Amgen 2007 Annual Report Download - page 134
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AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Inventories
Inventories are stated at the lower of cost or market. Cost, which includes amounts related to materials, la-
bor and overhead, is determined in a manner which approximates the first-in, first-out (FIFO) method. During
2007, we wrote-off $90 million of excess inventory principally due to changing regulatory and reimbursement
environments. Inventories consisted of the following (in millions):
December 31,
2007 2006
Raw materials .............................................. $ 173 $ 205
Work in process ............................................. 1,246 1,090
Finished goods .............................................. 672 608
$2,091 $1,903
Depreciation
Depreciation of buildings, equipment, furniture and fixtures is provided over their estimated useful lives on
a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their
estimated useful lives or lease terms. Useful lives by asset category are as follows:
Asset category Years
Buildings and improvements ............................................ 10-40
Manufacturing equipment .............................................. 5-12
Laboratory equipment ................................................. 5-12
Furniture, fixtures and other assets ....................................... 3-15
Property, plant and equipment
As of December 31, 2007 and 2006, property, plant and equipment are recorded at historical cost and con-
sisted of the following (in millions):
December 31,
2007 2006
Land .................................................... $ 451 $ 398
Buildings and improvements ................................. 3,102 2,776
Manufacturing equipment ................................... 1,221 1,081
Laboratory equipment ....................................... 831 761
Furniture, fixtures and other assets ............................. 3,003 2,401
Construction in progress ..................................... 893 1,271
9,501 8,688
Less accumulated depreciation and amortization .................. (3,560) (2,767)
$ 5,941 $ 5,921
We review our property, plant and equipment assets for impairment whenever events or changes in circum-
stances indicate that the carrying amount of an asset may not be recoverable.
F-8