Amgen 2004 Annual Report Download - page 35

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Reconciliation of GAAP earnings per share
to “Adjusted” earnings per share (unaudited)
(1) To exclude the non-cash expense associated with writing off the acquired in-process
research and development (“IPR&D”) related to the Tularik acquisition.
(2) To exclude the ongoing, non-cash amortization of acquired intangible assets,
primarily ENBREL®, related to the Immunex acquisition.
(3) To exclude the incremental compensation provided to certain Tularik employees
principally related to non-cash compensation expense associated with stock options
assumed in connection with the acquisition and amounts payable under the Tularik
short-term retention plan.
(4) To exclude the incremental compensation payable to certain Immunex employees
principally under the Immunex short-term retention plan.
(5) To exclude the impact of our share of the third-party reimbursement received
by Kirin-Amgen, Inc. (“KA”) related to the Genentech, Inc. (“Genentech”) legal
settlement (see (8) below).
(6) To exclude a benefi t for the recovery of costs and expenses associated with a legal
award related to an arbitration proceeding with Johnson & Johnson.
(7) To exclude a cash contribution to the Amgen Foundation.
(8) To exclude the impact of a legal settlement paid to Genentech in connection with
settling a patent litigation matter relating to our processes for producing NEUPOGEN®
and Neulasta®. Pursuant to the terms of a license agreement between us and KA, an
entity 50% owned by us, KA was obligated to indemnify us for the payment made to
Genentech. We account for our ownership interest in KA under the equity method
and, accordingly, recorded our share of such loss incurred by KA.
(9) To r e fl ect the tax effect of the above adjustments, except for the write-off of
acquired IPR&D.
Year ended December 31, 2004 2003
GAAP earnings per share $1.81 $1.69
Adjustments to GAAP earnings per share:
Write-off of acquired in-process
research and development 0.42 (1) —
Amortization of acquired intangible assets 0.25 (2) 0.25
(2)
Other merger-related expenses 0.04 (3) (4) 0.05
(4)
Legal awards and cost recoveries (0.01)(5) (0.05)
(6)
Amgen Foundation contribution — 0.04 (7)
Legal settlement — 0.03
(8)
Tax effects of the above adjustments (0.11)(9) (0.11)
(9)
“Adjusted” earnings per share $2.40 $1.90
Amgen 2004 Annual Report page 33