Amgen 2001 Annual Report Download - page 44

December 31, 2001 2000
Deferred tax assets:
Expense accruals $ 105.2 $ 32.9
Expenses capitalized for tax purposes 70.6 58.9
Acquired net operating loss and
credit carryforwards 45.4 66.0
Credit carryforwards 39.4 15.0
Fixed assets 29.3 46.0
Other 54.2 16.4
Total deferred tax assets 344.1 235.2
Valuation allowance (19.6) (25.4)
Net deferred tax assets 324.5 209.8
Deferred tax liabilities:
Purchase of technology rights (85.9) (95.9)
Marketable securities and investments (70.4) (74.0)
Other (12.5) (39.3)
Total deferred tax liabilities (168.8) (209.2)
$ 155.7 $ 0.6
At December 31, 2001, the Company had operating
loss carryforwards of $99.3 million available to reduce
future federal taxable income which will begin expiring
in 2008. The Company also had $10.6 million of credit
carryforwards against which a partial valuation allowance
was established. These operating loss and credit carryfor-
wards relate to the acquisition of companies.
The provision for income taxes varies from income
taxes provided based on the federal statutory rate as
follows:
Years ended December 31, 2001 2000 1999
Statutory rate applied to
income before income
taxes 35.0% 35.0% 35.0%
Benefit of Puerto Rico
operations, net of Puerto
Rico income taxes (1.7)% (2.0)% (2.3)%
Utilization of tax credits,
primarily research and
experimentation (1.3)% (1.4)% (2.1)%
Other, net 1.6% 0.4% (0.6)%
33.6% 32.0% 30.0%
Income taxes paid during the years ended December
31, 2001, 2000, and 1999, totaled $516.2 million,
$141.3 million, and $318.7 million, respectively.
AMGEN 2001 ANNUAL REPORT
Note 6: Stockholders’ equity
Stockholder Rights Agreement
On February 18, 1997, the Board of Directors of the
Company redeemed the rights under the Company’s for-
mer common stock rights plan and declared a dividend of
one preferred share purchase right (a “Right”) for each
then outstanding share of common stock of the Company
and authorized the distribution of one Right with respect
to each subsequently issued share of common stock. The
Rights were distributed to stockholders of record on
March 21, 1997. On December 12, 2000, the Board of
Directors of the Company amended and restated the
preferred stock rights plan governing the Rights (the
“Amended and Restated Rights Plan”) to, among other
things: (i) provide that, as a result of two-for-one splits of
the Company’s common stock effected in February and
November 1999 (the “Stock Splits”), each Right shall
represent the right to purchase one four-thousandth of a
share of Series A Junior Participating Preferred Stock
(“Series A Preferred Stock”) of the Company (which one
four-thousandth gives effect to the Stock Splits); (ii)
increase the exercise price of each Right to $350.00 from
$56.25 (as adjusted for the Stock Splits); (iii) extend the
term of the rights agreement to December 12, 2010
from March 21, 2007, and (iv) amend the definition of
“Outside Director”.
Pursuant to the Amended and Restated Rights Plan,
each share of common stock outstanding has attached
to it one whole Right. One Right represents the right
to purchase one four-thousandth (1/4000) of a share of
Series A Preferred Stock of the Company at $350.00.
The Rights will expire on December 12, 2010.
Under certain circumstances, if an acquiring person
or group acquires 10% or more of the Company’s out-
standing common stock, an exercisable Right will entitle
its holder (other than the acquirer) to buy shares of com-
mon stock of the Company having a market value of two
times the exercise price of one Right. However, in lim-
ited circumstances approved by the outside directors of
the Board of Directors, a stockholder who enters into an
acceptable standstill agreement may acquire up to 20%
of the outstanding shares without triggering the Rights.
If an acquirer acquires at least 10%, but less than 50%,
of the Company’s common stock, the Board of Directors
may exchange each Right (other than those of the
acquirer) for one share of common stock per Right. In
addition, under certain circumstances, if the Company
is involved in a merger or other business combination
where it is not the surviving corporation, an exercisable
Right will entitle its holder to buy shares of common
42