Amgen 2007 Annual Report Download - page 97

Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are material or reasonably likely to be material to
our consolidated financial position or consolidated results of operations.
Contractual Obligations
Contractual obligations represent future cash commitments and liabilities under agreements with third par-
ties, and exclude contingent liabilities for which we cannot reasonably predict future payment. Additionally, the
expected timing of payment of the obligations presented below is estimated based on current information. Timing
of payments and actual amounts paid may be different depending on the timing of receipt of goods or services or
changes to agreed-upon terms or amounts for some obligations.
The following table represents our contractual obligations as of December 31, 2007, aggregated by type (in
millions):
Payments Due by Period
Contractual Obligations Total
Less than
1 Year
1-3
Years
4-5
Years
More than
5 Years
Long-term debt obligations(1) ........... $14,722 $2,306 $1,384 $2,958(2) $8,074
Operating lease obligations ............. 1,231 144 256 200 631
Purchase obligations(3) ................. 2,689 1,309 975 378 27
Unrecognized tax benefits(4) ............ 300 300 — — —
Total contractual obligations ........ $18,942 $4,059 $2,615 $3,536 $8,732
(1) The long-term obligation amounts in the above table differ from the related carrying amounts on the Con-
solidated Balance Sheet as of December 31, 2007 due to the accretion of the original issue discount on the
2032 Modified Convertible Notes and the inclusion of future interest payments. Future interest payments are
included on the 2009 Notes, the 2011 Convertible Notes, the 2013 Convertible Notes, the 2014 Notes, 2017
Notes, 2037 Notes and the Century Notes at fixed rates of, 4.00%, 0.125%, 0.375%, 4.85%, 5.85%, 6.375%
and 8.125%, respectively. We used an interest rate forward curve at December 31, 2007 to compute the
amount of the future interest payments on our variable rate 2008 Floating Rate Note and interest rate swaps.
(2) Holders of the 2032 Modified Convertible Notes may require us to purchase all or a portion of the notes on
specific dates, the next of which is March 1, 2012, at the then-accreted value. Consequently, the amount
above reflects the 2032 Modified Convertible Notes accreted value on March 1, 2012, the next put date.
(See Note 6, “Financing arrangements” to the Consolidated Financial Statements for further discussion of
the terms of the convertible notes.)
(3) Purchase obligations primarily relate to (i) our long-term supply agreement with BI Pharma for the manu-
facture of commercial quantities of ENBREL, which are based on firm commitments for the purchase of
production capacity for ENBREL and reflect certain estimates such as production run success rates and bulk
drug yields achieved; (ii) R&D commitments (including those related to clinical trials) for new and existing
products; (iii) capital expenditures and (iv) open purchase orders for the acquisition of goods and services in
the ordinary course of business. Our obligation to pay certain of these amounts may be reduced based on
certain future events.
(4) In addition to the current liabilities for UTBs included in the table above, long-term liabilities for UTBs (net
of federal tax benefits on state taxes) and related accrued interest totaling approximately $600 million at
December 31, 2007 are not included in the contractual obligations table because, due to their nature, there is
a high degree of uncertainty regarding the timing of future cash outflows and other events that extinguish
these liabilities.
In addition to the above table, we have committed to make potential future milestone payments to third-
parties as part of in-licensing and product development programs all of which are contingent upon the occurrence
of certain future events. Such events could include, but are not limited to, development milestones, regulatory
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