Amgen 2011 Annual Report Download - page 87

Although changes in foreign currency exchange 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 impacts, 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.
Our results of operations for 2011 were impacted by the Puerto Rico excise tax. Commencing January 1,
2011, Puerto Rico imposes a temporary excise tax on the acquisition of goods and services from a related
manufacturer in Puerto Rico. This tax is currently scheduled to expire in 2016. We account for the excise tax as a
manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are
sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in
our provision for income taxes in the year in which the excise tax is incurred. This excise tax has had and will
continue to have a significant adverse impact on our cost of sales and a significant favorable impact on our
provision for income taxes. In addition, the overall impact of the excise tax will vary from period to period as a
result of the timing difference between recognizing the expense and the applicable foreign tax credit. As a result
of the excise tax, for 2011 cost of sales increased by $211 million, the provision for income taxes was reduced by
$321 million and EPS was favorably impacted by $0.12.
As of December 31, 2011, our cash, cash equivalents and marketable securities totaled $20.6 billion, and
total debt outstanding was $21.4 billion. Of our total cash, cash equivalents and marketable securities balance as
of December 31, 2011, approximately $16.9 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 these funds
were repatriated for use in our U.S. operations, we would be required to pay additional income taxes at the tax
rates then in effect.
Results of Operations
Product sales
Worldwide product sales were as follows (dollar amounts in millions):
2011 Change 2010 Change 2009
Neulasta®/NEUPOGEN®.............................. $ 5,212 8 % $ 4,844 4 % $ 4,643
ENBREL ........................................... 3,701 5 % 3,534 1 % 3,493
Aranesp®........................................... 2,303 (7)% 2,486 (6)% 2,652
EPOGEN®.......................................... 2,040 (19)% 2,524 (2)% 2,569
Other products ....................................... 2,039 60 % 1,272 28 % 994
Total product sales ............................... $15,295 4 % $14,660 2 % $14,351
Total U.S. .......................................... $11,725 4 % $11,254 1 % $11,135
Total International .................................... 3,570 5 % 3,406 6 % 3,216
Total product sales ............................... $15,295 4 % $14,660 2 % $14,351
Product sales are influenced by a number of factors, some of which may impact the sales of certain of our
existing products more significantly than others, including, but not necessarily limited to:
• our contracting and pricing strategies;
• recent and future reimbursement changes resulting from:
Ogovernmental or private organization regulations or guidelines relating to the use of our products;
Olegislative reform in federal, state and foreign jurisdictions;
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