Operating Expense and Tax Rate Analysis, on an Adjusted Basis
- Cost of Sales, excluding the impact of the Puerto Rico excise tax, increased 0.6 points to 14.0 percent driven primarily by product mix, offset partially by manufacturing efficiencies and higher average net sales price.
- Research & Development (R&D) expenses increased 11 percent in support of our later-stage clinical programs, driven by AMG 145 and romosozumab (AMG 785).
- Selling, General & Administrative (SG&A) expenses were flat. ENBREL profit share expenses increased 18 percent to $386 million, offset by favorable changes to the estimated U.S. healthcare reform federal excise fee and foreign exchange rates.
$Millions, except percentages |
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On an Adjusted Basis |
Q3 '12 |
Q3 '11 |
YOY Δ | |||
Cost of Sales |
$674 |
$593 |
14% | |||
% of sales |
16.0% |
15.3% |
0.7 pts | |||
% of sales (Excluding PR excise tax) |
14.0% |
13.4% |
0.6 pts | |||
Research & Development |
$849 |
$763 |
11% | |||
% of sales |
20.2% |
19.7% |
0.5 pts | |||
Selling, General & Administrative |
$1,110 |
$1,113 |
(0%) | |||
% of sales |
26.4% |
28.7% |
(2.3) pts | |||
TOTAL Operating Expenses |
$2,633 |
$2,469 |
7% | |||
pts: percentage points |
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- Tax Rate increased by 5.1 points to 16.0 percent due primarily to higher tax credits associated with the Puerto Rico excise tax in the third quarter of 2011, the expiry of the U.S federal R&D credit at the end of 2011, and the unfavorable tax impact of changes in revenue and expense mix. As of Sept. 30, 2012, the R&D tax credit had not been extended.
On an Adjusted Basis |
Q3 '12 |
Q3 '11 |
YOY Δ | ||
Tax Rate |
16.0% |
10.9% |
5.1 pts | ||
Tax Rate (Excluding PR excise tax credits) |
20.2% |
17.4% |
2.8 pts | ||
pts: percentage points |
