Amgen 2015 Annual Report Download - page 89

F-11
In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial
instruments, including a provision that requires equity investments (except for investments accounted for under the equity method
of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective
for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will
have on our consolidated financial statements.
Reclassifications
Certain of our short-term obligations were reclassified from Accounts payable to Accrued liabilities on our Consolidated
Balance Sheet at December 31, 2014, and related amounts within Net cash provided by operating activities in our Consolidated
Statements of Cash Flows for the years ended December 31, 2014 and 2013, to conform to the current year presentation.
2. Restructuring and other cost savings initiatives
During the second half of 2014, we initiated a restructuring plan to invest in continuing innovation and the launch of our
new pipeline molecules, while improving our cost structure. As part of the plan, we are closing our facilities in Washington state
and Colorado and reducing the number of buildings we occupy at our headquarters in Thousand Oaks, California, as well as at
other locations.
We estimate that we will incur $800 million to $900 million of pre-tax charges in connection with our restructuring plan,
including: (i) separation and other headcount-related costs of $535 million to $585 million with respect to staff reductions, and
(ii) asset-related charges of $265 million to $315 million consisting primarily of asset impairments, accelerated depreciation and
other related costs resulting from the consolidation of our worldwide facilities. We incurred a total of $478 million of separation
and other headcount-related costs and $194 million of net asset-related charges through December 31, 2015.
During the years ended December 31, 2015 and December 31, 2014, we incurred restructuring costs of $114 million and
$558 million, respectively. We expect that we will incur most of the remaining estimated costs, as discussed above, in 2016 and
2017 in order to support our ongoing transformation and process improvement efforts.
The following table summarizes the charges recorded related to the restructuring plan by type of activity and the locations
recognized within the Consolidated Statements of Income (in millions):
During the year ended December 31, 2015
Separation
Costs
Asset
Impairments/
Disposals
Accelerated
Depreciation Other Total
Cost of sales $ — $ — $ 50 $ 2 $ 52
Research and development — — 36 28 64
Selling, general and administrative — — 14 42 56
Other 49 (111)— 4(58)
Total $ 49 $ (111) $ 100 $ 76 $ 114
During the year ended December 31, 2014
Separation
Costs
Asset
Impairments
Accelerated
Depreciation Other Total
Cost of sales $ — $ 81 $ 23 $ — $ 104
Research and development — — 28 21 49
Selling, general and administrative — —459
Other 377 6 — 13 396
Total $ 377 $ 87 $ 55 $ 39 $ 558
We recognized asset impairment and accelerated depreciation charges in connection with our decision to exit Boulder and
Longmont, Colorado, and Bothell and Seattle, Washington, and in connection with the consolidation of facilities in Thousand
Oaks, California. The decision to close these manufacturing and R&D facilities was based principally on optimizing the utilization
of our sites in the United States, which includes an expansion of our presence in the key U.S. biotechnology hubs of South San