Amgen 2001 Annual Report Download - page 38

Download and view the complete annual report

Please find page 38 of the 2001 Amgen annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 54

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54

AMGEN 2001 ANNUAL REPORT
Note 1: Summary of significant accounting policies
Business
Amgen Inc. (“Amgen” or the “Company”) is a global
biotechnology company that discovers, develops, manu-
factures, and markets human therapeutics based on
advances in cellular and molecular biology.
Principles of consolidation
The consolidated financial statements include the
accounts of the Company and its wholly owned sub-
sidiaries as well as affiliated companies in which the
Company has a controlling financial interest and exercises
control over their operations (“majority controlled affili-
ates”). All material intercompany transactions and bal-
ances have been eliminated in consolidation. Investments
in affiliated companies which are 50% or less owned and
where the Company exercises significant influence over
operations are accounted for using the equity method.
All other equity investments are accounted for under the
cost method. The caption “Loss of affiliates, net” includes
Amgen’s equity in the operating results of affiliated com-
panies and the minority interest others hold in the oper-
ating results of Amgen’s majority controlled affiliates.
Cash and cash equivalents
The Company considers cash equivalents to be only those
investments which are highly liquid, readily convertible
to cash, and which mature within three months from
date of purchase.
Available-for-sale securities
The Company considers its investment portfolio and
marketable equity investments available-for-sale as
defined in Statement of Financial Accounting Standards
(“SFAS”) No. 115 and, accordingly, these investments are
recorded at fair value (see Note 9, “Fair values of finan-
cial instruments”). Realized gains totaled $13.3 million,
$32.4 million, and $2.8 million for the years ended
December 31, 2001, 2000, and 1999, respectively.
Realized losses totaled $21.7 million, $2.5 million, and
$6.6 million for the years ended December 31, 2001,
2000, and 1999, respectively. The cost of securities sold
is based on the specific identification method. The fair
values of available-for-sale investments by type of
security, contractual maturity, and classification in the
balance sheets are as follows (in millions):
Notes to Consolidated Financial Statements
December 31, 2001
Amortized Gross Gross Estimated
cost unrealized gains unrealized losses fair value
December 31, 2001
Type of security:
Corporate debt securities $1,207.7 $ 50.8 $(1.4) $1,257.1
U.S. Treasury securities and obligations of
U.S. government agencies 601.3 12.1 (0.2) 613.2
Other interest bearing securities 697.6 1.1 (1.0) 697.7
Total debt securities 2,506.6 64.0 (2.6) 2,568.0
Equity securities 58.3 117.9 (0.3) 175.9
$2,564.9 $181.9 $(2.9) $2,743.9
December 31, 2000
Type of security:
Corporate debt securities $1,054.7 $ 11.3 $(1.4) $1,064.6
U.S. Treasury securities and obligations of
U.S. government agencies 663.6 5.9 — 669.5
Other interest bearing securities 215.8 0.4 (0.1) 216.1
Total debt securities 1,934.1 17.6 (1.5) 1,950.2
Equity securities 73.1 179.2 (7.0) 245.3
$2,007.2 $196.8 $(8.5) $2,195.5
36