Amgen 2009 Annual Report Download - page 154

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2014 Notes
At December 31, 2009 and 2008, we had outstanding $1.0 billion aggregate principal amount of notes with a
fixed interest rate of 4.85% due 2014 (the “2014 Notes”).
2019 Notes and 2039 Notes
In January 2009, we issued $1.0 billion aggregate principal amount of notes due in 2019 (the “2019 Notes”)
and $1.0 billion aggregate principal amount of notes due in 2039 (the “2039 Notes”) in a registered offering. The
2019 Notes and the 2039 Notes pay interest at fixed annual rates of 5.70% and 6.40%, respectively. The 2019
Notes and the 2039 Notes may be redeemed at any time at our option, in whole or in part, at 100% of the princi-
pal amount of the notes being redeemed plus accrued and unpaid interest, if any, and a “make-whole” amount, as
defined. Upon the occurrence of a change in control triggering event, as defined, we may be required to purchase
for cash all or a portion of the 2019 Notes and the 2039 Notes at a price equal to 101% of the principal amount of
the notes plus accrued interest. Debt issuance costs totaled approximately $13 million and are being amortized
over the lives of the notes.
2018 Notes and 2038 Notes
In May 2008, we issued $500 million aggregate principal amount of notes due in 2018 (the “2018 Notes”)
and $500 million aggregate principal amount of notes due in 2038 (the “2038 Notes”) in a registered offering.
The 2018 Notes and 2038 Notes pay interest at fixed annual rates of 6.15% and 6.90%, respectively. The 2018
Notes and 2038 Notes may be redeemed at any time at our option, in whole or in part, at 100% of the principal
amount of the notes being redeemed plus accrued interest and a “make-whole” amount, as defined. In the event
of a change in control triggering event, as defined, we may be required to purchase for cash all or a portion of the
2018 Notes and 2038 Notes at a price equal to 101% of the principal amount of the notes plus accrued interest.
Debt issuance costs totaled approximately $6 million and are being amortized over the life of the notes.
2032 Modified Convertible Notes
In 2002, we issued zero-coupon 30 year convertible notes (“2032 Convertible Notes”) with an aggregate
face amount of $4.0 billion and yield to maturity of 1.125% which resulted in an original issue discount of $1.1
billion. The holders of the 2032 Convertible Notes had the right to require us to repurchase all or a portion of
their notes at various put dates, including March 1, 2005 when we were required to repurchase $1.6 billion ag-
gregate principal amount of 2032 Convertible Notes for their then-accreted value of $1.2 billion in cash.
In 2005, we exchanged new zero-coupon convertible notes (the “2032 Modified Convertible Notes”) and a
cash payment of approximately $6 million for the remaining 2032 Convertible Notes then outstanding. Because
the 2032 Modified Convertible Notes may be partially or wholly settled in cash, they are subject to the new con-
vertible debt accounting standard discussed above. The additional discount on the 2032 Modified Convertible
Notes recognized pursuant to the retrospective application of this new accounting standard (in excess of the dis-
count recognized under the contractual terms of these securities) was amortized as non-cash interest expense
from the date the 2032 Modified Convertible Notes were issued to March 1, 2006, the date when the notes were
expected to be put back to us. We repurchased substantially all of the outstanding 2032 Modified Convertible
Notes on March 2, 2007 at their then accreted value of $1.7 billion.
We continue to recognize interest expense for the amortization of the discount based on the contractual rate
for the 2032 Modified Convertible Notes that remain outstanding. For years ended December 31, 2009, 2008 and
2007, amortization of the discount for the 2032 Modified Convertible Notes was approximately $1 million, $1
million and $4 million, respectively. As of December 31, 2009 and 2008, the equity component of the 2032
Modified Convertible Notes was approximately $29 million.
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