Amgen 2012 Annual Report Download - page 78

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71
Operating
Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds. Cash
provided by operating activities increased during 2012 due primarily to the timing and amount of receipts from customers, an
increase in net income, timing of payments to vendors and taxing authorities, cash received in connection with the termination of
our interest rate swap agreements of $397 million and the impact of decreased inventory-related expenditures. These increases
were offset partially by a payment associated with the previously disclosed litigation settlement. Cash provided by operating
activities during 2011 decreased due primarily to increased interest payments, working capital increases related to the launch of
Prolia® and XGEVA® and the prepayment of certain royalties.
Investing
Capital expenditures, which were associated primarily with manufacturing capacity expansions in Ireland and Puerto Rico,
as well as other site developments, totaled $689 million, $567 million and $580 million in 2012, 2011 and 2010, respectively. We
currently estimate 2013 spending on capital projects and equipment to be approximately $700 million.
Cash used in investing activities during the years ended December 31, 2012 and 2011, also included the cost of acquiring
certain businesses, net of cash acquired, which totaled $2.4 billion and $701 million, respectively.
Net purchases of marketable securities were $6.9 billion for 2012, compared to net proceeds of $437 million for 2011 and
net purchases of $3.5 billion for 2010.
Financing
Cash provided by financing activities during 2012 was due to net proceeds from the issuance of long-term debt of $4.9
billion and net proceeds from the issuance of common stock in connection with the Company's equity award programs of $1.3
billion, offset partially by repurchases of our common stock of $4.6 billion and the payment of dividends of $1.1 billion. Cash
used in financing activities during 2011 was due to the repurchases of our common stock of $8.3 billion, including $5 billion
purchased in a modified Dutch auction tender offer in December 2011; repayment of long-term debt of $2.5 billion; and payment
of dividends of $500 million, offset partially by net proceeds from the issuance of long-term debt of $10.4 billion, including $7.5
billion issued in November and December 2011, in part, to finance the repurchase of our common stock in the modified Dutch
auction tender offer. Cash used in financing activities during 2010 was due to the repurchases of our common stock of $3.8 billion,
offset partially by the net proceeds from issuance of long-term debt of $2.5 billion.
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, 2012, 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) $ 44,885 $ 3,601 $ 4,114 $ 6,048 $ 31,122
Operating lease obligations 741 121 187 146 287
Purchase obligations (3) 2,921 832 681 393 1,015
Unrecognized tax benefits (UTBs) (4) — — — — —
Total contractual obligations $ 48,547 $ 4,554 $ 4,982 $ 6,587 $ 32,424