Amgen 2011 Annual Report Download - page 154

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Debt repayments
In February 2011, our 0.125% 2011 Convertible Notes became due, and we repaid the $2.5 billion aggregate
principal amount. As these convertible notes were cash settleable, their debt and equity components were
bifurcated and accounted for separately. The discounted carrying value of the debt component resulting from the
bifurcation was accreted back to the principal amount over the period the notes were outstanding. The total
aggregate amount repaid, including the amount related to the debt discount of $643 million resulting from the
bifurcation, is included in Cash flows from financing activities in the Consolidated Statement of Cash Flows. No
debt was due or repaid in 2010, and we repaid $1.0 billion aggregate principal amount of notes with a fixed
interest rate of 4.00% in 2009.
Debt issuances
We issued debt securities in various offerings during the three years ended December 31, 2011, including:
• In 2011, we issued $10.5 billion aggregate principal amount of notes, comprised of the 1.875% 2014
Notes, the 2.30% 2016 Notes, the 2.50% 2016 Notes, the 4.375% 2018 euro Notes (€550 million
aggregate principal amount), the 4.10% 2021 Notes, the 3.875% 2021 Notes, the 5.50% 2026 pound
sterling Notes (£475 million aggregate principal amount), the 5.15% 2041 Notes and the 5.65% 2042
Notes.
• In 2010, we issued $2.5 billion aggregate principal amount of notes, comprised of the 4.50% 2020
Notes, the 3.45% 2020 Notes, the 5.75% 2040 Notes and the 4.95% 2041 Notes.
• In 2009, we issued $2.0 billion aggregate principal amount of notes, comprised of the 5.70% 2019
Notes and the 6.40% 2039 Notes.
Debt issuance costs incurred in connection with these debt offerings in 2011, 2010 and 2009 totaled $55
million, $17 million and $13 million, respectively. These debt issuance costs are being amortized over the
respective lives of the notes, and the related charge is included in Interest expense, net, in the Consolidated
Statements of Income.
All of our debt issuances other than our 0.375% 2013 Convertible Notes and Other 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 addition, except with respect to our 0.375% 2013 Convertible
Notes, the 4.85% 2014 Notes and Other notes, 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.
Convertible Notes
In 2006, we issued $5.0 billion principal amount of convertible notes at par. While outstanding, the notes are
convertible into shares of our common stock upon the occurrence of specified events. In February 2011, $2.5
billion principal amount of the convertible notes (the 0.125% 2011 Convertible Notes) became due and were
repaid in full. While outstanding, the conversion rate on the 0.125% 2011 Convertible Notes was 12.5247 shares
per $1,000 principal amount of notes, which represented a conversion price of approximately $79.84 per share.
The conversion rate on the $2.5 billion principal amount of convertible notes, which mature in February 2013
(the 0.375% 2013 Convertible Notes), was 12.7473 shares per $1,000 principal amount of notes at December 31,
2011, which represents a conversion price of approximately $78.45 per share. This conversion rate is adjusted as
we make specified types of distributions, including paying cash dividends on our common stock, or enter into
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