Actelion Annual Report 2004 - Consolidated Financial Statements

Financials

THE ACTELION ANNUAL REPORT 2004

Consolidated Financial Statements

Consolidated Statements of Operations
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statement of Changes in Shareholders’ Equity

Consolidated Statements of Operations


	For the year ended
	December 31
(in CHF thousands, except share and per share amounts)	Note	2004	2003
Net revenue: Products sales	2	455,346	300,315
Contract revenue	2	16,534	7,229
Total net revenue		471,880	307,544
Operating expenses
Cost of sales		45,873	31,816
Research and development		136,288	79,173
Marketing and advertising		101,710	79,828
Selling, general and administration		95,703	69,645
Amortization of acquired intangible assets	13	1,721	1,756
Write-off of acquired in-process research and development	3/5	5,000	46,990
Total operating expense		386,295	309,208
Operating income (loss)		85,585	(1,664)

Interest income		1,036	946
Interest expense		(405)	(885)
Amortization of debt discount and issuance costs		(7,448)	(1,500)
Other financial income, net		3,079	2,567
Income (loss) from continuing operations before income tax expense and share in loss of affiliate		81,847	(536)

Income tax expense	7	(4,276)	(830)
Income (loss) from continuing operations before share in loss of affiliate		77,571	(1,366)
Share in loss of affiliate	3	–	(1,089)
Income (loss) from continuing operations		77,571	(2,455)
Income (loss) from discontinued operations, net of tax and minority interest	4	9,648	(7,461)
Net income		87,219	(9,916)


Basic income per share:	8
Continuing Operations		3.52	(0.11)
Discontinued Operations		0.44	(0.35)
Net income (loss)		3.96	(0.46)

Diluted income per share:	8
Continuing operations		3.36	(0.11)
Discontinued operations		0.42	(0.35)
Net income (loss)		3.78	(0.46)

The accompanying notes form an integral part of these consolidated financial statements.

Consolidated Balance Sheets


			December 31
(in CHF thousands, except share and per share amounts)	Note	2004	2003
Assets Current assets
Cash and cash equivalents	9	300,336	258,770
Investments	10	2,422	2,199
Trade and other receivables, net	11	109,649	66,711
Inventories	12	17,903	21,455
Other current assets		5,992	3,966
Current assets of discontinued operations	4	–	10,385
Total current assets		436,302	363,486

Property, plant and equipment, net	14	35,221	18,982
Other assets		7,014	6,687
Intangible assets, net	13	8,610	8,813
Goodwill, net	3/13	27,318	3,784
Deferred tax asset	7	5,256	–
Non-current assets of discontinued operations	4	–	1,091
Total assets		519,721	402,843

Liabilities and Shareholders’ Equity Current liabilities
Trade and other payables		42,821	27,535
Accrued expenses	15	53,438	37,601
Deferred revenue, current portion	6	17,399	10,821
Financial debt	16	–	41,161
Other current liabilities	10/23	33,024	2,019
Contingent consideration	3	–	6,641
Current liabilities of discontinued operations	4	–	8,758
Total current liabilities		146,682	134,536

Long-term financial debt, less current portion	16	152,042	145,147
Deferred revenue, less current portion	6	60,233	64,468
Other non-current liabilities		2,678	1,963
Non-current liabilities of discontinued operations	4	–	1,785
Total liabilities		361,635	347,899

Minority interest of discontinued operations	4	–	517
Commitments and contingencies	17

Shareholders’ Equity Common shares (par value CHF 2.50 per share, authorized 33,406,640 and 30,506,640 shares; issued 22,209,953 and 21,751,148 shares in 2004 and 2003, respectively)		55,525	54,378
Additional paid-in-capital		316,844	302,817
Accumulated deficit		(210,007)	(297,226)
Unearned compensation		(2,256)	(5,369)
Treasury shares, at cost	19	(871)	(1,018)
Accumulated other comprehensive income (loss)	21	(1,149)	845
Total shareholders’ equity		158,086	54,427
Total liabilities, minority interest and shareholders’ equity		519,721	402,843

The accompanying notes form an integral part of these consolidated financial statements

Consolidated Statements of Cash Flows


	For the year ended
		December 31
(in CHF thousands)	2004	2003
Cash flows from operating activities Net income (loss)	87,219	(9,916)
Income (loss) from discontinued operations, net of minority interest	(9,648)	7,461
Income (loss) from continuing operations	77,571	(2,455)
Adjustments to reconcile net income (loss) to net cash provided from operating activities:
Depreciation and amortization	9,925	7,549
Share in loss of affiliate	–	1,089
Stock-based compensation	4,773	4,819
Realized (gain) loss on sale of marketable securities	–	(602)
Gain on derivative instruments	143	(937)
Write-off of acquired in-process research and development	5,000	46,990
Amortization of debt discount and issuance costs	7,448	1,500
Increase in trade and other receivables	(44,970)	(44,837)
Decrease (increase) in inventories	3,552	(7,633)
Increase in other current assets	(2,326)	(951)
Increase in other assets	(4,086)	(461)
Increase in trade and other payables	16,032	8,592
Increase in accrued expenses	17,366	18,290
Increase in deferred revenue	2,342	5,891
Increase (decrease) in other liabilities	(1,090)	1,484
Net cash flow provided by operating activities	91,680	38,328
Cash flows from investing activities
Proceeds from sale of marketable securities	–	12,794
Purchase of property, plant and equipment	(24,643)	(7,114)
Purchase of derivative instruments	(1,287)	(1,621)
Proceeds from sale of derivative instruments	1,311	1,477
Purchase of intangible assets	(6,575)	(7,101)
Proceedes from sale of subsidiary	9,242	–
Acquisition of subsidiary	–	(40,148)
Net cash flow used in investing activities	(21,952)	(41,713)
Cash flows from financing activities
Payments on capital leases	(146)	(607)
Proceeds from issuance of financial debt	–	141,677
Repayment of financial debt	(41,119)	–
Proceeds from exercise of stock options	13,661	7,553
Net cash flow provided by financing activities	(27,604)	148,623

Net effect of exchange rates on cash and cash equivalents	(558)	(993)
Net effect of discontinued operations	–	(1,676)
Net change in cash and cash equivalents	41,566	142,569

Cash and cash equivalents at beginning of year	258,770	116,201
Cash and cash equivalents at end of year	300,336	258,770
Supplemental disclosures of cash flow information Cash paid during the year for:
Interest	527	972
Taxes	962	168

The accompanying notes form an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Shareholders’ Equity


	Common Shares:
	Shares	Amount	Additional Paid-in-Capital	Accumulated Deficit	Unearned Compensation	Treasury Shares	Other Comprehensive Loss	Shareholders’ Equity
(in CHF thousands, except share amounts) At January 1, 2003	21,363,059	53,441	289,671	(287,310)	(3,936)	(1,018)	(528)	50,320
Comprehensive loss net of tax effect: Net loss				(9,916)				(9,916)
Other comprehensive income (loss): Currency translation adjustment							1,373	1,373
Comprehensive loss								(8,543)
Changes in underlying equity of affiliate			93					93
Exercise of stock options	374,589	937	6,616					7,553
Stock-based compensation expense, net			653		4,351			5,004
Issuance of stock options			6,023		(6,023)			–
Stock option forfeitures and cancellations			(239)		239			–
At December 31, 2003	21,737,648	54,378	302,817	(297,226)	(5,369)	(1,018)	845	54,427

Comprehensive loss net of tax effect: Net income				87,219				87,219
Other comprehensive income (loss):								–
Currency translation adjustment							(1,994)	(1,994)
Comprehensive income								85,225
Exercise of stock options	458,805	1,147	12,514					13,661
Transactions in treasury shares	1,950		118			147		265
Stock-based compensation expense, net			1,556		2,952			4,508
Issuance of stock options			372		(372)			–
Stock option forfeitures and cancellations			(533)		533			–
At December 31, 2004	22,198,403	55,525	316,844	(210,007)	(2,256)	(871)	(1,149)	158,086

The accompanying notes form an integral part of these consolidated financial statements.