Amgen 2010 Annual Report Download - page 86

The increase in our U.S. product sales for 2010 reflects overall growth for all of our marketed products, except
for our ESA products, which declined 5%. The growth in sales of our non-ESA products reflects increases primarily
in average net sales prices and, to a lesser extent, favorable changes in wholesaler inventories. U.S. product sales in
2010 were unfavorably impacted by $198 million as a result of the recently enacted U.S. healthcare reform law.
The increase in our international product sales for 2010 reflects overall growth for all of our marketed
products, except for Aranesp», which declined 1%.
The increase in other revenues for 2010 was due primarily to milestone payments earned from Glaxo in
connection with certain commercial milestones for Prolia»in the EU and from Takeda in connection with certain
regulatory milestones for Vectibix»in Japan.
The increase in operating expenses for 2010 was due principally to higher cost of sales, due primarily to higher
bulk manufacturing costs, as well as higher selling, general and administrative (“SG&A”) expenses, due primarily
to increased promotional costs for Prolia»and our other marketed products.
Net income was relatively unchanged in 2010 as the increases in operating income, discussed above, and
interest and other income were offset substantially by an increase in our provision for income taxes. The increase in
interest and other income was due primarily to higher net realized gains on sales of investments and higher interest
income. The increase in our provision for income taxes was due principally to reduced benefits resulting from
settlements with tax authorities in 2010.
The increase in diluted EPS for 2010 principally reflects a reduction in our weighted-average shares used to
compute diluted EPS resulting from our stock repurchase program, including approximately 67 million shares
repurchased in 2010 at a total cost of $3.8 billion.
Although changes in foreign currency rates result in increases or decreases in our reported international
product sales, the benefit or detriment that such movements have on our international product sales is offset partially
by corresponding increases or decreases in our international operating expenses and our related foreign currency
hedging activities. Our hedging activities seek to offset the impact, both positive and negative, that foreign currency
exchange rate changes may have on our net income by hedging our net foreign currency exposure, primarily with
respect to product sales denominated in the Euro.
As of December 31, 2010, our cash, cash equivalents and marketable securities totaled $17.4 billion, and total
debt outstanding was $13.4 billion, including $2.5 billion which was repaid in February 2011. Of our total cash,
cash equivalents and marketable securities balance as of December 31, 2010, approximately $15.1 billion was
generated from operations in foreign tax jurisdictions and is intended to be invested indefinitely outside of the
United States. Under current tax laws, if those funds were repatriated for use in our U.S. operations, we would be
required to pay additional U.S. federal and state income taxes at the applicable marginal tax rates.
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