Amgen 2000 Annual Report Download - page 30

33
December 31, 2000 1999
Contractual maturity:
Maturing in one year or less $ 783.6 $ 376.4
Maturing after one year
through three years 986.1 896.0
Maturing after three years 180.5 21.2
Total debt securities 1,950.2 1,293.6
Equity securities 245.3 104.6
$ 2,195.5 $ 1,398.2
Classification in balance sheets:
Cash and cash equivalents $ 226.5 $ 130.9
Marketable securities 1,801.6 1,202.1
Other assets–noncurrent 285.3 144.6
2,313.4 1,477.6
Less cash (117.9) (79.4)
$ 2,195.5 $ 1,398.2
The primary objectives for the Company’s investment portfolio are
liquidity and safety of principal. Investments are made to achieve
the highest rate of return to the Company, consistent with these
two objectives. The Company’s investment policy limits invest-
ments to certain types of instruments issued by institutions with
investment grade credit ratings and places restrictions on maturi-
ties and concentration by type and issuer.
Inventories
Inventories are stated at the lower of cost or market. Cost is deter-
mined in a manner which approximates the first-in, first-out (FIFO)
method. Inventories consist of currently marketed products and
product candidates which the Company expects to commercialize.
The inventory balance of such product candidates totaled $112.7
million and $20.3 million as of December 31, 2000 and 1999,
respectively. Inventories are shown net of applicable reserves and
allowances. Inventories consisted of the following (in millions):
December 31, 2000 1999
Raw materials $ 29.4 $ 37.5
Work in process 238.7 96.6
Finished goods 37.1 50.2
$ 305.2 $ 184.3
Depreciation and Amortization
Depreciation of buildings and equipment is provided over their
estimated useful lives on a straight-line basis. Leasehold improve-
ments are amortized on a straight-line basis over the shorter of their
estimated useful lives or lease terms, including periods covered by
options which are expected to be exercised. Useful lives by asset
category are as follows:
Asset Category Years
Buildings and building improvements 10 – 30
Manufacturing equipment 5 – 10
Laboratory equipment 5 – 10
Furniture and office equipment 3 – 10
Long-Lived Assets
The Company reviews its long-lived assets for impairment when-
ever events or changes in circumstances indicate that the carry-
ing amount of an asset may not be recoverable.
Product Sales
Product sales primarily consist of sales of EPOGEN®(Epoetin alfa)
and NEUPOGEN®(Filgrastim) (see Note 10, “Segment Information”).
The Company has the exclusive right to sell Epoetin alfa for dial-
ysis, diagnostics and all non-human uses in the United States.
The Company sells Epoetin alfa under the brand name EPOGEN®.
Amgen has granted to Ortho Pharmaceutical Corporation (which
has assigned its rights under the product license agreement to
Ortho Biotech Products, L.P.), a subsidiary of Johnson & Johnson
(“Johnson & Johnson”), a license relating to Epoetin alfa for sales
in the United States for all human uses except dialysis and
diagnostics. Pursuant to this license, Amgen does not recognize
product sales it makes into the exclusive market of Johnson &
Johnson and does recognize the product sales made by Johnson
& Johnson into Amgen’s exclusive market. Sales in Amgen’s
exclusive market and adjustments thereto are derived from
Company shipments and from third-party data on shipments to
end users and their usage (see Note 4, “Other Items, Net – Legal
Award”). Sales of the Company’s other products are recognized
when shipped and title has passed.
Research and Development Costs
Research and development costs are expensed as incurred,
including the cost to acquire in-process research and develop-
ment (see Note 11, “Business Combination”).
Notes to Consolidated Financial Statements