Amgen 2011 Annual Report Download - page 99

See Note 14, Financing arrangements, and Note 15, Stockholders’ equity, to the Consolidated Financial
Statements for further discussion.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are material or reasonably likely to become
material to our consolidated financial position or consolidated results of operations.
Contractual Obligations
Contractual obligations represent future cash commitments and liabilities under agreements with third
parties, and exclude contingent liabilities for which we cannot reasonably predict future payment. Additionally,
the expected timing of payment of the obligations presented below is estimated based on current information.
Timing of payments and actual amounts paid may be different depending on the timing of receipt of goods or
services or changes to agreed-upon terms or amounts for some obligations.
The following table represents our contractual obligations as of December 31, 2011, aggregated by type (in
millions):
Payments due by period
Year Years Years Years
Contractual obligations Total 1 2 and 3 4 and 5 6 and beyond
Long-term debt obligations (1) (2) (3) ..................... $37,521 $ 888 $6,131 $3,396 $27,106
Operating lease obligations ........................... 774 116 189 141 328
Purchase obligations (4) .............................. 2,992 865 420 243 1,464
Unrecognized tax benefits (5) .......................... ———— —
Total contractual obligations ....................... $41,287 $1,869 $6,740 $3,780 $28,898
(1) The long-term debt obligation amounts also include future interest payments. Future interest payments are
included on our financing arrangements at the fixed contractual coupon rates. To achieve a desired mix of
fixed and floating interest rate debt, we enter into interest rate swap contracts that effectively convert a fixed
rate interest coupon for certain of our debt issuances to a floating LIBOR-based coupon over the life of the
respective note. We used an interest rate forward curve at December 31, 2011, in computing net amounts to
be paid or received under our interest rate swap contracts which resulted in an aggregate net reduction in
future interest payments of $366 million. See Note 14, Financing arrangements, to the Consolidated
Financial Statements for further discussion of our interest swap contracts.
(2) In order to hedge our exposure to foreign currency exchange rate risk associated with our pound sterling
denominated long-term debt issued in December 2011, we entered into cross currency swap contracts that
effectively convert interest payments and principal repayment on this debt from pounds sterling to U.S.
dollars. For purposes of this table, we used the contracted exchange rates in the cross currency swap
contracts to compute the net amounts of future interest and principal payments and on this debt. See Note
14, Financing arrangements, to the Consolidated Financial Statements for further discussion of our cross
currency swap contracts.
(3) The long-term debt obligations amounts include the repayment of principal on our euro denominated foreign
currency debt at the foreign currency exchange rates in effect at December 31, 2011. See Note 14, Financing
arrangements, to the Consolidated Financial Statements for further discussion of our long-term debt obligations.
(4) Purchase obligations relate primarily to (i) our long-term supply agreements with third-party manufacturers,
which are based on firm commitments for the purchase of production capacity; (ii) R&D commitments
(including those related to clinical trials) for new and existing products; (iii) capital expenditures; and
(iv) open purchase orders for the acquisition of goods and services in the ordinary course of business. Our
obligation to pay certain of these amounts may be reduced based on certain future events.
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