Amgen 2002 Annual Report Download - page 44

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Page 42
AMGEN 2002 ANNUAL REPORT
The Company is exposed to equity price risks on the
marketable portion of equity securities included in its port-
folio of investments entered into for the promotion of busi-
ness and strategic objectives. These investments are generally
in small capitalization stocks in the biotechnology indus-
try sector. In 2001, the Company entered into equity for-
ward contracts to hedge against changes in the fair market
value of a portion of its equity investment portfolio. At
December 31, 2002 and 2001, the fair value of the unhedged
portion of its equity securities was $82.8 million and $133.4
million, respectively. For the years ended December 31,
2002 and 2001, an adverse change in equity prices of 45%
would result in a decrease of approximately $37.3 million
and $60.0 million, respectively, in the fair value of the
unhedged portion of the Company’s equity securities. Price
volatility for equity investments is based on the volatility
of a relevant market index for small capitalization stocks in
the biotechnology sector.
The Company did not have material exposures to
changes in foreign currency exchange rates related to its for-
eign currency forward contracts outstanding at December 31,
2002 and 2001.