Amgen 2015 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2015 Amgen annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

51
Certain of our financing arrangements contain non-financial covenants. In addition, our revolving credit agreement and
Term Loan Credit Facility each includes a financial covenant with respect to the level of our borrowings in relation to our equity,
as defined. We were in compliance with all applicable covenants under these arrangements as of December 31, 2015.
See Part IV—Note 14, Financing arrangements, to the Consolidated Financial Statements for further discussion of our
financing arrangements.
Cash flows
A summary of our cash flow activity was as follows (in millions):
Years ended December 31,
2015 2014 2013
Net cash provided by operating activities $ 9,077 $ 8,555 $ 6,291
Net cash used in investing activities (5,547)(5,752)(8,469)
Net cash (used in) provided by financing activities (3,117)(2,877) 2,726
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 2015 due primarily to improvement in our operating margin and the effective
termination of foreign currency contracts that resulted in the receipt of $340 million in cash, offset by the timing of payment to
vendors and cash received from customers. Cash provided by operating activities increased during 2014 due primarily to higher
revenues, higher operating income, including the impact of the expiration of the ENBREL co-promotion term on October 31,
2013, and improvements in working capital.
Investing
Capital expenditures, which were associated primarily with manufacturing capacity expansions in Singapore, Puerto Rico
and Ireland, as well as other site developments, totaled $594 million, $718 million and $693 million in 2015, 2014 and 2013,
respectively. We currently estimate 2016 spending on capital projects and equipment to be approximately $700 million.
Cash used in investing activities during the years ended December 31, 2015, 2014 and 2013, also included the cost of acquiring
certain businesses, net of cash acquired, which totaled $359 million, $165 million and $9.4 billion, respectively. In addition, during
the year ended December 31, 2015 and 2014, $55 million and $285 million, respectively, was used to purchase intangible assets.
Net activity related to marketable securities and restricted investments used $4.4 billion in 2015 and 2014, and provided
$1.7 billion in 2013.
Financing
Cash used in financing activities during 2015 was due primarily to the repayment of long-term debt of $2.4 billion, the
payment of dividends of $2.4 billion, repurchases of our common stock of $1.9 billion and the settlement of obligations incurred
in connection with the acquisitions of businesses of $253 million. These payments were offset partially by net proceeds from the
issuance of long-term debt of $3.5 billion. Cash used in financing activities during 2014 was due primarily to the repayment of
long-term debt of $5.6 billion, the payment of dividends of $1.9 billion and repurchases of our common stock of $138 million.
These payments were offset partially by net proceeds from the issuance of long-term debt of $4.5 billion and net proceeds from
the issuance of common stock in connection with the Company’s equity award programs of $186 million. Cash provided by
financing activities during 2013 was due primarily to net proceeds from the issuance of long-term debt of $8.1 billion and net
proceeds from the issuance of common stock in connection with the Company’s equity award programs of $296 million. These
receipts were offset partially by the repayment of long-term debt of $3.4 billion, the payment of dividends of $1.4 billion and
repurchases of our common stock of $832 million.
See Part IV—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.