Amgen 2013 Annual Report Download - page 55

2012. See Note 14, Financing arrangements, and Note 17, Derivative instruments, to the Consolidated Financial Statements for further discussion of our
interest rate swap contracts.
To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term notes denominated in foreign currencies, we entered
into cross-currency swap contracts, which effectively convert the interest payments and principal repayment of the respective notes from euros/pounds sterling
to U.S. dollars. These cross-currency swap contracts qualify and are designated as cash flow hedges. As of December 31, 2013 and 2012, we had cross-
currency swap contracts with aggregate notional amounts of $2.7 billion. See Note 17, Derivative instruments, to the Consolidated Financial Statements for
further discussion of our cross-currency swap contracts.
As of December 31, 2013, we have a commercial paper program that allows us to issue up to $2.5 billion of unsecured commercial paper to fund our
working capital needs. At December 31, 2013 and 2012, we had no amounts outstanding under our commercial paper program.
In December 2011, we entered into a $2.5 billion syndicated, unsecured, revolving credit agreement which is available for general corporate purposes or
as a liquidity backstop to our commercial paper program. The commitments under the revolving credit agreement may be increased by up to $500 million
with the agreement of the banks. Each bank which is a party to the agreement has an initial commitment term of five years. This term may be extended for up
to two additional one-year periods with the agreement of the banks. Annual commitment fees for this agreement are 0.1% based on our current credit rating.
Generally, we would be charged interest at LIBOR plus 0.9% for any amounts borrowed under this facility. As of December 31, 2013 and 2012, no amounts
were outstanding under this facility.
In March 2011, we filed a shelf registration statement with the SEC which allows us to issue unspecified amounts of debt securities; common stock;
preferred stock; warrants to purchase debt securities, common stock, preferred stock or depository shares; rights to purchase common stock or preferred
stock; securities purchase contracts; securities purchase units; and depository shares. Under this shelf registration statement, all of the securities available for
issuance may be offered from time to time with terms to be determined at the time of issuance. This shelf registration statement expires in March 2014 and is
expected to be renewed before its expiration date.
In 1997, we established a $400 million medium-term note program under which medium-term debt securities may be offered from time to time with
terms to be determined at the time of issuance. As of December 31, 2013 and 2012, no securities were outstanding under this medium-term note program.
Certain of our financing arrangements contain non-financial covenants. In addition, our revolving credit agreement and Term Loan Credit Facility each
includes a financial covenant with respect to the level of our borrowings in relation to our equity, as defined. We were in compliance with all applicable
covenants under these arrangements as of December 31, 2013.
See Note 14, Financing arrangements, to the Consolidated Financial Statements for further discussion of our financing arrangements.
Cash flows
A summary of our cash flow activity was as follows (in millions):



Net cash provided by operating activities $6,291
$5,882
$5,119
Net cash used in investing activities (8,469)
(9,990)
(786)
Net cash provided by (used in) financing activities 2,726
419
(674)
Operating
Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds. Cash provided by operating
activities increased during 2013 due primarily to the 2012 impacts of the payment associated with a previously disclosed litigation settlement and higher
payments to taxing authorities, offset partially by cash receipts in 2012 of $397 million in connection with the termination of interest rate swap agreements
and $197 million received under a government-funded program in Spain with regard to trade receivables. Cash provided by operating activities increased
during 2012 compared with 2011 due primarily to the timing and amount of receipts from customers, timing of payments to vendors and taxing authorities,
cash received in connection with the termination of our interest rate swap agreements discussed above and the impact of decreased inventory-related
expenditures. These increases were offset partially by a payment associated with the previously disclosed litigation settlement.
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