Amgen 2010 Annual Report Download - page 103

$670 million on this date and, in the ensuing year, a reduction in income and cash flows of approximately
$330 million. With regard to contracts that were open at December 31, 2009 a hypothetical 20% adverse movement
in foreign exchange rates compared with the U.S. dollar relative to exchange rates at December 31, 2009 would
have resulted in a reduction in fair value of these contracts of approximately $720 million on this date and, in the
ensuing year, a reduction in income and cash flows of approximately $330 million.
Also at December 31, 2010 and 2009, we had open foreign currency forward contracts with notional amounts
totaling $670 million and $414 million, respectively, that hedged fluctuations of certain assets and liabilities
denominated in foreign currencies but were not designated as hedges for accounting purposes. These contracts had
no material net unrealized gains or losses at December 31, 2010 and 2009. With regard to these foreign currency
forward contracts that were open at December 31, 2010 and 2009, a hypothetical 20% adverse movement in foreign
exchange rates compared with the U.S. dollar relative to exchange rates at December 31, 2010 and 2009, would have
resulted in a reduction in fair value of these contracts on these dates of $134 million and $83 million, respectively,
and would not result in a material effect on the related income or cash flows in the respective ensuing year.
The analysis above does not consider the impact that hypothetical changes in foreign currency exchange rates
would have on anticipated transactions or on assets and liabilities that these foreign currency sensitive instruments
were designed to offset.
Market price sensitive instruments
As of December 31, 2010 and 2009, we were also exposed to price risk on equity securities included in our
portfolio of investments, which were acquired primarily for the promotion of business and strategic objectives.
These investments are generally in small capitalization stocks in the biotechnology industry sector. Price risk
relative to our equity investment portfolio at December 31, 2010 and 2009 was not material.
Counterparty credit risks
Our financial instruments, including derivatives, are subject to counterparty credit risk which we consider as
part of the overall fair value measurement. We attempt to mitigate that risk through credit monitoring procedures.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference to the financial statements and
schedule listed in Item 15(a)1 and (a)2 of Part IV and included in this Form 10-K Annual Report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
Item 9A. CONTROLS AND PROCEDURES
We maintain “disclosure controls and procedures,” as such term is defined under Exchange Act
Rule 13a-15(e), that are designed to ensure that information required to be disclosed in Amgen’s Exchange
Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules
and forms, and that such information is accumulated and communicated to Amgen’s management, including its
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosures. In designing and evaluating the disclosure controls and procedures, Amgen’s management recognized
that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives and in reaching a reasonable level of assurance Amgen’s management
necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and
procedures. We have carried out an evaluation under the supervision and with the participation of our management,
including Amgen’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and
operation of Amgen’s disclosure controls and procedures. Based upon their evaluation and subject to the foregoing,
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