26th Oct 2006 11:00
AstraZeneca PLC26 October 2006 Consolidated Income Statement 2006 2005For the nine months ended 30 September $m $m Sales 19,321 17,664 Cost of sales (3,981) (3,968) Distribution costs (165) (155) Research and development (2,778) (2,506) Selling, general and administrative costs (6,585) (6,292) Other operating income 401 123 Operating profit 6,213 4,866 Finance income 621 484 Finance expense (394) (372) Profit before tax 6,440 4,978 Taxation (1,822) (1,481) Profit for the period 4,618 3,497 Attributable to: Equity holders of the Company 4,611 3,482 Minority interests 7 15 4,618 3,497 Basic earnings per $0.25 Ordinary Share $2.93 $2.14 Diluted earnings per $0.25 Ordinary Share $2.92 $2.14 Weighted average number of Ordinary Shares in issue (millions) 1,572 1,626 Diluted average number of Ordinary Shares in issue (millions) 1,578 1,627 Dividends declared in the period 2,217 1,676 Consolidated Income Statement 2006 2005For the quarter ended 30 September $m $m Sales 6,516 5,789 Cost of sales (1,339) (1,245) Distribution costs (53) (51) Research and development (962) (781) Selling, general and administrative costs (2,180) (2,056) Other operating income 124 39 Operating profit 2,106 1,695 Finance income 221 168 Finance expense (140) (120) Profit before tax 2,187 1,743 Taxation (595) (513) Profit for the period 1,592 1,230 Attributable to: Equity holders of the Company 1,587 1,223 Minority interests 5 7 1,592 1,230 Basic earnings per $0.25 Ordinary Share $1.01 $0.76 Diluted earnings per $0.25 Ordinary Share $1.01 $0.76 Weighted average number of Ordinary Shares in issue (millions) 1,562 1,611 Diluted average number of Ordinary Shares in issue (millions) 1,569 1,613 Consolidated Balance Sheet As at As at As at 30 31 30 September December September 2006 2005 2005 $m $m $m ASSETS Non-current assets Property, plant and equipment 7,297 6,985 7,262Intangible assets, including Goodwill 4,710 2,712 2,763Other investments 137 256 239Deferred tax assets 1,545 1,117 1,168 13,689 11,070 11,432 Current assets Inventories 2,209 2,206 2,493Trade and other receivables 5,404 4,778 4,776Other investments 413 1,624 1,242Income tax receivable 651 183 184Cash and cash equivalents 5,756 4,979 4,400 14,433 13,770 13,095Total assets 28,122 24,840 24,527 LIABILITIES Current liabilities Interest bearing loans and borrowings (113) (90) (122)Trade and other payables (5,780) (5,466) (5,404)Income tax payable (2,195) (1,283) (1,215) (8,088) (6,839) (6,741)Non-current liabilities Interest bearing loans and borrowings (1,089) (1,111) (1,122)Deferred tax liabilities (1,772) (1,112) (1,217)Retirement benefit obligations (1,752) (1,706) (1,678)Provisions (329) (309) (316) Other payables (309) (72) (84) (5,251) (4,310) (4,417)Total liabilities (13,339) (11,149) (11,158)Net assets 14,783 13,691 13,369 EQUITY Capital and reserves attributable to equity holders ofthe Company Share capital 388 395 399 Share premium account 1,620 692 638 Other reserves 1,856 1,831 1,866 Retained earnings 10,819 10,679 10,372 14,683 13,597 13,275 Minority equity interests 100 94 94 Total equity 14,783 13,691 13,369 Consolidated Cash Flow Statement 2006 2005For the nine months ended 30 September $m $m Cash flows from operating activities Profit before taxation 6,440 4,978Finance income and expense (227) (112)Depreciation and amortisation 917 933(Increase)/decrease in working capital (164) 72Other non-cash movements 241 175Cash generated from operations 7,207 6,046 Interest paid (35) (15) Tax paid (1,639) (1,217) Net cash inflow from operating activities 5,533 4,814 Cash flows from investing activities Acquisition of businesses (1,170) -Movement in short term investments and fixed deposits 1,353 (101)Purchase of property, plant and equipment (565) (586)Disposal of property, plant and equipment 20 77Purchase of intangible assets (489) (137)Purchase of non-current asset investments (15) (6)Disposal of non-current asset investments 54 -Interest received 259 137Dividends paid by subsidiaries to minority interest (4) (5)Net cash outflow from investing activities (557) (621)Net cash inflow before financing activities 4,976 4,193Cash flows from financing activities Proceeds from issue of share capital 934 76Repurchase of shares (2,958) (2,182)Dividends paid (2,220) (1,717)Movement in short term borrowings 36 8Net cash outflow from financing activities (4,208) (3,815)Net increase in cash and cash equivalents in the period 768 378 Cash and cash equivalents at the beginning of the period 4,895 3,927Exchange rate effects 22 (16)Cash and cash equivalents at the end of the period 5,685 4,289Cash and cash equivalents consists of:Cash and cash equivalents 5,756 4,400Overdrafts (71) (111) 5,685 4,289 Consolidated Statement of Recognised Income and Expense For the nine months ended 30 September 2006 2005 $m $m Profit for the period 4,618 3,497 Foreign exchange adjustments on consolidation 565 (910) Available for sale losses taken to equity (11) - Actuarial loss for the period (13) (19) Tax on items taken directly to reserves 95 4 Total recognised income and expense for the period 5,254 2,572 Attributable to: Equity holders of the Company 5,248 2,571 Minority interests 6 1 5,254 2,572 Notes to the Interim Financial Statements 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES The unaudited financial statements for the nine months ended 30 September 2006have been prepared in accordance with International Accounting Standards andInternational Financial Reporting Standards (collectively "IFRS") as adopted bythe European Union (EU). Details of the accounting policies applied are thoseset out in AstraZeneca PLC's Annual Report and Form 20-F Information 2005. The information contained in Note 3 updates the disclosures concerning legalproceedings and contingent liabilities in the Company's Annual Report and Form20-F Information 2005. These interim financial statements do not constitute statutory accounts of theGroup within the meaning of Section 240 of the Companies Act 1985. Statutoryaccounts for the year ended 31 December 2005 have been filed with the Registrarof Companies. The auditors' report on those accounts was unqualified and didnot contain any statement under Section 237 of the Companies Act 1985. 2 NET CASH FUNDS The table below provides an analysis of net cash funds and a reconciliation ofnet cash flow to the movement in net cash funds. At 1 Cash Non-cash Exchange At 30 Jan Flow Acquisitions Movements Movements Sept 2006 2006 $m $m $m $m $m $m Loans due after 1 year (1,111) - - 22 - (1,089) Other investments - current 1,624 (1,353) 157 (19) 4 413 Cash and cash equivalents 4,979 754 - - 23 5,756 Overdrafts (84) 14 - - (1) (71) Short term borrowings (6) (36) - - - (42) 6,513 (621) 157 (19) 26 6,056 Net funds 5,402 (621) 157 3 26 4,967 Non-cash movements in the period consist of fair value adjustments under IAS 39. 3 LEGAL PROCEEDINGS and commitments AstraZeneca is involved in various legal proceedings considered typical to itsbusiness, including litigation relating to employment matters, productliability, commercial disputes, infringement of intellectual property rights andthe validity of certain patents. The matters discussed below constitute the moresignificant developments since publication of the disclosures concerning legalproceedings in the Company's Annual Report and Form 20-F Information 2005 andHalf Year Results 2006. Losec MUPSTM (omeprazole) / NexiumTM tablets (esomeprazole magnesium) An oral hearing is scheduled to take place at the European Patent Office (EPO)on 26 October 2006 to hear appeals concerning the validity of an AstraZenecaformulation patent in Europe relating to Losec MUPSTM and NexiumTM tablets. Thefinal decision of the EPO in these proceedings is expected to be announced onthe same date. The European patent that is the subject of these proceedingsrelates only to NexiumTM in tablet formulation. Should there be a negativedecision in respect of the formulation patent, AstraZeneca would continue tohave a comprehensive intellectual property portfolio protecting NexiumTM itself,including several patents and data exclusivity. An oral hearing is scheduled to take place at the EPO on 19 December 2006 tohear an appeal concerning the validity of an AstraZeneca substance patent inEurope relating to NexiumTM. The final decision of the EPO in these proceedingsis expected to be announced on the same date. NexiumTM (esomeprazole magnesium) In August 2006, AstraZeneca received a notice from Dr Reddy's Laboratories, Inc.and Dr Reddy's Laboratories, Ltd. that they had submitted an Abbreviated NewDrug Application to the US Food and Drug Administration for esomeprazolemagnesium delayed-release capsules, 20mg and 40mg, containing paragraph IVcertifications of invalidity and/or non-infringement in respect of some, but notall, of AstraZeneca's US patents listed in the FDA's Orange Book with referenceto NexiumTM. In particular, the notice from Dr Reddy's did not challenge three OrangeBook-listed patents claiming esomeprazole magnesium (US patents numbers5,714,504; 5,877,192; and 6,875,872). AstraZeneca's exclusivity relating tothese three patents expires in 2014 and 2015 and Dr Reddy's cannot marketgeneric esomeprazole magnesium in the US until the end of the exclusivityafforded by these patents. As a result, AstraZeneca has not commencedproceedings against Dr Reddy's in response to the ANDA filing. AstraZeneca has full confidence in, and will continue vigorously to defend andenforce, its intellectual property rights protecting NexiumTM, including thosepatents listed in the FDA's Orange Book. SeroquelTM (quetiapine fumarate) In September 2006, AstraZeneca received a subpoena from the California AttorneyGeneral's Office seeking information about the marketing and sale of SeroquelTMin California and its status on the state's formulary. In the same month,AstraZeneca received a subpoena from the Alaska Attorney General's Office in anunrelated investigation. The subpoena seeks information relating to the safetyand efficacy of SeroquelTM, as well as marketing practices relating to SeroquelTM. AstraZeneca is in the initial stages of responding to these requests forinformation. ZestrilTM (lisinopril) As previously disclosed, in April 2006 the Federal Court of Canada ruled infavour of AstraZeneca and Merck & Co., Inc. in the patent infringement casebrought against Apotex, Inc. alleging infringement of Merck's lisinopril patentin Canada. In October 2006, the Federal Court of Appeal in Canada upheld thelower court's decision and dismissed Apotex's appeal. US Securities and Exchange Commission enquiry AstraZeneca has received an informal enquiry from the US Securities and ExchangeCommission seeking information about payments made to doctors and governmentofficials in relation to AstraZeneca's businesses in certain countries outsidethe US. AstraZeneca is cooperating fully with the SEC. General With respect to each of the legal proceedings described above, we are unable tomake estimates of the loss or range of losses at this stage. We also do notbelieve that disclosure of the amount sought by plaintiffs, if that is known,would be meaningful with respect to those legal proceedings. Arrangements with Merck As described in more detail in the Annual Report and Form 20-F Information 2005,AstraZeneca has significant arrangements with Merck & Co., Inc. relating tocertain of our products and development compounds. These arrangements includeexit provisions from 2008 onwards and we regularly monitor the value of thebenefits we expect to receive. The exit provisions are subject to a minimum overall net payment of $3.3 billionand will offer AstraZeneca unencumbered discretion in its operations in the USmarket (except in respect of PrilosecTM and NexiumTM) without the restrictionsof various contractual obligations that are currently imposed as a result ofMerck's interests, together with relief from contingent payment obligations. Theprojected value of the benefits to be obtained in 2008 depends on a number offactors, including the future contributions from products that have already beenlaunched, those that are due to be launched in the US and those that are indevelopment, together with the further value that AstraZeneca can extract fromgreater freedom to operate in the US. 4 NINE MONTHS TERRITORIAL SALES ANALYSIS % Growth 9 Months 9 Months Constant 2006 2005 Currency $m $m Actual US 9,059 7,864 15 15 Canada 768 719 7 (1) North America 9,827 8,583 14 13 France 1,219 1,265 (4) (1) UK 613 561 9 12 Germany 864 917 (6) (3) Italy 954 878 9 13 Sweden 228 232 (2) 3 Europe others 2,667 2,521 6 9 Total Europe 6,545 6,374 3 7 Japan 1,061 1,103 (4) 4 China 241 196 23 20 Rest of World 1,647 1,408 17 17Total 19,321 17,664 9 11 5 THIRD QUARTER TERRITORIAL SALES ANALYSIS % Growth 3rd 3rd Quarter Quarter 2006 2005 Constant $m $m Actual Currency US 3,100 2,621 18 18 Canada 255 231 10 1 North America 3,355 2,852 18 17 France 385 391 (2) (7) UK 213 181 18 14 Germany 284 296 (4) (8) Italy 294 269 9 5 Sweden 72 70 3 (3) Europe others 870 805 8 4 Total Europe 2,118 2,012 5 1 Japan 370 367 1 7 China 85 61 39 36 Rest of World 588 497 18 18Total 6,516 5,789 13 11 6 NINE MONTHS PRODUCT SALES ANALYSIS World US Constant 9 Months 9 Months Actual Currency 9 Months Actual 2006 2005 Growth Growth 2006 Growth $m $m % % $m % Gastrointestinal: Nexium 3,752 3,386 11 12 2,535 11Losec/Prilosec 1,024 1,241 (17) (15) 156 (18)Others 54 51 6 8 14 75Total Gastrointestinal 4,830 4,678 3 4 2,705 9Cardiovascular: Seloken/Toprol-XL 1,407 1,280 10 10 1,105 17Crestor 1,403 915 53 53 792 50Atacand 809 727 11 12 192 7Tenormin 238 262 (9) (6) 19 12Zestril 229 248 (8) (6) 21 -Plendil 210 287 (27) (26) 20 (74)Others 213 235 (9) (7) 2 (33)Total Cardiovascular 4,509 3,954 14 15 2,151 23Respiratory:Pulmicort 892 824 8 9 564 20Symbicort 861 742 16 19 - -Rhinocort 270 295 (8) (8) 189 (12)Oxis 65 69 (6) (5) - -Accolate 59 55 7 7 42 20Others 105 115 (9) (6) - -Total Respiratory 2,252 2,100 7 9 795 11Oncology:Arimidex 1,096 856 28 30 440 28Casodex 879 840 5 8 213 19Zoladex 736 752 (2) 1 80 (15)Iressa 174 201 (13) (10) 12 (76)Faslodex 138 101 37 38 75 12Nolvadex 66 86 (23) (18) 2 (33)Others 16 8 - - 8 -Total Oncology 3,105 2,844 9 12 830 13Neuroscience:Seroquel 2,504 2,006 25 26 1,823 26Local anaesthetics 396 380 4 7 65 35Zomig 295 258 14 16 127 55Diprivan 225 281 (20) (19) 63 (44)Others 44 50 (12) (10) 13 -Total Neuroscience 3,464 2,975 16 17 2,091 23Infection and Other:Merrem 437 375 17 18 84 38Other Products 190 262 (27) (25) 97 (37)Total Infection and Other 627 637 (2) (1) 181 (16)Aptium Oncology 276 247 12 12 276 12Astra Tech 258 229 13 16 30 43Total 19,321 17,664 9 11 9,059 15 7 THIRD QUARTER PRODUCT SALES ANALYSIS World US 3rd 3rd Constant 3rd Quarter Quarter Actual Currency Quarter Actual 2006 2005 Growth Growth 2006 Growth $m $m % % $m %Gastrointestinal: Nexium 1,280 1,127 14 13 879 15Losec/Prilosec 324 376 (14) (15) 56 (5)Others 21 15 40 40 9 -Total Gastrointestinal 1,625 1,518 7 6 944 15Cardiovascular: Seloken/Toprol-XL 473 437 8 7 373 12Crestor 536 325 65 62 301 59Atacand 279 238 17 13 70 23Tenormin 77 87 (11) (11) 6 (14)Zestril 76 83 (8) (10) 8 -Plendil 68 82 (17) (18) 9 (44)Others 70 75 (7) (11) - (100)Total Cardiovascular 1,579 1,327 19 17 767 27Respiratory:Pulmicort 263 234 12 11 165 23Symbicort 276 240 15 11 - -Rhinocort 83 91 (9) (9) 58 (12)Oxis 21 23 (9) (13) - -Accolate 20 14 43 43 15 88Others 33 34 (3) (3) - -Total Respiratory 696 636 9 7 238 14Oncology:Arimidex 382 303 26 24 156 28Casodex 299 276 8 7 73 20Zoladex 255 258 (1) (2) 28 (15)Iressa 62 61 2 5 4 (67)Faslodex 47 37 27 24 24 4Nolvadex 21 26 (19) (15) - -Others 10 2 - - 8 -Total Oncology 1,076 963 12 11 293 17Neuroscience:Seroquel 848 706 20 19 613 19Local anaesthetics 124 118 5 3 16 (6)Zomig 99 86 15 13 41 52Diprivan 64 76 (16) (17) 12 (54)Others 15 15 - - 5 67Total Neuroscience 1,150 1,001 15 14 687 16Infection and Other:Merrem 153 117 31 28 33 154Other Products 57 73 (22) (26) 32 (24)Total Infection and Other 210 190 11 7 65 18Aptium Oncology 95 82 16 16 95 16Astra Tech 85 72 18 14 11 57Total 6,516 5,789 13 11 3,100 18 Shareholder Information ANNOUNCEMENTS AND MEETINGS Announcement of fourth quarter and full year 2006 results 1 February 2007 Announcement of first quarter 2007 results 26 April 2007 Annual General Meeting 26 April 2007 Announcement of second quarter and half year 2007 results 26 July 2007 Announcement of third quarter and nine months 2007 results 1 November 2007 DIVIDENDS The record date for the first interim dividend paid on 18 September 2006 (in theUK, Sweden and the US) was 11 August 2006. Ordinary shares traded ex-dividend onthe London and Stockholm Stock Exchanges from 9 August 2006. ADRs tradedex-dividend on the New York Stock Exchange from the same date. The record date for the second interim dividend for 2006 payable on 19 March2007 (in the UK, Sweden and the US) will be 9 February 2007. Ordinary shareswill trade ex-dividend on the London and Stockholm Stock Exchanges from 7February 2007. ADRs will trade ex-dividend on the New York Stock Exchange fromthe same date. Future dividends will normally be paid as follows: First interim Announced in July and paid in September Second interim Announced in January/February and paid in March TRADEMARKS The following brand names used in these interim financial statements aretrademarks of the AstraZeneca Group of companies: Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan FaslodexIressa Losec Losec MUPS Merrem Nexium Nolvadex Oxis Plendil PrilosecPulmicort Pulmicort Respules Rhinocort Rhinocort Aqua Seloken SeroquelSeroquel SR Symbicort Symbicort SMART Tenormin Toprol-XL Zestril ZoladexZomig ADDRESSES FOR CORRESPONDENCE Registrar and Depositary Registered Office Swedish Securities Registration Centre Transfer Office for ADRs The AstraZeneca Registrar JPMorgan Chase Bank 15 Stanhope Gate VPC AB Lloyds TSB Registrars JPMorgan Service Center London PO Box 7822 The Causeway PO Box 3408 W1K 1LN SE-103 97 Stockholm Worthing South Hackensack UK Sweden West Sussex NJ 07606-3408 BN99 6DA US UK Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000 Tel (freephone in UK): Tel (toll free in US):0800 389 1580 888 697 8018 Tel (outside UK): Tel: +1 (201) 680 6630+44 (0)121 415 7033 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS In order to utilise the 'safe harbour' provisions of the US Private SecuritiesLitigation Reform Act 1995, we are providing the following cautionary statement:These interim financial statements contain certain forward-looking statementsabout AstraZeneca. Although we believe our expectations are based on reasonableassumptions, any forward-looking statements may be influenced by factors thatcould cause actual outcomes and results to be materially different from thosepredicted. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in suchstatements. These forward-looking statements are subject to numerous risks anduncertainties. Important factors that could cause actual results to differmaterially from those contained in forward-looking statements, certain of whichare beyond control, include, among other things: the loss or expiration ofpatents, marketing exclusivity or trade marks; exchange rate fluctuations; therisk that R&D will not yield new products that achieve commercial success; theimpact of competition, price controls and price reductions; taxation risks; therisk of substantial product liability claims; the impact of any failure by thirdparties to supply materials or services; the risk of delay to new productlaunches; the difficulties of obtaining and maintaining governmental approvalsfor products; the risk of failure to observe ongoing regulatory oversight; therisk that new products do not perform as we expect; and the risk ofenvironmental liabilities. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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