Amgen Appendices

Cost of Equity (Ke = Rf + B*MRP)	7.11%
Risk Free Rate (Rf - 10-Yr Teasury)	2.91%
Market Risk Premium (MRP)	7.00%
Beta (B - from Valueline)	0.6
Cost of Debt (Kd = YTM*(1-TR))	4.66%
Tax Rate (TR)	20%
Yield for 'A' rated bond (YTM - from Yahoo as of 4/6/09)	5.83%
Market value of Equity (E = p*nbr)	49,829,900,000
Share Price (p - as of 4/3/09)	46.57
Shares Outstanding (nbr - from Yahoo)	1,070,000,000
Market Value of Debt (D - assumed same as book value)	10,176,000,000
WACC (D*(Kd/Kd+Ke) + E*(Ke/Kd+Ke))	6.70%

	2009	2010	2011	2012	2013
Assumptions:
Revenue growth (%)	0.0%	3.0%	5.0%	5.0%	5.0%
EBIT Margin (%)	33.0%	33.0%	33.0%	33.0%	33.0%
NOA/Sales (%)	140.0%	140.0%	140.0%	140.0%	140.0%
Tax rate (%)	20.0%	20.0%	20.0%	20.0%	20.0%
Cost of capital (%) - (R)	6.70%	6.70%	6.70%	6.70%	6.70%
Terminal value growth rate (%) - (g)	3.0%
All numbers in Millions except per share data
Revenue	15,003.00	15,453.09	16,225.74	17,037.03	17,888.88
EBIT	4,950.99	5,099.52	5,354.50	5,622.22	5,903.33
TAX	990.20	1,019.90	1,070.90	1,124.44	1,180.67
NOPAT	3,960.79	4,079.62	4,283.60	4,497.78	4,722.67
NOA	21,004.20	21,634.33	22,716.04	23,851.84	25,044.44
Change in NOA (year 1 - year 2)	630.13	1,081.72	1,135.80	1,192.59	1,252.22
FCFF (NOPAT - Change in NOA)	3,330.67	2,997.90	3,147.79	3,305.18	3,470.44
Terminal Value (FCFF*(1+g)/(R-g))
Discount rate	1.0670	1.1384	1.2146	1.2959	1.3827
PV of Flows	3,121.66	2,633.46	2,591.62	2,550.45	2,509.92
Enterprise Value	94,966.41
Net Debt + Preferred Stock + Minority Interest	8,402
Equity Value	86,564.41
Outstanding Share	1,030
Equity per share	84.04

 

2014	2015	2016	2017	2018	2019
					Terminal
5.0%	5.0%	5.0%	5.0%	5.0%	3.0%
33.0%	33.0%	33.0%	33.0%	33.0%	33.0%
140.0%	140.0%	140.0%	140.0%	140.0%	140.0%
20.0%	20.0%	20.0%	20.0%	20.0%	20.0%
6.70%	6.70%	6.70%	6.70%	6.70%	6.70%
18,783.33	19,722.49	20,708.62	21,744.05	22,831.25	23,516.19
6,198.50	6,508.42	6,833.84	7,175.54	7,534.31	7,760.34
1,239.70	1,301.68	1,366.77	1,435.11	1,506.86	1,552.07
4,958.80	5,206.74	5,467.08	5,740.43	6,027.45	6,208.27
26,296.66	27,611.49	28,992.07	30,441.67	31,963.75	32,922.67
1,314.83	1,380.57	1,449.60	1,522.08	958.91
3,643.97	3,826.16	4,017.47	4,218.35	5,068.54
					141,280.45
1.4753	1.5740	1.6794	1.7919	1.9118	2.0398
2,470.05	2,430.80	2,392.18	2,354.17	2,651.15	69,260.94

	AMGN	BIIB	GENZ	GILD	JNJ	NVS	LIFE
EBIT/Sales	37.10%	13.72%	28.42%	51.68%	27.52%	22.89%	17.93%
EBITDA/Sales	44.25%	21.86%	39.70%	53.60%	31.97%	29.37%	28.88%
NI/Sales	27.97%	9.17%	19.38%	37.84%	20.53%	19.17%	2.97%
ROIC	14.58%	6.15%	12.55%	50.23%	30.02%	14.64%	0.73%
ROE	20.58%	5.78%	13.67%	48.62%	30.79%	16.18%	1.41%
5 yr Sales Growth	22.50%	36.50%	18.50%	54.00%	11.00%	15.00%	No Data
5 yr EPS Growth	20.50%	12.00%	14.50%	96.00%	14.50%	10.00%	No Data
5 yr Projected EPS	9.50%	25.50%	21.00%	17.50%	7.50%	8.50%	No Data
Debt/Capital	16.96%	0.86%	7.31%	3.01%	7.58%	7.99%	39.20%
Debt/Equity	20.42%	0.87%	7.89%	3.10%	8.20%	8.69%	64.48%
Debt/EBITDA	126.56%	-43.73%	32.01%	-4.63%	5.32%	42.58%	683.85%

 

TEVA

 

22.80%

 

27.24%

 

16.48%

 

7.98%

 

11.21%

 

20.50%

 

32.00%

 

12.00%

 

17.63%

 

21.40%

 

218.18%

			AMGN	GENZ	BIIB	GILD
Balance Sheet Data
(1)Net Interest bearing debt			8,402,000	(440,199)	520,704	(132,355)
(2)	Equity		20,386,000	7,305,993	5,806,083	4,152,487
(3)	Book value of invested capital (1 + 2)		28,788,000	6,865,794	6,326,787	4,020,132
Comparative Income Statements – 2008
(4)	Sales		15,003,000	4,605,039	4,097,507	5,335,750
(5)	Cost of sales		2,296,000	1,148,562	401,989	1,127,246
(6)	Gross margin		12,707,000	3,456,477	3,695,518	4,208,504
(7)	Expenses (SG&A, R&D, Other)		6,068,000	2,449,821	2,068,758	1,348,680
(8)	EBITDA		6,639,000	1,006,656	1,626,760	2,859,824
(9)	Depreciation		1,073,000	374,664	462,059	102,467
(10)		EBIT + Non Recurring Expense	5,566,000	631,992	1,164,701	2,757,357
(11)		Interest	316,000	4,418	-	12,101
(12)		Earnings before tax	5,250,000	627,574	1,164,701	2,745,256
(13)		Taxes	1,054,000	205,122	370,793	726,121
(14) Net income			4,196,000	422,452	793,908	2,019,135
(15)		Market value per share	46.57	56.04	50.32	46.98
(16)		Shares outstanding	1,070,000	271,350	288,000	910,000
(17)		Market value equity (15 x 16)	49,829,900	15,206,454	14,492,160	42,751,800
(18)		Market value net debt	8,402,000	(440,199)	520,704	(132,355)
(19)		EV	58,231,900	14,766,255	15,012,864	42,812,455

				Comparable
JNJ	NVS	LIFE	TEVA
				GENZ
1,084,000	5,326,000	3,200,400	6,589,000	BIIB
42,511,000	50,437,000	3,400,467	16,300,000	GILD
43,595,000	55,763,000	6,600,867	22,889,000	Mean
				Median
				Min Range
63,747,000	42,584,000	1,620,323	11,085,000	Max Range
18,511,000	11,439,000	679,571	5,117,000
45,236,000	31,145,000	940,752	5,968,000	AMGN
24,859,000	18,637,000	472,752	2,948,000	Min
20,377,000	12,508,000	468,000	3,020,000	Max
2,832,000	2,760,000	177,413	493,000
17,545,000	9,748,000	290,587	2,527,000	Equity Value
435,000	249,000	43,039	174,000	Min
17,110,000	9,499,000	247,548	2,353,000	Max
4,022,553	1,336,000	199,467	526,366
13,087,447	8,163,000	48,081	1,826,634
				Per Share
52.15	37.51	32.56	44.4	Min
2,770,000	2,260,000	173,800	888,720	Max
144,455,500	84,772,600	5,658,928	39,459,168
1,084,000	5,326,000	3,200,400	6,589,000
145,539,500	90,098,600	8,859,328	46,108,168

 

Price/BV (L17/L2)	Price/Earnings	EV/Sales (L19/L4)	EV/EBIT (L19/L10)	EV/EBITDA (L19/L8)
	(L17/L14)
2.08	36.00	3.21	23.36	14.67
2.50	18.25	3.66	12.89	9.23
10.30	21.17	8.02	15.53	14.97
4.96	25.14	4.96	17.26	12.96
2.50	21.17	3.66	15.53	14.67
2.08	18.25	3.21	12.89	9.23
10.30	36.00	8.02	23.36	14.97
42,430,751.20	76,594,618.15	48,107,762.77	71,745,109.71	61,269,273.95
209,883,425.23	151,038,109.45	120,379,564.70	130,047,493.21	99,387,895.46
42,430,751.20	76,594,618.15	39,705,762.77	63,343,109.71	52,867,273.95
209,883,425.23	151,038,109.45	111,977,564.70	121,645,493.21	90,985,895.46
39.65	71.58	37.11	59.20	49.41
196.15	141.16	104.65	113.69	85.03

 

PERIOD ENDING - 12/31/08	AMGN	GENZ	BIIB	GILD
Total Revenue	15,003,000	4,605,039	4,097,507	5,335,750
Cost of Revenue	2,296,000	1,148,562	401,989	1,127,246
Gross Profit	12,707,000	3,456,477	3,695,518	4,208,504
Operating Expenses
Research Development	3,030,000	1,308,330	1,072,058	721,768
Selling General and Administrative	4,169,000	1,338,190	925,305	797,344
Non Recurring	0	2,036	15,758	10,851
Others	294,000	226,442	468,786	0
Total Operating Expenses	0	2,874,998	2,481,907	0
Operating Income or Loss	5,214,000	581,479	1,213,611	2,678,541
Income from Continuing Operations
Total Other Income/Expenses Net	352,000	46,059	(64,668)	59,401
Earnings Before Interest And Taxes	5,566,000	629,956	1,148,943	2,746,506
Interest Expense	316,000	4,418	0	12,101
Income Before Tax	5,250,000	625,538	1,148,943	2,734,405
Income Tax Expense	1,054,000	204,457	365,776	723,251
Tax Rate	20.08%	32.68%	31.84%	26.45%
Minority Interest	0	2,217	0	8,564
Net Income From Continuing Ops	4,196,000	421,081	783,167	2,011,154
Non-recurring Events
Discontinued Operations	0	0	0	0
Extraordinary Items	0	0	0	0
Effect Of Accounting Changes	0	0	0	0
Other Items	0	0	0	0
Net Income	4,196,000	421,081	783,167	2,011,154
Preferred Stock And Other Adjustments	0	0	0	0
Net Income Applicable To Common Shares	$4,196,000	$421,081	$783,167	$2,011,154

 

JNJ	NVS	LIFE	TEVA
63,747,000	42,584,000	1,620,323	11,085,000
18,511,000	11,439,000	679,571	5,117,000
45,236,000	31,145,000	940,752	5,968,000
7,577,000	7,217,000	142,505	786,000
21,490,000	14,964,000	537,959	2,511,000
181,000	0	93,287	1,526,000
0	0	0	0
0	0	0	0
15,988,000	8,964,000	167,001	1,145,000
1,376,000	784,000	30,299	-144,000
17,364,000	9,748,000	197,300	1,001,000
435,000	249,000	43,039	174,000
16,929,000	9,499,000	154,261	827,000
3,980,000	1,336,000	124,299	185,000
23.51%	14.06%	80.58%	22.37%
0	0	0	-6,000
12,949,000	8,163,000	29,962	635,000
0	70,000	1,359	0
0	0	0	0
0	0	0	0
0	0	0	0
12,949,000	8,233,000	31,321	635,000
0	0	0	0
$12,949,000	$8,233,000	$31,321	$635,000

 

PERIOD ENDING - 12/31/08	AMGN	GENZ	BIIB	GILD
Assets
Current Assets
Cash And Cash Equivalents	1,774,000	572,106	622,385	1,459,302
Short Term Investments	7,778,000	57,507	779,023	330,760
Net Receivables	2,073,000	1,225,045	653,590	1,186,152
Inventory	2,075,000	453,437	263,602	927,868
Other Current Assets	1,521,000	208,040	139,400	396,199
Total Current Assets	15,221,000	2,516,135	2,458,000	4,300,281
Long Term Investments	0	427,403	1,126,558	1,449,577
Property Plant and Equipment	5,879,000	2,306,567	1,594,754	528,799
Goodwill	11,339,000	1,401,074	1,138,621	0
Intangible Assets	2,988,000	1,654,698	2,161,058	0
Accumulated Amortization	0	0	0	0
Other Assets	1,016,000	96,162	0	456,703
Deferred Long Term Asset Charges	0	269,237	0	283,214
Total Assets	36,443,000	8,671,276	8,478,991	7,018,574
Liabilities
Current Liabilities
Accounts Payable	3,886,000	893,255	865,564	1,172,398
Short/Current Long Term Debt	1,000,000	7,566	57,658	5,631
Other Current Liabilities	0	13,462	0	42,963
Total Current Liabilities	4,886,000	914,283	923,222	1,220,992
Long Term Debt	9,176,000	124,341	1,085,431	1,321,316
Other Liabilities	1,995,000	313,484	308,238	56,588
Deferred Long Term Liability Charges	0	13,175	356,017	74,181
Minority Interest	0	0	0	193,010
Negative Goodwill	0	0	0	0
Total Liabilities	16,057,000	1,365,283	2,672,908	2,866,087
Stockholders' Equity
Misc Stocks Options Warrants	0	0	0	0
Redeemable Preferred Stock	0	0	0	0
Preferred Stock	0	0	0	0
Common Stock	25,527,000	2,707	149	910
Retained Earnings	-5,258,000	1,247,796	270,180	382,874
Treasury Stock	0	0	-527,097	0
Capital Surplus	0	5,780,753	6,073,957	3,727,463
Other Stockholder Equity	117,000	274,737	-11,106	41,240
Total Stockholder Equity	20,386,000	7,305,993	5,806,083	4,152,487
Net Tangible Assets	$6,059,000	$4,250,221	$2,506,404	$4,152,487
Total Common Share Outstanding	1,070,000	271,350	288,000	910,000
Current Share Price (4/4/09)	46.57	56.04	50.32	46.98
Equity Value (Market Cap)	49,829,900	15,206,454	14,492,160	42,751,800
Enterprise Value	58,231,900	14,766,255	15,012,864	42,812,455

 

 

Book Value of Equity    20,386,000    7,305,993    5,806,083    4,152,487

 

JNJ	NVS	LIFE	TEVA
10,768,000	2,038,000	448,317	1,854,000
2,041,000	4,079,000	0	53,000
13,149,000	8,573,000	606,470	4,653,000
5,052,000	5,792,000	420,029	3,396,000
3,367,000	399,000	137,355	1,470,000
34,377,000	20,881,000	1,612,171	11,426,000
4,000	18,894,000	45,344	425,000
14,365,000	13,100,000	748,056	3,699,000
13,719,000	11,285,000	3,932,194	12,297,000
13,976,000	9,534,000	2,379,861	4,581,000
0	0	0	0
2,630,000	182,000	196,291	476,000
5,841,000	4,423,000	0	0
84,912,000	78,299,000	8,913,917	32,904,000
17,120,000	6,711,000	614,225	2,244,000
3,732,000	5,186,000	80,000	2,906,000
0	4,607,000	313,017	3,331,000
20,852,000	16,504,000	1,007,242	8,481,000
8,120,000	2,178,000	3,568,717	5,537,000
11,997,000	5,036,000	299,216	803,000
1,432,000	4,144,000	638,275	1,723,000
0	0	0	60,000
	0	0	0
42,401,000	27,862,000	5,513,450	16,604,000
0	0	0	0
0	0	0	0
0	0	0	0
3,120,000	959,000	1,896	48,000
63,379,000	49,468,000	118,313	5,288,000
-19033000	-139000	-964420	-924000
0	0	4,343,485	11,498,000
-4955000	149,000	-98807	390,000
42,511,000	50,437,000	3,400,467	16,300,000
$14,816,000	$29,618,000	-2911588	-578000
2,770,000	2,260,000	173,800	888,720
52.15	37.51	32.56	44.4
144,455,500	84,772,600	5,658,928	39,459,168
145,539,500	90,098,600	8,859,328	46,108,168

 

 

42,511,000    50,437,000    3,400,467    16,300,000

 

PERIOD ENDING - 12/31/08	AMGN	GENZ	BIIB
Depreciation	1,073,000	374,664	462,059

 

GILD	JNJ	NVS	LIFE	TEVA
102,467	2,832,000	2,760,000	177,413	493,000

	2008	2007
Revenues:
Product sales	14687	14311
Other revenues	316	460
Total revenues	15003	14771
Revenues Growth Rate	1.57%	3.53%
Operating expenses:
Cost of sales (excludes amortization of acquired intangible assets presented below)	2296	2548
Research and development	3030	3266
Selling, general and administrative	3789	3361
Amortization of acquired intangible assets	294	298
Write-off of acquired in-process research and development	—	590
Other charges	380	728
Total operating expenses	9789	10791
Operating income	5214	3980
EBIT Margin	0.34753049	0.26944689
NOPAT	4167.22743	3181.18657
NOA/Sales Rate	140%	148%
NOA (From Balance Sheet)	21010	21895
NOA Change	-885	-472
Other income (expense):
Interest and other income, net	352	309
Interest expense, net	-316	-328
Total other income (expense)	36	-19
Income before income taxes	5250	3961
Provision for income taxes	1054	795
Tax Rate	0.2007619	0.20070689
Net income	4196	3166
Earnings per share:
Basic	3.92	2.83
Diluted	3.9	2.82
Shares used in calculation of earnings per share:
Basic	1070	1117
Diluted	1075	1123

 

2006

 

13858

 

410

 

14268

 

14.79%

 

2095

 

3366

 

3366

 

370

 

1231

 

—

 

10428

 

3840

 

0.26913373

 

2817.91045

 

157%

 

22367

 

 

309 -129 180 4020 1070

 

0.26616915

 

2950

 

2.51

 

2.48

 

1176

 

1190