Amgen 2007 Annual Report Download - page 135

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Intangible assets and goodwill
Intangible assets are recorded at cost, less accumulated amortization. Amortization of intangible assets is
provided over their estimated useful lives ranging from 5 to 15 years on a straight-line basis (weighted average
remaining amortization period of 9 years at December 31, 2007). As of December 31, 2007 and 2006, intangible
assets consisted of the following (in millions):
Intangible assets subject to amortization
Weighted average
amortization period
December 31,
2007 2006
Acquired product technology rights:
Developed product technology(1) ............................... 15years $ 2,872 $ 2,877
Core technology(1) .......................................... 15years 1,348 1,348
Trade name(1) .............................................. 15years 190 190
Acquired R&D technology rights(2) .............................. 5years 350 350
Other intangible assets(3) ....................................... 11years 456 454
5,216 5,219
Less accumulated amortization .................................. (1,884) (1,472)
$ 3,332 $ 3,747
(1) Amortization is included in “Amortization of acquired intangible assets” in the Consolidated Statements of
Income.
(2) Amortization is included in “Research and development” expense in the Consolidated Statements of In-
come.
(3) Amortization is principally included in “Cost of sales” and “Selling, general and administrative” expense in
the Consolidated Statements of Income.
Acquired product technology rights relate to the identifiable intangible assets acquired in connection with
the Immunex Corporation (“Immunex”) acquisition in July 2002. Intangible assets also include acquired research
and development (“R&D”) technology rights consisting of technology used in R&D with alternative future uses.
Acquired R&D technology rights principally includes the XenoMouse®technology acquired in the Abgenix, Inc.
(“Abgenix”) acquisition (see Note 8, “Acquisitions”). The total estimated amortization for each of the next five
years for our intangible assets subject to amortization is $411 million, $411 million, $404 million and $352 mil-
lion and $316 million in 2008, 2009, 2010, 2011 and 2012, respectively.
We review our intangible assets for impairment periodically and whenever events or changes in circum-
stances indicate that the carrying amount of an asset may not be recoverable. During the years ended
December 31, 2007 and 2006, we recognized $3 million and $49 million, respectively, of impairment charges re-
lated to a non-ENBREL related intangible asset previously acquired in the Immunex acquisition, which is
included in “Amortization of acquired intangible assets” in the Consolidated Statements of Income.
We had $11.2 billion and $11.3 billion of goodwill at December 31, 2007 and 2006, respectively, which pri-
marily relates to the acquisition of Immunex. The decrease in goodwill in 2007 is primarily due to the reversal of
certain income tax reserves established in connection with various prior acquisitions partially offset by the
goodwill associated with the Alantos Pharmaceuticals Holding, Inc. (“Alantos”) and Ilypsa, Inc. (“Ilypsa”)
acquisitions (see Note 8, “Acquisitions”) during the year ended December 31, 2007. We perform an impairment
test annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill
may not be recoverable.
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