Amgen 2009 Annual Report Download - page 75

(3) Included in Cost of sales (excludes amortization of certain acquired intangible assets) for 2007 is a charge of
$30 million related to the write-off of the cost of a semi-completed manufacturing asset that will not be used
due to a change in manufacturing strategy.
(4) Included in R&D expenses for 2009, 2008, 2007 and 2006 is the ongoing, non-cash amortization of the
R&D technology intangible assets acquired with alternative future uses of $70 million ($44 million, net of
tax), $70 million ($44 million, net of tax), $71 million ($44 million, net of tax) and $48 million ($30 mil-
lion, net of tax), respectively, acquired with the acquisitions of Avidia and Abgenix in 2006.
(5) Primarily represents the non-cash amortization of acquired product technology rights, primarily related to
ENBREL, acquired in the Immunex acquisition. Amortization charges, net of tax, for the five years ended
December 31, 2009 were $186 million, $183 million, $185 million, $200 million and $215 million, re-
spectively.
(6) As part of the accounting for the business combinations of Alantos and Ilypsa in 2007 and Avidia and
Abgenix in 2006, under then existing accounting rules we recorded charges to write-off acquired in-process
R&D (“IPR&D”) of $270 million and $320 million in 2007, respectively, and $130 million and $1.1 billion
in 2006, respectively. These charges represent the estimated fair values of the IPR&D that, as of the re-
spective acquisition dates, had not reached technological feasibility and had no alternative future use.
(7) In 2009, we recorded loss accruals for settlements of certain legal proceedings aggregating $33 million. In
2008, we recorded loss accruals for settlements of certain commercial legal proceedings aggregating $288
million, principally related to the settlement of the Ortho Biotech Products L.P. (“Ortho Biotech”) antitrust
suit. In 2007, we recorded a loss accrual for an ongoing commercial legal proceeding and recorded an ex-
pense of $34 million. In 2005, we settled certain legal matters, primarily related to a patent legal proceeding,
and recorded an expense of $49 million, net of amounts previously accrued. The remaining amounts in-
cluded in “Other charges” in 2009, 2008 and 2007, primarily relate to restructuring charges (see Note 9,
“Restructuring” to the Consolidated Financial Statements).
(8) In January 2009, we issued $1.0 billion aggregate principal amount of notes due in 2019 (the “2019 Notes”)
and $1.0 billion aggregate principal amount of notes due in 2039 (the “2039 Notes”). In November 2009, we
repaid our $1.0 billion 4.00% notes.
(9) In May 2008, we issued $500 million aggregate principal amount of notes due in 2018 (the “2018 Notes”)
and $500 million aggregate principal amount of notes due in 2038 (the “2038 Notes”). In June and No-
vember 2008, we repaid our $2.0 billion of floating rate notes.
(10) On March 2, 2007, as a result of holders of substantially all of our outstanding 2032 Modified Convertible
Notes exercising their March 1, 2007 put option, we repurchased the majority of the then outstanding con-
vertible notes, at their then-accreted value of $1.7 billion. In May 2007, we issued $2.0 billion aggregate
principal amount of floating rate notes due in 2008, $1.1 billion aggregate principal amount of notes due in
2017 and $900 million aggregate principal amount of notes due in 2037. A total of $3.2 billion of the net
proceeds raised from the issuance of these notes were used to repurchase shares of our common stock under
an accelerated share repurchase program (“ASR”) entered into in May 2007.
(11) In February 2006, we issued $2.5 billion aggregate principal amount of convertible notes due in 2011 (the
“2011 Notes”) and $2.5 billion aggregate principal amount of convertible notes due in 2013 (the “2013
Notes”). In connection with the issuance of these notes, a total of $3.0 billion of our common stock was re-
purchased under our stock repurchase program. Also, concurrent with the issuance of these notes, we
purchased convertible note hedges in private transactions. The cost of the convertible note hedges, which
aggregated approximately $1.5 billion, was recorded as a reduction of equity. Also, concurrent with the
issuance of these notes, we sold warrants to acquire shares of our common stock. Proceeds received from
the issuance of the warrants totaled approximately $774 million.
(12) Throughout the five years ended December 31, 2009, we have had share repurchase programs authorized by
the Board of Directors through which we have repurchased $3.2 billion, $2.3 billion, $5.1 billion, $5.0 bil-
lion and $4.4 billion, respectively, of Amgen common stock.
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