Amgen 2012 Annual Report Download - page 130

F-31
2011 Convertible Notes became due, and we repaid the $2.5 billion aggregate principal amount. No debt was due or repaid in
2010.
Debt issuances
We issued debt securities in various offerings during the three years ended December 31, 2012, including:
• In 2012, we issued $5.0 billion aggregate principal amount of notes, comprised of the 2.125% 2017 Notes, the 2.125%
2019 euro Notes (€675 million aggregate principal amount), the 3.625% 2022 Notes, the 4.00% 2029 pound sterling
Notes (£700 million aggregate principal amount) and the 5.375% 2043 Notes.
• 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.
Debt issuance costs incurred in connection with these debt offerings in 2012, 2011 and 2010 totaled $25 million, $55 million
and $17 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 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 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, including the 0.125% 2011 Convertible Notes
and the 0.375% 2013 Convertible Notes. While outstanding, these notes were convertible into shares of our common stock upon
the occurrence of specified events. The conversion rate on the $2.5 billion principal amount of the 0.375% 2013 Convertible Notes
was 12.8809 shares per $1,000 principal amount of notes at December 31, 2012, which represents a conversion price of
approximately $77.63 per share. While these notes were outstanding, this conversion rate was adjusted for certain transactions
with respect to our common stock, including payment of cash dividends. Prior to their maturity, the 0.375% 2013 Convertible
Notes could only be converted: (i) during any calendar quarter if the closing price of our common stock exceeded 130% of the
then conversion price per share during a defined period at the end of the previous quarter, (ii) if we made specified distributions
to holders of our common stock or specified corporate transactions occurred or (iii) within one month prior to the maturity date.
Upon conversion, a holder would receive the conversion value equal to the conversion rate multiplied by the volume weighted-
average price of our common stock during a specified conversion period following the conversion date. The conversion value was
payable in: (i) cash equal to the lesser of the principal amount of the note or the conversion value, as defined, and (ii) cash, shares
of our common stock, or a combination of cash and shares of our common stock, at our option, to the extent the conversion value
exceeded the principal amount of the note (the excess conversion value). In February 2013, our 0.375% 2013 Convertible Notes
matured/converted, and accordingly, the $2.5 billion principal amount was settled in cash. We also elected to pay the note holders
who converted their notes $99 million of cash for the excess conversion value, as allowed by the original terms of the notes.
Concurrent with the issuance of the 0.375% 2013 Convertible Notes in February 2006, we purchased a convertible note
hedge. The convertible note hedge allowed us to receive shares of our common stock and/or cash from the counterparty to the
transaction equal to the amounts of common stock and/or cash related to the excess conversion value that we would issue and/or
pay to the holders of the 0.375% 2013 Convertible Notes upon conversion. As a result of the conversion of the 0.375% 2013
Convertible Notes, we received $99 million of cash from the counterparty to offset the corresponding amount paid to the note
holders. We also purchased a convertible note hedge with similar terms in connection with the issuance of the 0.125% 2011
Convertible Notes, which terminated unexercised when these notes were repaid.
Also concurrent with the issuance of the 0.375% 2013 Convertible Notes, we sold warrants to acquire 31.5 million shares
of our common stock in May 2013 (the settlement date) that have an exercise price of $105.48 per share as of December 31, 2012.
If the average price of our common stock during a defined period ending on or about the settlement date exceeds the exercise price
of the warrants, the warrants will be net settled, at our option, in cash or shares of our common stock. In connection with the