
|
8-1/8% Debentures due April 1, 2097.
(Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
|
|
|
|
4.6
|
|
Officer’s Certificate of Amgen Inc., dated April 8, 1997, establishing a series of securities entitled “8 1/8% Debentures due April 1, 2097.”
(Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
|
|
|
|
4.7
|
|
Indenture, dated August 4, 2003.
(Filed as an exhibit to Form S-3 Registration Statement on August 4, 2003 and incorporated herein by reference.)
|
|
|
|
4.8
|
|
Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as Nominee of The Depository Trust Company, and Citibank, N.A., as Paying Agent.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1998 on May 13, 1998 and incorporated herein by reference.)
|
|
|
|
4.9
|
|
Officers’ Certificate of Amgen Inc., dated May 30, 2007, including forms of the Company’s Senior Floating Rate Notes due 2008, 5.85% Senior Notes due 2017 and 6.375% Senior Notes due 2037.
(Filed as an exhibit to Form 8-K on May 30, 2007 and incorporated herein by reference.)
|
|
|
|
4.10
|
|
Officers’ Certificate of Amgen Inc., dated May 23, 2008, including forms of the Company’s 6.15% Senior Notes due 2018 and 6.90% Senior Notes due 2038.
(Filed as exhibit to Form 8-K on May 23, 2008 and incorporated herein by reference.)
|
|
|
|
4.11
|
|
Officers’ Certificate of Amgen Inc., dated January 16, 2009, including forms of the Company’s 5.70% Senior Notes due 2019 and 6.40% Senior Notes due 2039.
(Filed as exhibit to Form 8-K on January 16, 2009 and incorporated herein by reference.)
|
|
|
|
4.12
|
|
Officers’ Certificate of Amgen Inc., dated March 12, 2010, including forms of the Company’s 4.50% Senior Notes due 2020 and 5.75% Senior Notes due 2040.
(Filed as exhibit to Form 8-K on March 12, 2010 and incorporated herein by reference.)
|
|
|
|
4.13
|
|
Officers’ Certificate of Amgen Inc., dated September 16, 2010, including forms of the Company’s 3.45% Senior Notes due 2020 and 4.95% Senior Notes due 2041.
(Filed as an exhibit to Form 8-K on September 17, 2010 and incorporated herein by reference.)
|
|
|
|
4.14
|
|
Officers’ Certificate of Amgen Inc., dated June 30, 2011, including forms of the Company’s 2.30% Senior Notes due 2016, 4.10% Senior Notes due 2021 and 5.65% Senior Notes due 2042.
(Filed as an exhibit to Form 8-K on June 30, 2011 and incorporated herein by reference.)
|
|
|
|
4.15
|
|
Officers’ Certificate of Amgen Inc., dated November 10, 2011, including forms of the Company’s 1.875% Senior Notes due 2014, 2.50% Senior Notes due 2016, 3.875% Senior Notes due 2021 and 5.15% Senior Notes due 2041.
(Filed as an exhibit to Form 8-K on November 10, 2011 and incorporated herein by reference.)
|
|
|
|
4.16
|
|
Officers’ Certificate of Amgen Inc., dated December 5, 2011, including forms of the Company’s 4.375% Senior Notes due 2018 and 5.50% Senior Notes due 2026.
(Filed as an exhibit to Form 8-K on December 5, 2011 and incorporated herein by reference.)
|
|
|
|
Exhibit No.
|
|
Description
|
10.5+
|
|
Form of Restricted Stock Unit Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on December 12, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.6+
|
|
Amgen Inc. 2009 Performance Award Program. (As Amended on December 31, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2017 and incorporated herein by reference.)
|
|
|
|
10.7+
|
|
Form of Performance Unit Agreement for the Amgen Inc. 2009 Performance Award Program. (As Amended on December 12, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.8+
|
|
Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on October 24, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.9+
|
|
Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc. 2009 Director Equity Incentive Program.
(Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.)
|
|
|
|
10.10+
|
|
Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on October 24, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.11+
|
|
Form of Cash-Settled Restricted Stock Unit Agreement for the Amgen 2009 Director Equity Incentive Program.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.12+
|
|
Amgen Inc. Supplemental Retirement Plan. (As Amended and Restated effective October 16, 2013.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
|
|
|
|
10.13+
|
|
First Amendment to the Amgen Inc. Supplemental Retirement Plan, effective October 14, 2016.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)
|
|
|
|
10.14+
|
|
Amended and Restated Amgen Change of Control Severance Plan. (As Amended and Restated effective December 9, 2010 and subsequently amended effective March 2, 2011.)
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 on May 10, 2011 and incorporated herein by reference.)
|
|
|
|
10.15+
|
|
Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, 2009.)
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.)
|
|
|
|
10.16+
|
|
First Amendment to the Amgen Inc. Executive Incentive Plan, effective December 13, 2012
. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)
|
|
|
|
10.17+
|
|
Second Amendment to the Amgen Inc. Executive Incentive Plan, effective January 1, 2017.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)
|
|
|
|
10.18+
|
|
Amgen Nonqualified Deferred Compensation Plan. (As Amended and Restated effective October 16, 2013.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
|
|
|
|
10.19+
|
|
First Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective October 14, 2016.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)
|
|
|
|
10.20+
|
|
Agreement between Amgen Inc. and David W. Meline, effective July 21, 2014.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2014 on October 29, 2014 and incorporated herein by reference.)
|
|
|
|
10.21+
|
|
Agreement between Amgen Inc. and Jonathan Graham, dated May 11, 2015.
(Filed as an exhibit to Form 10-Q/A for the quarter ended June 30, 2015 on August 6, 2015 and incorporated herein by reference.)
|
|
|
|
10.22+
|
|
Agreement between Amgen Inc. and Lori Johnston, dated October 25, 2016.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)
|
|
|
|
10.23
|
|
Amended and Restated Credit Agreement, dated July 30, 2014, among Amgen Inc., the Banks therein named, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent (the “Credit Agreement”)
. (Filed as an exhibit to Form 8-K on July 30, 2014 and incorporated herein by reference.)
|
|
|
|
Exhibit No.
|
|
Description
|
10.24*
|
|
|
|
|
|
10.25
|
|
Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No. 1, effective June 9, 2003, to Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment).
(Filed as an exhibit to Form 10-K/A for the year ended December 31, 2012 on July 31, 2013 and incorporated herein by reference.)
|
|
|
|
10.26
|
|
Amendment No. 2 to Collaboration and License Agreement, effective November 14, 2016, between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment).
(Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)
|
|
|
|
10.27
|
|
Collaboration Agreement, dated April 22, 1994, by and between Bayer Corporation (formerly Miles, Inc.) and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 by Onyx Pharmaceuticals, Inc. on May 10, 2011 and incorporated herein by reference.)
|
|
|
|
10.28
|
|
Amendment to Collaboration Agreement, dated April 24, 1996, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
|
|
|
|
10.29
|
|
Amendment to Collaboration Agreement, dated February 1, 1999, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
|
|
|
|
10.30
|
|
Settlement Agreement and Release, dated October 11, 2011, by and between Bayer Corporation, Bayer AG, Bayer HealthCare LLC and Bayer Pharma AG and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
|
|
|
|
10.31
|
|
Fourth Amendment to Collaboration Agreement, dated October 11, 2011, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
|
|
|
|
10.32
|
|
Side Letter Regarding Collaboration Agreement, dated May 29, 2015, by and between Bayer HealthCare LLC and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2015 on August 5, 2015 and incorporated herein by reference.)
|
|
|
|
10.33
|
|
Sourcing and Supply Agreement, dated January 6, 2017, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Inc.
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)
|
|
|
|
10.34
|
|
Exclusive License and Collaboration Agreement, dated August 28, 2015, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.35
|
|
Amendment No. 1 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.36
|
|
Amendment No. 2 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.37
|
|
Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.38*
|
|
|
|
|
|
31*
|
|
Exhibit No.
|
|
Description
|
|
|
|
32**
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
1.
|
DEFINITIONS
|
2.
|
AMENDMENTS
|
2.1
|
Section 8.2.1 of the Agreement is deleted in its entirety and replaced with the following:
|
3.
|
INTEGRATION
|
4.
|
APPLICABLE LAW & JURISDICTION
|
5.
|
COUNTERPARTS
|
NOVARTIS PHARMA AG
By:
/s/ Kellie Crawford
Name: Kellie Crawford
Title: Head Finance, Global BD&L and M&A
Date: April 9, 2018
|
AMGEN INC.
By: /s/ Robert A. Bradway
Name: Robert A. Bradway
Title: Chairman of the Board, President & CEO
Date: March 20, 2018
|
By: /s/ Gregor von Arx
Name: Gregor von Arx
Title: Global Head Legal Neuroscience & Established Medicines
Date: April 9, 2018
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Amgen Inc.;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
|
(d)
|
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 24, 2018
|
/s/ ROBERT A. BRADWAY
|
|
Robert A. Bradway
|
|
Chairman of the Board,
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Amgen Inc.;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
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(d)
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Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: April 24, 2018
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/s/ DAVID W. MELINE
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David W. Meline
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Executive Vice President and Chief Financial Officer
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(i)
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the accompanying Quarterly Report on Form 10-Q of the Company for the period ended
March 31, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(ii)
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information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: April 24, 2018
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/s/ ROBERT A. BRADWAY
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Robert A. Bradway
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Chairman of the Board,
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Chief Executive Officer and President
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(i)
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the accompanying Quarterly Report on Form 10-Q of the Company for the period ended
March 31, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(ii)
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information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: April 24, 2018
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/s/ DAVID W. MELINE
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David W. Meline
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Executive Vice President and Chief Financial Officer
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