Amgen 2013 Annual Report Download - page 118

of the respective notes. During the year ended December 31, 2013, we entered into interest rate swap contracts with an aggregate notional amount of $4.4 billion
with respect to our 3.45% 2020 Notes, 4.10% 2021 Notes, 3.875% 2021 Notes and 3.625% 2022 Notes. The contracts have rates that range from three-month
LIBOR plus 1.1% to three-month LIBOR plus 2.0%. In addition, we previously had interest rate swap contracts outstanding with an aggregate notional amount
of $3.6 billion with respect to our 4.85% 2014 Notes, 5.85% 2017 Notes, 6.15% 2018 Notes and 5.70% 2019 Notes with rates that ranged from LIBOR
0.3% to LIBOR plus 2.6%. Due to historically low interest rates, in May 2012 we terminated all of these contracts resulting in the receipt of $397 million from
the counterparties, which was included in Net cash provided by operating activities in the Consolidated Statements of Cash Flows. This amount is being
recognized in Interest expense, net in the Consolidated Statements of Income over the remaining lives of the related debt issuances.
For derivative instruments that are designated and qualify as fair value hedges, the unrealized gain or loss on the derivative resulting from the change in
fair value during the period as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period
attributable to the hedged risk is recognized in current earnings. During the year ended December 31, 2013, we included the unrealized gains on the hedged debt
of $161 million in the same line item, Interest expense, net, in the Consolidated Statement of Income, as the offsetting unrealized losses of $161 million on the
related interest rate swap agreements. During the years ended December 31, 2012 and 2011, we included the unrealized losses on the hedged debt of $20
million and $182 million, respectively, in the same line item, Interest expense, net, in the Consolidated Statements of Income, as the offsetting unrealized gains
of $20 million and $182 million, respectively, on the related interest rate swap agreements.
Derivatives not designated as hedges
We enter into foreign currency forward contracts that are not designated as hedging transactions to reduce our exposure to foreign currency fluctuations
of certain assets and liabilities denominated in foreign currencies. These exposures are hedged on a month-to-month basis. As of December 31, 2013, 2012 and
2011, the total notional amounts of these foreign currency forward contracts were $999 million, $629 million and $389 million, respectively.
The location in the Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated
as hedging instruments were as follows (in millions):






Foreign currency contracts
Interest and other income, net
$15
$19
$(1)
F-42