BIOGEN INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) For the Years Ended December 31, 2017 2018 2016 $ $ 10,886.8 1,980.2 585.9 13,452.9 10,354.7 1,559.2 360.0 12,273.9 9.817.9 1,314.5 316.4 11,448.8 1,816.3 2,597.2 2,106.3 747.3 185.0 112.5 12.0 1,630.0 2,253.6 1,933.9 814.7 112.3 120.0 0.9 1,478.7 1,973.3 1,946.6 385.6 10.2 33.1 (12.3) 62.7 Revenues: Product, net. ...................... Revenues from anti-CD20 therapeutic programs ............. Other... Total revenues ............ .......... Cost and expenses: Cost of sales, excluding amortization and impairment of acquired intangible assets .... Research and development............ Selling, general and administrative ............. Amortization and impairment of acquired intangible assets .... Collaboration profit (loss) sharing Acquired in-process research and development ... Restructuring charges............. ...................... (Gain) loss on fair value remeasurement of contingent consideration TECFIDERA litigation settlement charge..... Total cost and expenses.. Income from operations... Other income (expense), net ........... Income before income tax expense and equity in loss of investee, net of tax. Income tax expense .... Equity in loss of investee, net of tax ......... Net income.............. Net income (loss) attributable to noncontrolling interests, net of tax ....... Net income attributable to Biogen Inc.. Net income per share: Basic earnings per share attributable to Biogen Inc. .......... Diluted earnings per share attributable to Biogen Inc. .......... Weighted average shares used in calculating: Basic earnings per share attributable to Biogen Inc. ......... Diluted earnings per share attributable to Biogen Inc. ..... 7,564.3 5,888.6 11.0 6,928.1 5,345.8 (217.0) 14.8 454.8 6,297.1 5,151.7 (218.7) 5,899.6 1,425.6 5,128.8 2,458.7 4,933.0 1,237.3 ............. 4,474.0 2,670.1 3,695.7 43.3 131.0 2,539.1 (7.1) 3,702.8 $ 21.63 $ 21.58 $ 11.94 $ 11.92 $ 16.96 16.93 204.9 205.3 212.6 213.0 218.4 218.8 BIOGEN INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) For the Years Ended December 31, 2018 2017 4,430.7 $ 2,539.1 $ 2016 3,702.8 $ (10.6) (3.5) (10.6) 6.7 12.7 0.6 (3.9) 9.2 (10.0) 97.4 (193.8) 51.6 Net income attributable to Biogen Inc. Other comprehensive income: Unrealized gains (losses) on securities available for sale: Unrealized gains (losses) recognized during the period, net of tax ..... Less: reclassification adjustment for (gains) losses included in net income, net of tax.. Unrealized gains (losses) on securities available for sale, net of tax........... Unrealized gains (losses) on cash flow hedges: Unrealized gains (losses) recognized during the period, net of tax ..... Less: reclassification adjustment for (gains) losses included in net income, net of tax....... Unrealized gains (losses) on cash flow hedges, net of tax .. Gains (losses) on net investment hedges: Gains (losses) recognized during the period, net of tax......... Less: reclassification adjustment for (gains) losses included in net income, net of tax... Gains (losses) on net investment hedges, net of tax .......... Unrealized gains (losses) on pension benefit obligation, net of tax ..... Currency translation adjustment ........ Total other comprehensive income (loss), net of tax ............ Comprehensive income attributable to Biogen Inc........... Comprehensive income (loss) attributable to noncontrolling interests, net of tax....... Comprehensive income ......... 41.8 139.2 31.5 (162.3) (4.0) 47.6 5.0 (1.5) 3.5 5.5 (67.8) 76.5 4,507.2 (4.1) 158.7 1.5 2,540.6 5.1 (138.6) (95.9) 3,606.9 42.9 4,550.1 131.0 2,671.6 (7.1) 3,599.8 $ $ BIOGEN INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) As of December 31, 2018 2017 1,224.6 $ 2,313.4 1,958.5 526.9 929.9 687.6 7,640.9 1,375.9 3,601.2 3,120.0 5,706.4 2,153.9 1,690.6 25,288.9 $ 1,573.8 2,115.2 1,787.0 532.6 902.7 962.0 7,873.3 3,057.3 3,182.4 3,879.6 4,632.5 595.9 431.6 23,652.6 $ 3.2 ASSETS Current assets: Cash and cash equivalents ... Marketable securities ........... Accounts receivable, net.. Due from anti-CD20 therapeutic programs....... Inventory ............... Other current assets ... .... Total current assets.......................... Marketable securities....... Property, plant and equipment, net Intangible assets, net............ Goodwill .... Deferred tax asset Investments and other assets .............. Total assets..... ......... $ LIABILITIES AND EQUITY Current liabilities: Current portion of notes payable .... Taxes payable ...... Accounts payable .............................. Accrued expenses and other Total current liabilities ............... Notes payable.... Deferred tax liability........ Other long-term liabilities ................... Total liabilities..... Commitments and contingencies Equity: Biogen Inc. shareholders' equity Preferred stock, par value $0.001 per share ..... Common stock, par value $0.0005 per share.. Additional paid-in capital ........ Accumulated other comprehensive loss .. Retained earnings ....... Treasury stock, at cost; 23.8 million and 23.8 million shares, respectively.... Total Biogen Inc. shareholders' equity.......... Noncontrolling interests. Total equity ................................ Total liabilities and equity ............ - 63.5 370.5 2,861.2 3,295.2 5,936.5 1,636.2 1,389.4 12,257.3 68.2 395.5 2,901.3 3,368.2 5,935.0 122.6 1,628.7 11,054.5 TUSS........ 0.1 (240.4) 16,257.0 (2,977.1) 13,039.6 (8.0) 13,031.6 25,288.9 $ 0.1 97.8 (318.4) 15,810.4 (2,977.1) 12,612.8 (14.7) 12,598.1 23,652.6 1. Ch 2: Cash Flow Identify: Using the annual balance sheet and the Income Statement, calculate the cash flow identify a) OCF b) NCS c) changes in WC d) CFFA e) CFC f) CFS) g) Explain the sources and uses of cash for the firm h) is the Net working capital negative or positive? i) Does this indicate any potential difficulty for the company? j) is the Cash Flow to Shareholders negative? k) Explain how this might come about? 1) Is the Cash Flow to Creditors Negative? m) Explain how this might come about? n) Based on the information above, what is your opinion in regards to your selected company's liquidity? BIOGEN INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) For the Years Ended December 31, 2017 2018 2016 $ $ 10,886.8 1,980.2 585.9 13,452.9 10,354.7 1,559.2 360.0 12,273.9 9.817.9 1,314.5 316.4 11,448.8 1,816.3 2,597.2 2,106.3 747.3 185.0 112.5 12.0 1,630.0 2,253.6 1,933.9 814.7 112.3 120.0 0.9 1,478.7 1,973.3 1,946.6 385.6 10.2 33.1 (12.3) 62.7 Revenues: Product, net. ...................... Revenues from anti-CD20 therapeutic programs ............. Other... Total revenues ............ .......... Cost and expenses: Cost of sales, excluding amortization and impairment of acquired intangible assets .... Research and development............ Selling, general and administrative ............. Amortization and impairment of acquired intangible assets .... Collaboration profit (loss) sharing Acquired in-process research and development ... Restructuring charges............. ...................... (Gain) loss on fair value remeasurement of contingent consideration TECFIDERA litigation settlement charge..... Total cost and expenses.. Income from operations... Other income (expense), net ........... Income before income tax expense and equity in loss of investee, net of tax. Income tax expense .... Equity in loss of investee, net of tax ......... Net income.............. Net income (loss) attributable to noncontrolling interests, net of tax ....... Net income attributable to Biogen Inc.. Net income per share: Basic earnings per share attributable to Biogen Inc. .......... Diluted earnings per share attributable to Biogen Inc. .......... Weighted average shares used in calculating: Basic earnings per share attributable to Biogen Inc. ......... Diluted earnings per share attributable to Biogen Inc. ..... 7,564.3 5,888.6 11.0 6,928.1 5,345.8 (217.0) 14.8 454.8 6,297.1 5,151.7 (218.7) 5,899.6 1,425.6 5,128.8 2,458.7 4,933.0 1,237.3 ............. 4,474.0 2,670.1 3,695.7 43.3 131.0 2,539.1 (7.1) 3,702.8 $ 21.63 $ 21.58 $ 11.94 $ 11.92 $ 16.96 16.93 204.9 205.3 212.6 213.0 218.4 218.8 BIOGEN INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) For the Years Ended December 31, 2018 2017 4,430.7 $ 2,539.1 $ 2016 3,702.8 $ (10.6) (3.5) (10.6) 6.7 12.7 0.6 (3.9) 9.2 (10.0) 97.4 (193.8) 51.6 Net income attributable to Biogen Inc. Other comprehensive income: Unrealized gains (losses) on securities available for sale: Unrealized gains (losses) recognized during the period, net of tax ..... Less: reclassification adjustment for (gains) losses included in net income, net of tax.. Unrealized gains (losses) on securities available for sale, net of tax........... Unrealized gains (losses) on cash flow hedges: Unrealized gains (losses) recognized during the period, net of tax ..... Less: reclassification adjustment for (gains) losses included in net income, net of tax....... Unrealized gains (losses) on cash flow hedges, net of tax .. Gains (losses) on net investment hedges: Gains (losses) recognized during the period, net of tax......... Less: reclassification adjustment for (gains) losses included in net income, net of tax... Gains (losses) on net investment hedges, net of tax .......... Unrealized gains (losses) on pension benefit obligation, net of tax ..... Currency translation adjustment ........ Total other comprehensive income (loss), net of tax ............ Comprehensive income attributable to Biogen Inc........... Comprehensive income (loss) attributable to noncontrolling interests, net of tax....... Comprehensive income ......... 41.8 139.2 31.5 (162.3) (4.0) 47.6 5.0 (1.5) 3.5 5.5 (67.8) 76.5 4,507.2 (4.1) 158.7 1.5 2,540.6 5.1 (138.6) (95.9) 3,606.9 42.9 4,550.1 131.0 2,671.6 (7.1) 3,599.8 $ $ BIOGEN INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) As of December 31, 2018 2017 1,224.6 $ 2,313.4 1,958.5 526.9 929.9 687.6 7,640.9 1,375.9 3,601.2 3,120.0 5,706.4 2,153.9 1,690.6 25,288.9 $ 1,573.8 2,115.2 1,787.0 532.6 902.7 962.0 7,873.3 3,057.3 3,182.4 3,879.6 4,632.5 595.9 431.6 23,652.6 $ 3.2 ASSETS Current assets: Cash and cash equivalents ... Marketable securities ........... Accounts receivable, net.. Due from anti-CD20 therapeutic programs....... Inventory ............... Other current assets ... .... Total current assets.......................... Marketable securities....... Property, plant and equipment, net Intangible assets, net............ Goodwill .... Deferred tax asset Investments and other assets .............. Total assets..... ......... $ LIABILITIES AND EQUITY Current liabilities: Current portion of notes payable .... Taxes payable ...... Accounts payable .............................. Accrued expenses and other Total current liabilities ............... Notes payable.... Deferred tax liability........ Other long-term liabilities ................... Total liabilities..... Commitments and contingencies Equity: Biogen Inc. shareholders' equity Preferred stock, par value $0.001 per share ..... Common stock, par value $0.0005 per share.. Additional paid-in capital ........ Accumulated other comprehensive loss .. Retained earnings ....... Treasury stock, at cost; 23.8 million and 23.8 million shares, respectively.... Total Biogen Inc. shareholders' equity.......... Noncontrolling interests. Total equity ................................ Total liabilities and equity ............ - 63.5 370.5 2,861.2 3,295.2 5,936.5 1,636.2 1,389.4 12,257.3 68.2 395.5 2,901.3 3,368.2 5,935.0 122.6 1,628.7 11,054.5 TUSS........ 0.1 (240.4) 16,257.0 (2,977.1) 13,039.6 (8.0) 13,031.6 25,288.9 $ 0.1 97.8 (318.4) 15,810.4 (2,977.1) 12,612.8 (14.7) 12,598.1 23,652.6 1. Ch 2: Cash Flow Identify: Using the annual balance sheet and the Income Statement, calculate the cash flow identify a) OCF b) NCS c) changes in WC d) CFFA e) CFC f) CFS) g) Explain the sources and uses of cash for the firm h) is the Net working capital negative or positive? i) Does this indicate any potential difficulty for the company? j) is the Cash Flow to Shareholders negative? k) Explain how this might come about? 1) Is the Cash Flow to Creditors Negative? m) Explain how this might come about? n) Based on the information above, what is your opinion in regards to your selected company's liquidity