Amgen 2001 Annual Report Download - page 39

December 31, 2001 2000
Contractual maturity:
Maturing in one year or less $1,480.1 $ 783.6
Maturing after one year
through three years 785.2 986.1
Maturing after three years 302.7 180.5
Total debt securities 2,568.0 1,950.2
Equity securities 175.9 245.3
$2,743.9 $2,195.5
Classification in balance sheets:
Cash and cash equivalents $ 689.1 $ 226.5
Marketable securities 1,973.1 1,801.6
Other assets — noncurrent 215.9 285.3
2,878.1 2,313.4
Less cash (134.2) (117.9)
$2,743.9 $2,195.5
The primary objectives for the Company’s fixed
income investment portfolio are liquidity and safety of
principal. Investments are made to achieve the highest
rate of return to the Company, consistent with these
two objectives. The Company’s investment policy limits
investments to certain types of instruments issued by
institutions with investment grade credit ratings and
places restrictions on maturities and concentration by
type and issuer.
Inventories
Inventories are stated at the lower of cost or market. Cost
is determined in a manner which approximates the first-
in, first-out (FIFO) method. Inventories consist of cur-
rently marketed products and product candidates which
the Company expects to commercialize. The inventory
balance of such product candidates totaled $8.8 million
and $112.7 million as of December 31, 2001 and 2000,
respectively. Inventories are shown net of applicable
reserves and allowances. Inventories consisted of the
following (in millions):
December 31, 2001 2000
Raw materials $ 21.9 $ 29.4
Work in process 266.7 238.7
Finished goods 67.0 37.1
$355.6 $305.2
AMGEN 2001 ANNUAL REPORT
In the fourth quarter of 2001, the Company recorded
a charge of $39.5 million, included in cost of sales, to
write-off certain inventory deemed not recoverable.
Depreciation and amortization
Depreciation of buildings and equipment is provided
over their estimated useful lives on a straight-line basis.
Leasehold improvements are amortized on a straight-line
basis over the shorter of their estimated useful lives or
lease terms. Useful lives by asset category were as follows:
Asset category Years
Buildings and building improvements 10 – 30
Manufacturing equipment 5 – 10
Laboratory equipment 5 – 10
Furniture and office equipment 3 – 10
Long-lived assets
The Company reviews its long-lived assets for impair-
ment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not
be recoverable.
Product sales
Product sales primarily consist of sales of EPOGEN®
(Epoetin alfa), Aranesp™(darbepoetin alfa), and
NEUPOGEN®(Filgrastim) (see Note 10, “Segment
information”).
The Company has the exclusive right to sell Epoetin
alfa for dialysis, certain diagnostics and all non-human,
non-research uses in the United States. The Company
sells Epoetin alfa under the brand name EPOGEN®.
Amgen has granted to Ortho Pharmaceutical Corporation
(which has assigned its rights under the product license
agreement to Ortho Biotech Products, L.P.), a subsidiary
of Johnson & Johnson (“Johnson & Johnson”), a license
relating to Epoetin alfa for sales in the United States for
all human uses except dialysis and diagnostics. Pursuant
to this license, the Company and Johnson & Johnson
are required to compensate each other for Epoetin alfa
sales that either party makes into the other party’s exclu-
sive market, sometimes referred to as “spillover” sales.
Accordingly, Amgen does not recognize product sales it
makes into the exclusive market of Johnson & Johnson
and does recognize the product sales made by Johnson
& Johnson into Amgen’s exclusive market. Sales in
Amgen’s exclusive market are derived from the
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