Amgen 2007 Annual Report Download - page 156

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AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The purchase price was allocated to all of the tangible and amortizable intangible assets acquired, including
acquired IPR&D, and liabilities assumed 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 was assigned to goodwill. The follow-
ing table summarizes the allocation of the purchase price (in millions):
In-process research and development ............................................ $1,101
Identifiable intangible asset .................................................... 320
Cash ...................................................................... 252
Deferred tax assets, net ........................................................ 290
Property, plant and equipment .................................................. 220
Other assets ................................................................ 75
Liabilities, principally debt .................................................... (743)
Goodwill ................................................................... 684
Net assets acquired ....................................................... $2,199
The estimated fair values of the IPR&D and the identifiable intangible asset were determined based upon dis-
counted after-tax cash flows adjusted for the probabilities of successful development and commercialization. The
identifiable intangible asset consists of Abgenix’s XenoMouse®technology that has alternative future uses in our
R&D activities and will be amortized over its 5-year estimated useful life. 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 Abgenix’s operations have been in-
cluded in the consolidated financial statements commencing April 1, 2006. Pro forma results of operations for the
year ended December 31, 2006 assuming the acquisition of Abgenix had taken place at the beginning of 2006
would not differ significantly from actual reported results.
9. Commitments
We lease certain administrative and laboratory facilities under non-cancelable operating leases that expire
through December 2021. The following table summarizes the minimum future rental commitments under
non-cancelable operating leases at December 31, 2007 (in millions):
Year ending December 31,
Lease
commitments
2008 .................................................................. $ 144
2009 .................................................................. 135
2010 .................................................................. 121
2011 .................................................................. 108
2012 .................................................................. 92
Thereafter .............................................................. 631
Total .............................................................. 1,231
Less income from subleases ................................................ 257
Net minimum operating lease payments ................................... $ 974
Included in the table above are future rental commitments for abandoned leases in the amount of $369 mil-
lion less assumed sublease income of $230 million. Rental expense on operating leases, net of sublease rental
income, for the years ended December 31, 2007, 2006 and 2005 was $104 million, $69 million and $48 million,
respectively. Sublease income for the years ended December 31, 2007, 2006 and 2005 was not material.
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