Amgen 2001 Annual Report Download - page 42

limitations on liens and sale/leaseback transactions and,
except with respect to the Notes and the Century Notes,
place limitations on subsidiary indebtedness.
The Company has an unsecured committed credit
facility (the “credit facility”) with five participating
banking institutions that includes a commitment expir-
ing on May 28, 2003 for up to $150 million of borrow-
ings under a revolving line of credit (the “revolving
line commitment”). This credit facility supports the
Company’s commercial paper program. As of December 31,
2001, $150 million was available under the revolving
line commitment for borrowing. Borrowings under the
revolving line commitment bear interest at various rates
which are a function of, at the Company’s option, either
the prime rate of a major bank, the federal funds rate,
or a Eurodollar base rate. Under the terms of the credit
facility, the Company is required to meet a minimum
interest coverage ratio and maintain a minimum level of
tangible net worth. In addition, the credit facility con-
tains limitations on investments, liens, and sale/lease-
back transactions.
The aggregate stated maturities of all long-term
obligations due subsequent to December 31, 2001, are
as follows: none in 2002; $23 million in 2003; none in
2004, 2005, and 2006; and $200 million after 2006.
Note 4: Other items, net
Other items, net in the accompanying consolidated state-
ments of operations consists of the following expense/
(income) items (in millions):
Years ended December 31, 2001 2000 1999
Termination of
collaboration agreements $203.1 $ — $ —
Legal award, net —(73.9) (49.0)
Write-off of acquired
in-process research and
development (see Note 11,
“Kinetix acquisition”) —30.1 —
Amgen Foundation
contribution —25.0 —
$203.1 $(18.8) $(49.0)
Termination of collaboration agreements
In 2001, the Company recorded a charge of $203.1 mil-
lion primarily related to the costs of terminating collabo-
ration agreements with various third parties, including
PRAECIS PHARMACEUTICALS INCORPORATED
(“Praecis”) and certain academic institutions. These
costs include $102.4 million primarily with respect to
AMGEN 2001 ANNUAL REPORT
Kirin-Amgen’s expenses primarily consist of costs
related to research and development activities conducted
on its behalf by Amgen and Kirin. Kirin-Amgen pays
Amgen and Kirin for such services at negotiated rates.
During the years ended December 31, 2001, 2000,
and 1999, Amgen earned revenues from Kirin-Amgen
of $210.1 million, $221.0 million, and $138.5 million,
respectively, for certain research and development
activities performed on Kirin-Amgen’s behalf, which
are included in “Corporate partner revenues” in the
accompanying consolidated statements of operations.
At December 31, 2001, Amgen’s share of Kirin-
Amgen’s undistributed retained earnings was approxi-
mately $85.5 million.
Note 3: Debt
The Company has a commercial paper program which
provides for unsecured short-term borrowings up to an
aggregate of $200 million. As of December 31, 2001,
commercial paper with a face amount of $100 million
was outstanding. These borrowings had maturities of less
than one month and had effective interest rates averaging
1.9%. Commercial paper with a face amount of $100 mil-
lion and with effective interest rates averaging 6.7% was
outstanding at December 31, 2000.
The Company has established a $500 million debt
shelf registration statement. In December 1997, pursuant
to this registration statement, the Company issued $100
million of debt securities that bear interest at a fixed rate
of 6.5% and mature in 2007 (the “Notes”) and estab-
lished a $400 million medium-term note program. The
Company may offer and issue medium-term notes from
time to time with terms to be determined by market
conditions.
The Company had $100 million of debt securities
outstanding at December 31, 2001 and 2000 that bear
interest at a fixed rate of 8.1% and mature in 2097 (the
“Century Notes”). These securities may be redeemed in
whole or in part at the Company’s option at any time
for a redemption price equal to the greater of the prin-
cipal amount to be redeemed or the sum of the present
values of the principal and remaining interest payments
discounted at a determined rate plus, in each case,
accrued interest.
In addition to the Notes and the Century Notes,
debt securities outstanding at December 31, 2001 and
2000 include $23 million of debt securities that bear
interest at a fixed rate of 6.2% and mature in 2003.
The terms of the debt securities require the Company to
meet certain debt to tangible net asset ratios and place
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