Amgen 2007 Annual Report Download - page 154

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accumulated other comprehensive income
The components of accumulated other comprehensive income as of December 31, 2007 is as follows (in
millions):
Before-tax Tax impact After-tax
Unrealized losses on foreign currency hedges ................ $(69) $ 26 $(43)
Reclassification adjustments for losses realized in net income . . . (4) 2 (2)
Unrealized gains on available-for-sale securities .............. 62 (23) 39
(11) 5 (6)
Cumulative foreign currency translation gain ................ 89 (30) 59
$ 78 $(25) $ 53
Other
In addition to common stock, our authorized capital includes 5 million shares of preferred stock, $0.0001
par value, of which 0.7 million shares have been reserved and designated Series A Preferred Stock. At De-
cember 31, 2007 and 2006, no shares of preferred stock were issued or outstanding.
At December 31, 2007, we had reserved 252 million shares of our common stock, which may be issued
through our option and stock purchase plans, through conversion of our convertible notes and through our war-
rants.
8. Acquisitions
Alantos Pharmaceuticals Holding, Inc.
On July 16, 2007, we completed the acquisition of Alantos, which was accounted for as a business combina-
tion. Alantos was a privately held company that specialized in the development of drugs for the treatment of
diabetes and inflammatory diseases. Pursuant to the merger agreement, we paid cash of approximately $300 mil-
lion to acquire all of the outstanding shares of Alantos. The purchase price paid, including transaction costs, was
preliminarily allocated to IPR&D of $270 million and other net assets acquired of approximately $10 million,
based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair values
of assets and liabilities acquired of $23 million was assigned to goodwill. The estimated fair value of the IPR&D
was determined based upon discounted after-tax cash flows adjusted for the probabilities of successful develop-
ment and commercialization. The amount allocated to IPR&D was immediately expensed in the Consolidated
Statement of Income (see Note 1, “Summary of significant accounting policies — Acquired in-process research
and development”). The results of Alantos’ operations have been included in the consolidated financial state-
ments commencing July 16, 2007. Pro forma results of operations for the year ended December 31, 2007
assuming the acquisition of Alantos had taken place at the beginning of 2007 would not differ significantly from
the actual reported results.
Ilypsa, Inc.
On July 18, 2007, we completed the acquisition of Ilypsa, which was accounted for as a business combina-
tion. Ilypsa was a privately held company that specialized in the development of non-absorbed drugs for renal
disorders. Pursuant to the merger agreement, we paid cash of approximately $400 million to acquire all of the
outstanding shares of Ilypsa. The purchase price paid, including transaction costs, was preliminarily allocated to
IPR&D of $320 million and other net assets acquired of $42 million, based on their estimated fair values at the
acquisition date. The excess of the purchase price over the fair values of assets and liabilities acquired of approx-
imately $41 million was assigned to goodwill. The estimated fair value of the IPR&D was determined based
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