Amgen 2013 Annual Report Download - page 97

Because the American Taxpayer Relief Act of 2012 was not enacted until 2013, certain provisions of the Act benefiting the Company's 2012 federal
taxes, including the retroactive extension of the R&D tax credit for 2012, were not recognized in the Company's 2012 financial results and instead are reflected
in the Company's 2013 financial results. The tax benefit of the retroactive extension of the 2012 R&D tax credit that was recognized in 2013 was $70 million.
Income taxes paid during the years ended December 31, 2013, 2012 and 2011, totaled $321 million, $502 million and $595 million, respectively.
One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions.
Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes may arise with these tax authorities involving
issues of the timing and amount of deductions, the use of tax credits and allocations of income among various tax jurisdictions because of differing
interpretations of tax laws and regulations. We are no longer subject to U.S. federal income tax examinations for tax years ending on or before December 31,
2009, or to California state income tax examinations for tax years ending on or before December 31, 2005.
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The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of
diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally
shares that may be issued under: our stock option, restricted stock and performance unit awards, determined using the treasury stock method; and our
convertible notes and warrants while outstanding (collectively “dilutive securities”). For further information regarding our convertible notes and warrants, see
Note 14, Financing arrangements.
The computation for basic and diluted EPS was as follows (in millions, except per share data):
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Income (Numerator):
Net income for basic and diluted EPS $5,081
$4,345
$ 3,683
Shares (Denominator):
Weighted-average shares for basic EPS 753
775
905
Effect of dilutive securities 12
12
7
Weighted-average shares for diluted EPS 765
787
912
Basic EPS $6.75
$5.61
$4.07
Diluted EPS $6.64
$5.52
$4.04
For the year ended December 31, 2013, the number of anti-dilutive employee stock-based awards excluded from the computation of diluted EPS was not
significant. For the years ended December 31, 2012 and 2011, there were employee stock-based awards, calculated on a weighted-average basis, to acquire 6
million and 33 million shares of our common stock, respectively, that are not included in the computation of diluted EPS because their impact would have
been anti-dilutive.
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A collaborative arrangement is a contractual arrangement that involves a joint operating activity which involves two or more parties who are both:
(i) active participants in the activity; and (ii) exposed to significant risks and rewards dependent on the commercial success of the activity.
From time to time, we enter into collaborative arrangements for the R&D, manufacture and/or commercialization of products and product candidates.
These collaborations generally provide for non-refundable upfront license fees, development and commercial performance milestone payments, cost sharing,
royalty payments and/or profit sharing. Our collaboration agreements are performed with no guarantee of either technological or commercial success and each
is unique in nature. Our significant arrangements are discussed below.
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