Amgen 2009 Annual Report Download - page 138
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AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We used a Monte Carlo simulation model to estimate the grant date fair value of performance units granted
in 2009. We used a lattice model to estimate the grant date fair value of performance units granted in 2008 and
2007. The assumptions used in these models and the resulting grant date fair values of our performance units
were as follows for the years ended December 31, 2009, 2008 and 2007.
2009 2008 2007
Fair value of our common stock ........................................ $47.63 $ 44.62 $ 56.56
Fair value of unit .................................................... $48.22 $ 36.91 $ 71.41
Expected volatility .................................................. 34.3% 32.4% 28.1%
Risk-free interest rate ................................................ 1.2% 2.0% 4.0%
Expected dividend yield .............................................. 0% 0% 0%
For the year ended December 31, 2009, the Monte Carlo simulation model also assumed correlations of re-
turns of the stock prices of our common stock and the common stock of a comparator group of companies and
stock price volatilities of the comparator group of companies. The valuation models also use terms based on the
length of the performance period and compound annual growth rate goals for total stockholder return based on
the provisions of the award.
As of December 31, 2009, there was approximately $38 million of total estimated unrecognized compensa-
tion cost related to the 2009 and 2008 performance unit grants that is expected to be recognized over a weighted-
average period of approximately 1 year.
5. Income taxes
The provision for income taxes includes the following (in millions):
Years ended
December 31,
2009 2008 2007
Current provision:
Federal ............................................................. $325 $ 866 $467
State ............................................................... 85 82 40
Foreign ............................................................. 155 152 176
Total current provision ............................................. 565 1,100 683
Deferred provision (benefit):
Federal ............................................................. 92 (86) 61
State ............................................................... (59) (43) (30)
Foreign ............................................................. 1 (8) 1
Total deferred provision (benefit) .................................... 34 (137) 32
Total provision ............................................... $599 $ 963 $715
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