Amgen 2001 Annual Report Download - page 10

Amgen holds substantial cash and short-
term marketable securities on its balance
sheet and also maintains a bank line of
credit and other capital market relation-
ships to ensure financial flexibility and
adequate liquidity. At year-end 2001, the
current portion of the company’s assets
totaled $3,858.6 million. In March 2002,
Amgen received approximately $2.8 billion
from the issuance of 30-year zero coupon
senior notes that are convertible into shares
of the company’s common stock. These notes
have a yield to maturity of 1.125% and an
initial conversion price of $80.61. Amgen
used $650 million of the proceeds from the
sale of the notes to repurchase approxi-
mately 11.3 million shares of its common
stock. The remainder of the proceeds will
be used for general corporate purposes.
Amgen’s overall balance sheet strength
and substantial cash-generating capabilities
provide important sources of financing,
not only for internal research and develop-
ment activities and ongoing expansion of
company operations, but also for potential
product candidate in-licensing opportuni-
ties and strategic acquisitions, such as
the proposed Immunex transaction. As
markets for the company’s potential new
therapeutics become increasingly competi-
tive, Amgen’s strong financial position is
a distinct competitive advantage.
Creating Stockholder Value Amgen
remains committed to creating long-term
value for its stockholders, balancing near-
term earnings growth with the need to
continually re-invest substantial portions
of its cashflow in new research and product
development opportunities.
Since the company’s initial public offering
in 1983, shares of Amgen common stock
have appreciated at a compound annual
growth rate of 30%. An investment of $100
in Amgen on December 31, 1986 would
have been worth approximately $12,000
at year-end 2001. Amgen’s stock repurchase
program primarily reduces the dilutive
effect from the employee stock option and
the stock purchase plans. Our stock repur-
chase program also represents one measure
of our confidence in the long-term value of
Amgen’s stock. In 2001, Amgen repur-
chased 12.7 million shares of its common
stock at an average price of $58 per share,
at a total cost of $737.5 million. Since
1992, Amgen has bought back 327.4 mil-
lion shares at an average price of approxi-
mately $17 per share. The closing price of
Amgen stock on December 31, 2001 was
$56 per share.
8
Cost 12/31/01*
Theoretical
Value
Share Repurchase Since 1992
($ in billions)
$5.5
$18.5
*Based on the
closing price of
Amgen stock on
December 31, 2001
12/31/86
$100 Invested in Amgen
vs. S&P 500 Index
1986 $100 $100
2001 $688 $12,245
S&P
500 Amgen
S&P 500
Amgen
12/31/01