Amgen 2010 Annual Report Download - page 95

Financing arrangements
The following table reflects the carrying value of our long-term borrowings under our various financing
arrangements as of December 31, 2010 and 2009 (dollar amounts in millions):
2010 2009
0.125% convertible notes due 2011 (2011 Convertible Notes) ..................... $ 2,488 $ 2,342
0.375% convertible notes due 2013 (2013 Convertible Notes) ..................... 2,213 2,088
5.85% notes due 2017 (2017 Notes) ........................................ 1,099 1,099
4.85% notes due 2014 (2014 Notes) ........................................ 1,000 1,000
5.70% notes due 2019 (2019 Notes) ........................................ 998 998
6.40% notes due 2039 (2039 Notes) ........................................ 996 995
6.375% notes due 2037 (2037 Notes) ....................................... 899 899
3.45% notes due October 2020 (October 2020 Notes) . . ......................... 897 —
5.75% notes due 2040 (2040 Notes) ........................................ 696 —
4.95% notes due 2041 (2041 Notes) ........................................ 595 —
6.15% notes due 2018 (2018 Notes) ........................................ 499 499
6.90% notes due 2038 (2038 Notes) ........................................ 499 499
4.50% notes due March 2020 (March 2020 Notes) ............................. 300 —
Other notes .......................................................... 183 182
Total borrowings .................................................... 13,362 10,601
Less current portion.................................................... (2,488) —
Total non-current debt ................................................ $10,874 $10,601
We issued debt securities in various offerings during the three years ended December 31, 2010, including: in
2010, $300 million principal amount of March 2020 Notes, $700 million principal amount of 2040 Notes,
$900 million principal amount of October 2020 Notes and $600 million principal amount of 2041 Notes; in 2009,
$1.0 billion principal amount of 2019 Notes and $1.0 billion principal amount of 2039 Notes; and in 2008,
$500 million principal amount of 2018 Notes and $500 million principal amount of 2038 Notes. Debt issuance costs
incurred in connection with these debt offerings totaled $17 million, $13 million and $6 million for debt issued in
2010, 2009 and 2008, respectively, and are being amortized over the respective lives of the notes.
All of these debt issuances as well as the 2017 Notes and the 2037 Notes may be redeemed at any time at our
option, in whole or in part, at the principal amount of the notes being redeemed plus accrued interest and a “make-
whole” amount, as defined. In the event of a change in control triggering event, as defined, we may be required to
purchase for cash all or a portion of these debt issuances at a price equal to 101% of the principal amount of the notes
plus accrued interest.
In 2009, we repaid $1.0 billion aggregate principal amount of notes with a fixed interest rate of 4.00% and in
2008, we repaid $2.0 billion aggregate principal amount of floating London Interbank Offered Rate (“LIBOR”)
based notes.
See Note 15, Financing arrangements to the Consolidated Financial Statements for further discussion of our
Convertible Notes.
To achieve a desired mix of fixed and floating interest rate debt, we enter into interest rate swap agreements
that effectively convert a fixed rate interest coupon to a floating LIBOR-based coupon over the life of the respective
note. These interest rate swap agreements qualify and are designated as fair value hedges. As of December 31, 2010
and 2009, we had interest rate swap agreements with an aggregate face value of $3.6 billion and $1.5 billion,
respectively. The effective rates on these swaps range from LIBOR plus 0.3% to LIBOR plus 2.6%. See Note 15,
Financing arrangements and Note 18, Derivative instruments to the Consolidated Financial Statements for further
discussion of our interest rate swap agreements.
79