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cc4a6ac5b5ef33bf180399c193da2be1b31e89a8366700613f84de8a7dcbe2d1

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3176309d26be7853ddd114ee219b2fa5e81cceefab021edd117211fc7eb8f34d

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91a0df123b4a101d21f6e0e9715619495e377084e597eee07e47828a794525da

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4cb8f7f5ca5253392a7ced0bd55cb387eab72c2adcaa5684db21dbd7746367de

3337d0c4df17687602f7e4eecac85d4686b4e512ebebde0e1831b8fb200d1f91

The dramatic surge in operating cash flow in Q4 2024 resulted from a combination of factors. **Higher Net Income** adjusted for noncash items contributed to the increase in cash, while the **timing of working capital items** (particularly higher collections) provided additional cash inflows. Moreover, the absence of significant **transaction expenses** associated with the previous quarter’s acquisition activities, along with **overall improved business performance**, further bolstered the operating cash flow in Q4 2024.  **[0000318154-25-000010_amgn-20241231.htm:126]** **[0000318154-25-000005_amgn-20241231earningsrelea.htm:7]** 

Why did operating cash flow surge so dramatically in Q4 2024?

The pronounced turnaround in Q4 2024 was driven by several key factors. **First**, there was a significant increase in **net cash provided by operating activities** reaching **$4,771 million** compared to **$538 million** in Q4 2023, reflecting improved business performance, the timing of tax payments, and better working capital management. **Second**, there was a drastic reduction in cash outflows in investing activities—from **$(27,089) million** in Q4 2023 down to **$(402) million** in Q4 2024—primarily due to less spending on acquisitions. **Lastly**, the shift in financing activities, where Q4 2023 saw a cash inflow of **$2,754 million** compared to a cash outflow of **$(1,407) million** in Q4 2024, further contributed to this turnaround.  **[0000318154-25-000005_amgn-20241231earningsrelea.htm:22]** **[0000318154-25-000005_amgn-20241231earningsrelea.htm:7]** 

What caused the pronounced turnaround in cash and cash equivalents in Q4 2024?

Amgen’s debt repayment nearly tripled in Q3 2024 because the company took significant strategic financial management actions. These actions included repaying major portions of its outstanding debt—specifically, a **$2.0 billion** repayment on a Term loan due in April 2025, a **$200 million** repayment on a Term loan due in October 2026, and a **$1.4 billion** repayment on its 3.625% 2024 Notes—as well as repurchasing **$875 million** of its debt, actions that contributed to a **$4.5 billion** reduction in overall outstanding debt year-to-date.  **[0000318154-24-000044_amgn-20240930.htm:17]** **[0000318154-24-000044_amgn-20240930.htm:47]** **[0000318154-24-000042_amgn-20240930earningsrelea.htm:3]** 

Why did debt repayment nearly triple in Q3 2024?

The significant swing in FY 2024 was driven by several factors. **First**, there was a shift in debt management: while FY 2023 benefited from large-scale debt issuances totaling **$27.8 billion** tied to the Horizon acquisition, FY 2024 focused on redeeming debt, including a repayment of **$3.6 billion** and extinguishment of **$659 million**.  **[0000318154-25-000010_amgn-20241231.htm:126]** **[0000318154-25-000010_amgn-20241231.htm:172]**  **Second**, dividend payments saw a slight increase from **$4.6 billion** in FY 2023 to **$4.8 billion** in FY 2024.  **[0000318154-25-000010_amgn-20241231.htm:126]** **[0000318154-25-000010_amgn-20241231.htm:172]**  **Lastly**, unlike FY 2023, FY 2024 included share repurchases of **$200 million**.  **[0000318154-25-000005_amgn-20241231earningsrelea.htm:7]**  These actions collectively resulted in a net cash outflow from financing activities in FY 2024.

What factors led to the significant swing in financing activities in FY 2024?

b4bbc2a3bbacf9cd88ad2acb86d86f8934831b0b1ded151a88de4ccd022613cd

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98132dc83045c65612472e9abfbd19fc0cc5de658c9806b31b57ea975d59e41c

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1b549e7826f911f464b493d77c5bfda90e5597338f255f40ae22c8ecb473e8ba

Amgen’s **Q1 2024 operating income** was considerably lower at **$991 million** due to several factors. The decline was driven by **significantly higher operating expenses** across the board, including a **54% increase in total operating expenses**. Key cost drivers were the **higher cost of sales** from increased amortization and acquisition-related expenses linked to the **Horizon Therapeutics acquisition**, as well as higher **research and development (R&D)** and **selling, general, and administrative (SG&A) expenses**. Additionally, a **mark-to-market loss on their BeiGene equity investment** further contributed to diminishing the operating income and compressing the operating margin from **32.9% in Q1 2023** to **13.9% in Q1 2024**.  **[20240502LA03959:14]** **[20240502LA03959:0]** **[0000318154-24-000020_amgn-20240331.htm:28]** 

Why was Operating Income so low in Q1 2024?

Amgen’s **drastic drop in net income in Q1 2024** was primarily due to several factors. First, the company recorded a **mark-to-market loss on its BeiGene equity investment**.  **[20240502LA03959:0]** **[0000318154-24-000018_amgn-20240331earningsrelea.htm:0]**  Additionally, **operating expenses increased significantly** due to higher amortization expenses from the Horizon Therapeutics acquisition and additional costs related to its integration.  **[20240502LA03959:0]** **[0000318154-24-000018_amgn-20240331earningsrelea.htm:0]** **[0000318154-24-000020_amgn-20240331.htm:28]**  Further, the company incurred **higher interest expenses** because of debt associated with the Horizon acquisition.  **[20240502LA03959:0]** **[0000318154-24-000018_amgn-20240331earningsrelea.htm:14]**  A **one-time $800 million tax deposit** also adversely affected free cash flow, while increased costs in sales and selling, general, and administrative areas contributed to the decline.  **[20240502LA03959:0]** **[0000318154-24-000020_amgn-20240331.htm:28]** 

What caused the drastic drop in Net Income in Q1 2024?

EPS fell dramatically in Q1 2024 due to several factors. The **basic EPS** dropped from **$5.32 in Q1 2023** to **$(0.21)** in Q1 2024 primarily because of a **mark-to-market loss on the BeiGene equity investment** which had a negative impact on GAAP results, combined with **increased operating expenses** related to higher amortization and incremental costs from the Horizon acquisition. Additionally, a **substantial increase in the cost of sales** and **higher interest expenses**—partly due to financing for the Horizon acquisition—further contributed to the drop, along with a notable change in the tax impact. These elements collectively led to a significant decline in EPS.  **[20240502LA03959:0]** **[0000318154-24-000018_amgn-20240331earningsrelea.htm:0]** **[20240502LA03959:14]** **[AMGN_3382225_11]** **[0000318154-24-000018_amgn-20240331earningsrelea.htm:15]** 

Why did EPS fall so dramatically in Q1 2024?

The swing in **Other Income (Expense)** in Q1 2024 was primarily due to **unrealized losses on strategic equity investments**, particularly in **BeiGene** and **Neumora**. In the preceding period, Amgen recorded **unrealized gains** on these investments, notably from the BeiGene investment, when it was accounted for using the equity method. The shift to recording the investment at fair value—with changes in fair value recognized in earnings—led to the observed losses in Q1 2024.  **[0000318154-24-000020_amgn-20240331.htm:33]** 

What led to the swing in Other Income (Expense) in Q1 2024?

The **Cost of Sales nearly doubled in Q1 2024** mainly due to several factors. **Higher amortization expenses** from the assets acquired in the Horizon Therapeutics acquisition significantly increased costs. Additionally, **higher profit share and royalty expenses** further contributed to the rise, although these were partially offset by a benefit from the Puerto Rico excise tax. Finally, **acquisition-related costs** from the Horizon Therapeutics acquisition added incremental expenses, collectively driving up the overall Cost of Sales substantially.  **[0000318154-24-000018_amgn-20240331earningsrelea.htm:13]** **[20240502LA03959:14]** **[20240502LA03959:3]** **[0000318154-24-000018_amgn-20240331earningsrelea.htm:3]** 

Why did Cost of Sales nearly double in Q1 2024?

5a36ad82cb2cb87d513b5bee427e45c981712bfe77f275d28e052727a84047a8

The **cash and cash equivalents** jumped in Q4 2024 because Amgen saw a significant increase due to several factors. **Operating activities** generated a strong net cash inflow of **$4,771 million**, driven by improved business performance and more favorable timing of tax payments and working capital collections. At the same time, **investing activities** used much less cash—only **$402 million** compared to a drastic **$27,089 million** the prior year, largely due to the absence of non-recurring acquisition expenses. Additionally, **financing activities** resulted in a lower cash outflow of **$1,407 million**, reflecting reduced financing needs and no new debt issuances during the quarter.  **[0000318154-25-000005_amgn-20241231earningsrelea.htm:22]** **[0000318154-25-000010_amgn-20241231.htm:122]** **[20250204LA10984:18]** 

Why did Cash and Cash Equivalents jump in Q4 2024?

Amgen’s **total assets** decreased from **$97,154 million** at the end of 2023 to **$91,839 million** at the end of 2024. The decline was primarily driven by a **decrease in intangible assets**—from **$32,641 million** to **$27,699 million**—which could be due to factors such as amortization or impairment possibly related to the Horizon acquisition. In addition, **inventories** dropped from **$9,518 million** to **$6,998 million** and **trade receivables** fell from **$7,268 million** to **$6,782 million**, suggesting adjustments in production, sales strategies, or improvements in collection processes.  **[0000318154-25-000005_amgn-20241231earningsrelea.htm:18]** **[0000318154-25-000010_amgn-20241231.htm:170]** **[0000318154-25-000010_amgn-20241231.htm:122]** 

What led to the decrease in Total Assets by FY 2024?

The spike in the **Current Portion of Long-Term Debt** in Q2 2024 was primarily caused by the **repayment of the 3.625% 2024 Notes**. This repayment led to a significant change in the company's debt structure, including the reduction of the **aggregate notional amount of interest rate swap contracts** from **$6.7 billion** at the end of 2023 to **$5.3 billion** as of June 30, 2024.  **[0000318154-24-000033_amgn-20240630earningsrelea.htm:13]** **[0000318154-24-000035_amgn-20240630.htm:25]** **[0000318154-24-000035_amgn-20240630.htm:42]** 

Amgen Inc (AMGN)

Financials