þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 95-3540776 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
One Amgen Center Drive, Thousand Oaks, California | 91320-1799 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Page No. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
Item 1. | FINANCIAL STATEMENTS |
Three months ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Revenues: | |||||||
Product sales | $ | 4,151 | $ | 3,901 | |||
Other revenues | 87 | 147 | |||||
Total revenues | 4,238 | 4,048 | |||||
Operating expenses: | |||||||
Cost of sales | 744 | 750 | |||||
Research and development | 878 | 736 | |||||
Selling, general and administrative | 1,158 | 1,079 | |||||
Other | 16 | 6 | |||||
Total operating expenses | 2,796 | 2,571 | |||||
Operating income | 1,442 | 1,477 | |||||
Interest expense, net | 263 | 235 | |||||
Interest and other income, net | 164 | 124 | |||||
Income before income taxes | 1,343 | 1,366 | |||||
(Benefit) provision for income taxes | (91 | ) | 182 | ||||
Net income | $ | 1,434 | $ | 1,184 | |||
Earnings per share: | |||||||
Basic | $ | 1.91 | $ | 1.50 | |||
Diluted | $ | 1.88 | $ | 1.48 | |||
Shares used in calculation of earnings per share: | |||||||
Basic | 751 | 791 | |||||
Diluted | 764 | 800 | |||||
Dividends paid per share | $ | 0.47 | $ | 0.36 |
Three months ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Net income | $ | 1,434 | $ | 1,184 | |||
Other comprehensive income (loss), net of reclassification adjustments and taxes: | |||||||
Foreign currency translation losses | (23 | ) | (2 | ) | |||
Effective portion of cash flow hedges | 75 | (65 | ) | ||||
Net unrealized gains (losses) on available-for-sale securities | (62 | ) | 2 | ||||
Other | 1 | — | |||||
Other comprehensive loss, net of tax | (9 | ) | (65 | ) | |||
Comprehensive income | $ | 1,425 | $ | 1,119 |
March 31, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,530 | $ | 3,257 | |||
Marketable securities | 18,741 | 20,804 | |||||
Trade receivables, net | 2,528 | 2,518 | |||||
Inventories | 2,737 | 2,744 | |||||
Other current assets | 2,159 | 1,886 | |||||
Total current assets | 28,695 | 31,209 | |||||
Property, plant and equipment, net | 5,296 | 5,326 | |||||
Intangible assets, net | 3,897 | 3,968 | |||||
Goodwill | 12,604 | 12,662 | |||||
Other assets | 1,148 | 1,133 | |||||
Total assets | $ | 51,640 | $ | 54,298 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 940 | $ | 905 | |||
Accrued liabilities | 4,195 | 4,791 | |||||
Current portion of long-term debt | 7 | 2,495 | |||||
Total current liabilities | 5,142 | 8,191 | |||||
Long-term debt | 23,885 | 24,034 | |||||
Other noncurrent liabilities | 3,122 | 3,013 | |||||
Contingencies and commitments | |||||||
Stockholders’ equity: | |||||||
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding - 749.6 shares in 2013 and 756.3 shares in 2012 | 29,465 | 29,337 | |||||
Accumulated deficit | (10,111 | ) | (10,423 | ) | |||
Accumulated other comprehensive income | 137 | 146 | |||||
Total stockholders’ equity | 19,491 | 19,060 | |||||
Total liabilities and stockholders’ equity | $ | 51,640 | $ | 54,298 |
Three months ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 1,434 | $ | 1,184 | |||
Depreciation and amortization | 277 | 259 | |||||
Stock-based compensation expense | 92 | 75 | |||||
Other items, net | (38 | ) | 67 | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Trade receivables, net | 19 | (92 | ) | ||||
Inventories | (12 | ) | (16 | ) | |||
Other assets | (10 | ) | (133 | ) | |||
Accounts payable | 35 | 226 | |||||
Accrued income taxes | (406 | ) | (60 | ) | |||
Other liabilities | (342 | ) | (538 | ) | |||
Net cash provided by operating activities | 1,049 | 972 | |||||
Cash flows from investing activities: | |||||||
Purchases of property, plant and equipment | (158 | ) | (144 | ) | |||
Cash paid for acquisitions, net of cash acquired | — | (969 | ) | ||||
Purchases of marketable securities | (6,964 | ) | (6,133 | ) | |||
Proceeds from sales of marketable securities | 6,013 | 4,740 | |||||
Proceeds from maturities of marketable securities | 2,924 | 160 | |||||
Other | (6 | ) | — | ||||
Net cash provided by (used in) investing activities | 1,809 | (2,346 | ) | ||||
Cash flows from financing activities: | |||||||
Repayment of debt | (2,500 | ) | (84 | ) | |||
Repurchases of common stock | (832 | ) | (1,375 | ) | |||
Dividends paid | (353 | ) | (285 | ) | |||
Net proceeds from issuance of common stock in connection with the Company’s equity award programs | 93 | 374 | |||||
Other | 7 | 5 | |||||
Net cash used in financing activities | (3,585 | ) | (1,365 | ) | |||
Decrease in cash and cash equivalents | (727 | ) | (2,739 | ) | |||
Cash and cash equivalents at beginning of period | 3,257 | 6,946 | |||||
Cash and cash equivalents at end of period | $ | 2,530 | $ | 4,207 |
Three months ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Income (Numerator): | |||||||
Net income for basic and diluted EPS | $ | 1,434 | $ | 1,184 | |||
Shares (Denominator): | |||||||
Weighted-average shares for basic EPS | 751 | 791 | |||||
Effect of dilutive securities | 13 | 9 | |||||
Weighted-average shares for diluted EPS | 764 | 800 | |||||
Basic EPS | $ | 1.91 | $ | 1.50 | |||
Diluted EPS | $ | 1.88 | $ | 1.48 |
Type of security as of March 31, 2013 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
U.S. Treasury securities | $ | 2,698 | $ | 9 | $ | — | $ | 2,707 | ||||||||
Other government-related debt securities: | ||||||||||||||||
U.S. | 1,013 | 6 | — | 1,019 | ||||||||||||
Foreign and other | 1,436 | 35 | (5 | ) | 1,466 | |||||||||||
Corporate debt securities: | ||||||||||||||||
Financial | 3,907 | 72 | (2 | ) | 3,977 | |||||||||||
Industrial | 4,380 | 79 | (2 | ) | 4,457 | |||||||||||
Other | 470 | 9 | — | 479 | ||||||||||||
Residential mortgage-backed securities | 1,816 | 9 | (8 | ) | 1,817 | |||||||||||
Other mortgage- and asset-backed securities | 1,515 | 2 | (20 | ) | 1,497 | |||||||||||
Money market mutual funds | 1,742 | — | — | 1,742 | ||||||||||||
Other short-term interest-bearing securities | 1,677 | — | — | 1,677 | ||||||||||||
Total interest-bearing securities | 20,654 | 221 | (37 | ) | 20,838 | |||||||||||
Equity securities | 55 | 7 | — | 62 | ||||||||||||
Total available-for-sale investments | $ | 20,709 | $ | 228 | $ | (37 | ) | $ | 20,900 |
Type of security as of December 31, 2012 | Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
U.S. Treasury securities | $ | 4,443 | $ | 15 | $ | — | $ | 4,458 | ||||||||
Other government-related debt securities: | ||||||||||||||||
U.S. | 1,018 | 12 | — | 1,030 | ||||||||||||
Foreign and other | 1,549 | 60 | (1 | ) | 1,608 | |||||||||||
Corporate debt securities: | ||||||||||||||||
Financial | 3,266 | 96 | (1 | ) | 3,361 | |||||||||||
Industrial | 4,283 | 100 | (3 | ) | 4,380 | |||||||||||
Other | 441 | 11 | — | 452 | ||||||||||||
Residential mortgage-backed securities | 1,828 | 9 | (8 | ) | 1,829 | |||||||||||
Other mortgage- and asset-backed securities | 1,769 | 7 | (9 | ) | 1,767 | |||||||||||
Money market mutual funds | 2,620 | — | — | 2,620 | ||||||||||||
Other short-term interest-bearing securities | 2,186 | — | — | 2,186 | ||||||||||||
Total interest-bearing securities | 23,403 | 310 | (22 | ) | 23,691 | |||||||||||
Equity securities | 52 | 2 | — | 54 | ||||||||||||
Total available-for-sale investments | $ | 23,455 | $ | 312 | $ | (22 | ) | $ | 23,745 |
Classification in the Condensed Consolidated Balance Sheets | March 31, 2013 | December 31, 2012 | ||||||
Cash and cash equivalents | $ | 2,097 | $ | 2,887 | ||||
Marketable securities | 18,741 | 20,804 | ||||||
Other assets — noncurrent | 62 | 54 | ||||||
Total available-for-sale investments | $ | 20,900 | $ | 23,745 |
Contractual maturity | March 31, 2013 | December 31, 2012 | ||||||
Maturing in one year or less | $ | 3,916 | $ | 7,175 | ||||
Maturing after one year through three years | 4,926 | 5,014 | ||||||
Maturing after three years through five years | 6,919 | 6,286 | ||||||
Maturing after five years through ten years | 1,763 | 1,620 | ||||||
Mortgage- and asset-backed securities | 3,314 | 3,596 | ||||||
Total interest-bearing securities | $ | 20,838 | $ | 23,691 |
March 31, 2013 | December 31, 2012 | ||||||
Raw materials | $ | 215 | $ | 192 | |||
Work in process | 1,646 | 1,723 | |||||
Finished goods | 876 | 829 | |||||
Total inventories | $ | 2,737 | $ | 2,744 |
March 31, 2013 | December 31, 2012 | ||||||
0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes) | $ | — | $ | 2,488 | |||
1.875% notes due 2014 (1.875% 2014 Notes) | 1,000 | 1,000 | |||||
4.85% notes due 2014 (4.85% 2014 Notes) | 1,000 | 1,000 | |||||
2.30% notes due 2016 (2.30% 2016 Notes) | 749 | 749 | |||||
2.50% notes due 2016 (2.50% 2016 Notes) | 999 | 999 | |||||
2.125% notes due 2017 (2.125% 2017 Notes) | 1,248 | 1,248 | |||||
5.85% notes due 2017 (5.85% 2017 Notes) | 1,099 | 1,099 | |||||
6.15% notes due 2018 (6.15% 2018 Notes) | 499 | 499 | |||||
4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes) | 708 | 723 | |||||
5.70% notes due 2019 (5.70% 2019 Notes) | 999 | 999 | |||||
2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes) | 868 | 887 | |||||
4.50% notes due 2020 (4.50% 2020 Notes) | 300 | 300 | |||||
3.45% notes due 2020 (3.45% 2020 Notes) | 897 | 897 | |||||
4.10% notes due 2021 (4.10% 2021 Notes) | 998 | 998 | |||||
3.875% notes due 2021 (3.875% 2021 Notes) | 1,745 | 1,745 | |||||
3.625% notes due 2022 (3.625% 2022 Notes) | 747 | 747 | |||||
5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes) | 715 | 763 | |||||
4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes) | 1,047 | 1,117 | |||||
6.375% notes due 2037 (6.375% 2037 Notes) | 899 | 899 | |||||
6.90% notes due 2038 (6.90% 2038 Notes) | 499 | 499 | |||||
6.40% notes due 2039 (6.40% 2039 Notes) | 996 | 996 | |||||
5.75% notes due 2040 (5.75% 2040 Notes) | 697 | 697 | |||||
4.95% notes due 2041 (4.95% 2041 Notes) | 595 | 595 | |||||
5.15% notes due 2041 (5.15% 2041 Notes) | 2,232 | 2,232 | |||||
5.65% notes due 2042 (5.65% 2042 Notes) | 1,244 | 1,244 | |||||
5.375% notes due 2043 (5.375% 2043 Notes) | 1,000 | 1,000 | |||||
Other notes | 112 | 109 | |||||
Total debt | 23,892 | 26,529 | |||||
Less current portion | (7 | ) | (2,495 | ) | |||
Total noncurrent debt | $ | 23,885 | $ | 24,034 |
2013 | 2012 | ||||||||||
Shares | Dollars | Shares | Dollars | ||||||||
First quarter | 9.1 | $ | 771 | 21.0 | $ | 1,429 |
Foreign currency translation | Cash flow hedges | Available-for-sale securities | Other | AOCI | |||||||||||||||
Balance as of December 31, 2012 | $ | 12 | $ | (35 | ) | $ | 183 | $ | (14 | ) | $ | 146 | |||||||
Foreign currency translation adjustments | (36 | ) | — | — | — | (36 | ) | ||||||||||||
Unrealized (losses) gains | — | (25 | ) | (32 | ) | 1 | (56 | ) | |||||||||||
Reclassification adjustments to income | — | 144 | (67 | ) | — | 77 | |||||||||||||
Income taxes | 13 | (44 | ) | 37 | — | 6 | |||||||||||||
Balance as of March 31, 2013 | $ | (11 | ) | $ | 40 | $ | 121 | $ | (13 | ) | $ | 137 |
Amount reclassified out of AOCI | ||||||
Three months ended | Line item affected in the | |||||
Components of AOCI | March 31, 2013 | Statement of Income | ||||
Cash flow hedges: | ||||||
Foreign currency contract losses | $ | (4 | ) | Product sales | ||
Cross-currency swap contract losses | (140 | ) | Interest and other income, net | |||
(144 | ) | Total before income tax | ||||
53 | Income tax (expense)/benefit | |||||
$ | (91 | ) | Net of income taxes | |||
Available-for-sale securities: | ||||||
Net realized gains | $ | 67 | Interest and other income, net | |||
(25 | ) | Income tax (expense)/benefit | ||||
$ | 42 | Net of income taxes |
Level 1 | — | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access |
Level 2 | — | Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs |
Level 3 | — | Valuations based on inputs that are unobservable and significant to the overall fair value measurement |
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||
Fair value measurement | ||||||||||||||||
as of March 31, 2013, using: | Total | |||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale investments: | ||||||||||||||||
U.S. Treasury securities | $ | 2,707 | $ | — | $ | — | $ | 2,707 | ||||||||
Other government-related debt securities: | ||||||||||||||||
U.S. | — | 1,019 | — | 1,019 | ||||||||||||
Foreign and other | — | 1,466 | — | 1,466 | ||||||||||||
Corporate debt securities: | ||||||||||||||||
Financial | — | 3,977 | — | 3,977 | ||||||||||||
Industrial | — | 4,457 | — | 4,457 | ||||||||||||
Other | — | 479 | — | 479 | ||||||||||||
Residential mortgage-backed securities | — | 1,817 | — | 1,817 | ||||||||||||
Other mortgage- and asset-backed securities | — | 1,497 | — | 1,497 | ||||||||||||
Money market mutual funds | 1,742 | — | — | 1,742 | ||||||||||||
Other short-term interest-bearing securities | — | 1,677 | — | 1,677 | ||||||||||||
Equity securities | 62 | — | — | 62 | ||||||||||||
Derivatives: | ||||||||||||||||
Foreign currency contracts | — | 108 | — | 108 | ||||||||||||
Cross-currency swap contracts | — | 8 | — | 8 | ||||||||||||
Interest rate swap contracts | — | 22 | — | 22 | ||||||||||||
Total assets | $ | 4,511 | $ | 16,527 | $ | — | $ | 21,038 | ||||||||
Liabilities: | ||||||||||||||||
Derivatives: | ||||||||||||||||
Foreign currency contracts | $ | — | $ | 21 | $ | — | $ | 21 | ||||||||
Cross-currency swap contracts | — | 72 | — | 72 | ||||||||||||
Contingent consideration obligations in connection with a business combination | — | — | 222 | 222 | ||||||||||||
Total liabilities | $ | — | $ | 93 | $ | 222 | $ | 315 |
Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||
Fair value measurement | ||||||||||||||||
as of December 31, 2012, using: | Total | |||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale investments: | ||||||||||||||||
U.S. Treasury securities | $ | 4,458 | $ | — | $ | — | $ | 4,458 | ||||||||
Other government-related debt securities: | ||||||||||||||||
U.S. | — | 1,030 | — | 1,030 | ||||||||||||
Foreign and other | — | 1,608 | — | 1,608 | ||||||||||||
Corporate debt securities: | ||||||||||||||||
Financial | — | 3,361 | — | 3,361 | ||||||||||||
Industrial | — | 4,380 | — | 4,380 | ||||||||||||
Other | — | 452 | — | 452 | ||||||||||||
Residential mortgage-backed securities | — | 1,829 | — | 1,829 | ||||||||||||
Other mortgage- and asset-backed securities | — | 1,767 | — | 1,767 | ||||||||||||
Money market mutual funds | 2,620 | — | — | 2,620 | ||||||||||||
Other short-term interest-bearing securities | — | 2,186 | — | 2,186 | ||||||||||||
Equity securities | 54 | — | — | 54 | ||||||||||||
Derivatives: | ||||||||||||||||
Foreign currency contracts | — | 46 | — | 46 | ||||||||||||
Cross-currency swap contracts | — | 65 | — | 65 | ||||||||||||
Total assets | $ | 7,132 | $ | 16,724 | $ | — | $ | 23,856 | ||||||||
Liabilities: | ||||||||||||||||
Derivatives: | ||||||||||||||||
Foreign currency contracts | $ | — | $ | 59 | $ | — | $ | 59 | ||||||||
Cross-currency swap contracts | — | 6 | — | 6 | ||||||||||||
Contingent consideration obligations in connection with a business combination | — | — | 221 | 221 | ||||||||||||
Total liabilities | $ | — | $ | 65 | $ | 221 | $ | 286 |
Foreign currency | U.S. dollars | |||||||||||||
Hedged notes | Notional Amount | Interest rate | Notional Amount | Interest rate | ||||||||||
2.125% 2019 euro Notes | € | 675 | 2.125 | % | $ | 864 | 2.6 | % | ||||||
5.50% 2026 pound sterling Notes | £ | 475 | 5.50 | % | $ | 748 | 5.8 | % | ||||||
4.00% 2029 pound sterling Notes | £ | 700 | 4.00 | % | $ | 1,122 | 4.3 | % |
Three months ended | ||||||||
March 31, | ||||||||
Derivatives in cash flow hedging relationships | 2013 | 2012 | ||||||
Foreign currency contracts | $ | 100 | $ | (87 | ) | |||
Cross-currency swap contracts | (125 | ) | 8 | |||||
Total | $ | (25 | ) | $ | (79 | ) |
Three months ended | ||||||||||
March 31, | ||||||||||
Derivatives in cash flow hedging relationships | Statements of Income location | 2013 | 2012 | |||||||
Foreign currency contracts | Product sales | $ | (4 | ) | $ | 11 | ||||
Cross-currency swap contracts | Interest and other income, net | (140 | ) | 13 | ||||||
Total | $ | (144 | ) | $ | 24 |
Three months ended | ||||||||||
March 31, | ||||||||||
Derivatives not designated as hedging instruments | Statements of Income location | 2013 | 2012 | |||||||
Foreign currency contracts | Interest and other income, net | $ | (16 | ) | $ | (10 | ) |
Derivative assets | Derivative liabilities | |||||||||||
March 31, 2013 | Balance Sheet location | Fair value | Balance Sheet location | Fair value | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Cross-currency swap contracts | Other current assets/ Other noncurrent assets | $ | 8 | Accrued liabilities/ Other noncurrent liabilities | $ | 72 | ||||||
Foreign currency contracts | Other current assets/ Other noncurrent assets | 107 | Accrued liabilities/ Other noncurrent liabilities | 21 | ||||||||
Interest rate swap contracts | Other current assets/ Other noncurrent assets | 22 | Accrued liabilities/ Other noncurrent liabilities | — | ||||||||
Total derivatives designated as hedging instruments | 137 | 93 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency contracts | Other current assets | 1 | Accrued liabilities | — | ||||||||
Total derivatives not designated as hedging instruments | 1 | — | ||||||||||
Total derivatives | $ | 138 | $ | 93 |
Derivative assets | Derivative liabilities | |||||||||||
December 31, 2012 | Balance Sheet location | Fair value | Balance Sheet location | Fair value | ||||||||
Derivatives designated as hedging instruments: | ||||||||||||
Cross-currency swap contracts | Other current assets/ Other noncurrent assets | $ | 65 | Accrued liabilities/ Other noncurrent liabilities | $ | 6 | ||||||
Foreign currency contracts | Other current assets/ Other noncurrent assets | 45 | Accrued liabilities/ Other noncurrent liabilities | 58 | ||||||||
Total derivatives designated as hedging instruments | 110 | 64 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign currency contracts | Other current assets | 1 | Accrued liabilities | 1 | ||||||||
Total derivatives not designated as hedging instruments | 1 | 1 | ||||||||||
Total derivatives | $ | 111 | $ | 65 |
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | On March 19, 2013, we announced top-line results from the phase 3 trial in melanoma, which evaluated the efficacy and safety of talimogene laherparepvec for the treatment of unresected stage IIIB, IIIC or IV melanoma compared to treatment with subcutaneous granulocyte-macrophage colony-stimulating factor (GM-CSF). |
• | In April 2013, we announced we had initiated phase 3 studies for the treatment of secondary hyperparathyroidism. |
• | In April 2013, we announced plans to commence a pivotal study in the second quarter for biosimilar Herceptin® (trastuzumab). |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
Product sales: | ||||||||||
U.S. | $ | 3,172 | $ | 2,997 | 6 | % | ||||
Rest-of-the-world (ROW) | 979 | 904 | 8 | % | ||||||
Total product sales | 4,151 | 3,901 | 6 | % | ||||||
Other revenues | 87 | 147 | (41 | )% | ||||||
Total revenues | $ | 4,238 | $ | 4,048 | 5 | % | ||||
Operating expenses | $ | 2,796 | $ | 2,571 | 9 | % | ||||
Operating income | $ | 1,442 | $ | 1,477 | (2 | )% | ||||
Net income | $ | 1,434 | $ | 1,184 | 21 | % | ||||
Diluted EPS | $ | 1.88 | $ | 1.48 | 27 | % | ||||
Diluted shares | 764 | 800 | (5 | )% |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
Neulasta®/NEUPOGEN ® | $ | 1,338 | $ | 1,344 | — | % | ||||
ENBREL | 1,039 | 938 | 11 | % | ||||||
Aranesp® | 468 | 518 | (10 | )% | ||||||
EPOGEN® | 435 | 446 | (2 | )% | ||||||
XGEVA® | 223 | 153 | 46 | % | ||||||
Prolia® | 142 | 88 | 61 | % | ||||||
Other products | 506 | 414 | 22 | % | ||||||
Total product sales | $ | 4,151 | $ | 3,901 | 6 | % |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
Neulasta®— U.S. | $ | 827 | $ | 814 | 2 | % | ||||
Neulasta®— ROW | 212 | 225 | (6 | )% | ||||||
Total Neulasta® | 1,039 | 1,039 | — | % | ||||||
NEUPOGEN®— U.S. | 242 | 239 | 1 | % | ||||||
NEUPOGEN®— ROW | 57 | 66 | (14 | )% | ||||||
Total NEUPOGEN® | 299 | 305 | (2 | )% | ||||||
Total Neulasta®/NEUPOGEN® | $ | 1,338 | $ | 1,344 | — | % |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
ENBREL — U.S. | $ | 974 | $ | 878 | 11 | % | ||||
ENBREL — Canada | 65 | 60 | 8 | % | ||||||
Total ENBREL | $ | 1,039 | $ | 938 | 11 | % |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
Aranesp® — U.S. | $ | 168 | $ | 202 | (17 | )% | ||||
Aranesp® — ROW | 300 | 316 | (5 | )% | ||||||
Total Aranesp® | $ | 468 | $ | 518 | (10 | )% |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
EPOGEN® — U.S. | $ | 435 | $ | 446 | (2 | )% |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
XGEVA® — U.S. | $ | 178 | $ | 139 | 28 | % | ||||
XGEVA® — ROW | 45 | 14 | * | |||||||
Total XGEVA® | 223 | 153 | 46 | % | ||||||
Prolia® — U.S. | 87 | 54 | 61 | % | ||||||
Prolia® — ROW | 55 | 34 | 62 | % | ||||||
Total Prolia® | 142 | 88 | 61 | % | ||||||
Total XGEVA®/Prolia® | $ | 365 | $ | 241 | 51 | % |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
Sensipar® — U.S. | $ | 179 | $ | 140 | 28 | % | ||||
Sensipar®/Mimpara® — ROW | 85 | 79 | 8 | % | ||||||
Vectibix® — U.S. | 27 | 31 | (13 | )% | ||||||
Vectibix® — ROW | 60 | 59 | 2 | % | ||||||
Nplate® — U.S. | 55 | 54 | 2 | % | ||||||
Nplate® — ROW | 41 | 36 | 14 | % | ||||||
Other — ROW | 59 | 15 | * | |||||||
Total other products | $ | 506 | $ | 414 | 22 | % | ||||
Total U.S. — other products | $ | 261 | $ | 225 | 16 | % | ||||
Total ROW — other products | 245 | 189 | 30 | % | ||||||
Total other products | $ | 506 | $ | 414 | 22 | % |
Three months ended | ||||||||||
March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
Cost of sales | $ | 744 | $ | 750 | (1 | )% | ||||
% of product sales | 17.9 | % | 19.2 | % | ||||||
Research and development | $ | 878 | $ | 736 | 19 | % | ||||
% of product sales | 21.2 | % | 18.9 | % | ||||||
Selling, general and administrative | $ | 1,158 | $ | 1,079 | 7 | % | ||||
% of product sales | 27.9 | % | 27.7 | % | ||||||
Other | $ | 16 | $ | 6 | * |
Three months ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Interest expense, net | $ | 263 | $ | 235 | |||
Interest and other income, net | $ | 164 | $ | 124 | |||
(Benefit) provision for income taxes | $ | (91 | ) | $ | 182 | ||
Effective tax rate | (6.8 | )% | 13.3 | % |
March 31, 2013 | December 31, 2012 | ||||||
Cash, cash equivalents and marketable securities | $ | 21,271 | $ | 24,061 | |||
Total assets | 51,640 | 54,298 | |||||
Current portion of long-term debt | 7 | 2,495 | |||||
Long-term debt | 23,885 | 24,034 | |||||
Stockholders’ equity | 19,491 | 19,060 |
Three months ended March 31, | |||||||
2013 | 2012 | ||||||
Net cash provided by operating activities | $ | 1,049 | $ | 972 | |||
Net cash provided by (used in) investing activities | 1,809 | (2,346 | ) | ||||
Net cash used in financing activities | (3,585 | ) | (1,365 | ) |
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. | CONTROLS AND PROCEDURES |
Item 1. | LEGAL PROCEEDINGS |
Item 1A. | RISK FACTORS |
Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced program | Maximum dollar value that may yet be purchased under the program(1) | ||||||||||
January 1 - January 31 | 5,261,500 | $ | 85.30 | 5,261,500 | $ | 1,882,491,021 | |||||||
February 1 - February 28 | 3,811,000 | 84.66 | 3,811,000 | 1,559,838,541 | |||||||||
March 1 - March 31 | — | — | 1,559,838,541 | ||||||||||
9,072,500 | 85.03 | 9,072,500 |
(1) | On December 13, 2012, our Board of Directors authorized the repurchase of an additional $2 billion of our common stock. |
Item 6. | EXHIBITS |
Amgen Inc. | ||||
(Registrant) | ||||
Date: | May 3, 2013 | By: | /s/ Jonathan M. Peacock | |
Jonathan M. Peacock | ||||
Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
3.1* | Restated Certificate of Incorporation of Amgen Inc. (As Restated March 6, 2013). | |
3.2 | Amended and Restated Bylaws of Amgen Inc. (As Amended and Restated March 6, 2013). (Filed as an exhibit to Form 8-K filed on March 6, 2013 and incorporated herein by reference.) | |
4.1 | Form of stock certificate for the common stock, par value $.0001 of the Company. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 13, 1997 and incorporated herein by reference.) | |
4.2 | Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.) | |
4.3 | Agreement of Resignation, Appointment and Acceptance dated February 15, 2008. (Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.) | |
4.4 | First Supplemental Indenture, dated February 26, 1997. (Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.) | |
4.5 | 8-1/8% Debentures due April 1, 2097. (Filed as an exhibit to Form 8-K filed on April 8, 1997 and incorporated herein by reference.) | |
4.6 | Officer's Certificate, dated as of January 1, 1992, as supplemented by the First Supplemental Indenture, dated as of February 26, 1997, establishing a series of securities entitled “8 1/8% Debentures due April 1, 2097.” (Filed as an exhibit to Form 8-K filed on April 8, 1997 and incorporated herein by reference.) | |
4.7 | Indenture, dated as of August 4, 2003. (Filed as an exhibit to Form S-3 Registration Statement on August 4, 2003 and incorporated herein by reference.) | |
4.8 | Officers' Certificate, dated November 18, 2004, including forms of the 4.00% Senior Notes due 2009 and 4.85% Senior Notes due 2014. (Filed as an exhibit to Form 8-K on November 19, 2004 and incorporated herein by reference.) | |
4.9 | Indenture, dated as of February 17, 2006 and First Supplemental Indenture, dated as of June 8, 2006 (including form of 0.375% Convertible Senior Note due 2013). (Filed as exhibit to Form 10-Q for the quarter ended June 30, 2006 on August 9, 2006 and incorporated herein by reference.) | |
4.10 | Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as Nominee of The Depository Trust Company, and Citibank, N.A., as Paying Agent. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1998 on May 13, 1998 and incorporated herein by reference.) | |
4.11 | Officers' Certificate of Amgen Inc., dated as of May 30, 2007, including forms of the Company's Senior Floating Rate Notes due 2008, 5.85% Senior Notes due 2017 and 6.375% Senior Notes due 2037. (Filed as an exhibit to Form 8-K on May 30, 2007 and incorporated herein by reference.) | |
4.12 | Officers' Certificate of Amgen Inc., dated as of May 23, 2008, including forms of the Company's 6.15% Senior Notes due 2018 and 6.90% Senior Notes due 2038. (Filed as exhibit to Form 8-K on May 23, 2009 and incorporated herein by reference.) | |
4.13 | Officers' Certificate of Amgen Inc., dated as of January 16, 2009, including forms of the Company's 5.70% Senior Notes due 2019 and 6.40% Senior Notes due 2039. (Filed as exhibit to Form 8-K on January 16, 2009 and incorporated herein by reference.) | |
4.14 | Officers' Certificate of Amgen Inc., dated as of March 12, 2010, including forms of the Company's 4.50% Senior Notes due 2020 and 5.75% Senior Notes due 2040. (Filed as exhibit to Form 8-K on March 15, 2010 and incorporated herein by reference.) | |
4.15 | Officers' Certificate of Amgen Inc., dated as of September 16, 2010, including forms of the Company's 3.45% Senior Notes due 2020 and 4.95% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on September 17, 2010 and incorporated herein by reference.) | |
4.16 | Officers' Certificate of Amgen Inc., dated as of June 30, 2011, including forms of the Company's 2.30% Senior Notes due 2016, 4.10% Senior Notes due 2021 and 5.65% Senior Notes due 2042. (Filed as an exhibit to Form 8-K on June 30, 2011 and incorporated herein by reference.) | |
Exhibit No. | Description | |
4.17 | Officers' Certificate of Amgen Inc., dated as of November 10, 2011, including forms of the Company's 1.875% Senior Notes due 2014, 2.50% Senior Notes due 2016, 3.875% Senior Notes due 2021 and 5.15% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on November 10, 2011 and incorporated herein by reference.) | |
4.18 | Officers' Certificate of Amgen Inc., dated as of December 5, 2011, including forms of the Company's 4.375% Senior Notes due 2018 and 5.50% Senior Notes due 2026. (Filed as an exhibit to Form 8-K on December 5, 2011 and incorporated herein by reference.) | |
4.19 | Officers' Certificate of Amgen Inc., dated as of May 15, 2012, including forms of the Company's 2.125% Senior Notes due 2017, 3.625% Senior Notes due 2022 and 5.375% Senior Notes due 2043. (Filed as an exhibit to Form 8-K on May 15, 2012 and incorporated herein by reference.) | |
4.20 | Officers' Certificate of Amgen Inc., dated as of September 13, 2012, including forms of the Company's 2.125% Senior Notes due 2019 and 4.000% Senior Notes due 2029. (Filed as an exhibit to Form 8-K on September 13, 2012 and incorporated herein by reference.) | |
10.1+ | Amgen Inc. 2009 Equity Incentive Plan. (Filed as Appendix A to the Definitive Proxy Statement on Schedule 14A on March 26, 2009 and incorporated herein by reference.) | |
10.2+* | Form of Stock Option Agreement for the Amgen Inc. 2009 Equity Incentive Plan. (As Amended on March 6, 2013.) | |
10.3+* | Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Equity Incentive Plan. (As Amended on March 6, 2013.) | |
10.4+* | Amgen Inc. 2009 Performance Award Program. (As Amended on March 6, 2013.) | |
10.5+* | Form of Performance Unit Agreement for the Amgen Inc. 2009 Performance Award Program. (As Amended on March 6, 2013.) | |
10.6+* | Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on March 6, 2013.) | |
10.7+ | Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.) | |
10.8+* | Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on March 6, 2013.) | |
10.9+ | Amgen Inc. Supplemental Retirement Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.) | |
10.10+ | First Amendment to the Amgen Inc. Supplemental Retirement Plan, effective April 11, 2011. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2011 on August 8, 2011 and incorporated herein by reference.) | |
10.11+ | Second Amendment to the Amgen Inc. Supplemental Retirement Plan, effective October 12, 2011. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 on February 29, 2012 and incorporated herein by reference.) | |
10.12+ | Third Amendment to the Amgen Inc. Supplemental Retirement Plan, effective January 1, 2012. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 on February 29, 2012 and incorporated herein by reference.) | |
10.13+ | Fourth Amendment to the Amgen Inc. Supplemental Retirement Plan, effective June 18, 2012. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2012 on August 8, 2012 and incorporated herein by reference.) | |
10.14+ | Fifth Amendment to the Amgen Inc. Supplemental Retirement Plan, effective August 27, 2012. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2012 on November 6, 2012 and incorporated herein by reference.) | |
10.15+ | Amended and Restated Amgen Change of Control Severance Plan. (As Amended and Restated effective December 9, 2010 and subsequently amended effective March 2, 2011.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 on May 10, 2011 and incorporated herein by reference.) | |
10.16+ | Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.) | |
Exhibit No. | Description | |
10.17+ | First Amendment to the Amgen Inc. Executive Incentive Plan, effective December 13, 2012. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.) | |
10.18+ | Amgen Inc. Executive Nonqualified Retirement Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.) | |
10.19+ | First Amendment to the Amgen Inc. Executive Nonqualified Retirement Plan, effective July 21, 2010. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2010 on August 9, 2010 and incorporated herein by reference.) | |
10.20+ | Amgen Nonqualified Deferred Compensation Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.) | |
10.21+ | First Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective April 11, 2011. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2011 on August 8, 2011 and incorporated herein by reference.) | |
10.22+ | Second Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective October 12, 2011. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 on February 29, 2012 and incorporated herein by reference.) | |
10.23+ | Third Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective June 18, 2012. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2012 on August 8, 2012 and incorporated herein by reference.) | |
10.24+ | Fourth Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective August 27, 2012. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2012 on November 6, 2012 and incorporated herein by reference.) | |
10.25+ | Agreement between Amgen Inc. and Mr. Jonathan M. Peacock, dated July 5, 2010. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2010 on November 8, 2010 and incorporated herein by reference.) | |
10.26+ | Agreement between Amgen Inc. and Mr. Anthony C. Hooper, dated October 12, 2011. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 on February 29, 2012 and incorporated herein by reference.) | |
10.27+ | Grant Agreement, dated December 3, 2012, between Amgen Inc. and Reed College. (Filed as an exhibit to Form 8-K on December 7, 2012 and incorporated herein by reference.) | |
10.28+* | Consulting Services Agreement, entered into as of January 25, 2013, by and between Amgen Inc. and Fabrizio Bonanni. | |
10.29+ | Restricted Stock Unit Agreement, dated April 27, 2012, between Amgen Inc. and Kevin W. Sharer. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2012 on August 8, 2012 and incorporated herein by reference.) | |
10.30+ | Performance Unit Agreement, dated April 27, 2012, between Amgen Inc. and Kevin W. Sharer. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2012 on August 8, 2012 and incorporated herein by reference.) | |
10.31 | Product License Agreement, dated September 30, 1985, and Technology License Agreement, dated, September 30, 1985 between Amgen and Ortho Pharmaceutical Corporation. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2000 on August 1, 2000 and incorporated herein by reference.) | |
10.32 | Shareholders' Agreement, dated May 11, 1984, among Amgen, Kirin Brewery Company, Limited and Kirin-Amgen, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.) | |
10.33 | Amendment No. 1 dated March 19, 1985, Amendment No. 2 dated July 29, 1985 (effective July 1, 1985), and Amendment No. 3, dated December 19, 1985, to the Shareholders' Agreement dated May 11, 1984. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2000 on August 1, 2000 and incorporated herein by reference.) | |
10.34 | Amendment No. 4 dated October 16, 1986 (effective July 1, 1986), Amendment No. 5 dated December 6, 1986 (effective July 1, 1986), Amendment No. 6 dated June 1, 1987, Amendment No. 7 dated July 17, 1987 (effective April 1, 1987), Amendment No. 8 dated May 28, 1993 (effective November 13, 1990), Amendment No. 9 dated December 9, 1994 (effective June 14, 1994), Amendment No. 10 effective March 1, 1996, and Amendment No. 11 effective March 20, 2000 to the Shareholders' Agreement, dated May 11, 1984. (Filed as exhibits to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.) | |
Exhibit No. | Description | |
10.35 | Amendment No. 12 to the Shareholders' Agreement, dated January 31, 2001. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2005 on August 8, 2005 and incorporated herein by reference.) | |
10.36 | Amendment No. 13 to the Shareholders' Agreement, dated June 28, 2007 (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2007 on August 9, 2007 and incorporated herein by reference.) | |
10.37 | Product License Agreement, dated September 30, 1985, and Technology License Agreement, dated September 30, 1985, between Kirin-Amgen, Inc. and Ortho Pharmaceutical Corporation. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2000 on August 1, 2000 and incorporated herein by reference.) | |
10.38 | Research, Development Technology Disclosure and License Agreement: PPO, dated January 20, 1986, by and between Kirin Brewery Co., Ltd. and Amgen Inc. (Filed as an exhibit to Amendment No. 1 to Form S-1 Registration Statement on March 11, 1986 and incorporated herein by reference.) | |
10.39 | Assignment and License Agreement, dated October 16, 1986 (effective July 1, 1986), between Amgen and Kirin-Amgen, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.) | |
10.40 | G-CSF United States License Agreement, dated June 1, 1987 (effective July 1, 1986), Amendment No. 1, dated October 20, 1988, and Amendment No. 2, dated October 17, 1991 (effective November 13, 1990), between Kirin-Amgen, Inc. and Amgen Inc. (Filed as exhibits to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.) | |
10.41 | G-CSF European License Agreement, dated December 30, 1986, between Kirin-Amgen and Amgen, Amendment No. 1 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated June 1, 1987, Amendment No. 2 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated March 15, 1998, Amendment No. 3 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated October 20, 1988, and Amendment No. 4 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated December 29, 1989, between Kirin-Amgen, Inc. and Amgen Inc. (Filed as exhibits to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.) | |
10.42 | Amended and Restated Promotion Agreement, dated as of December 16, 2001, by and among Immunex Corporation, American Home Products Corporation and Amgen Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Amendment No. 1 to Form S-4 Registration Statement on March 22, 2002 and incorporated herein by reference.) | |
10.43 | Description of Amendment No. 1 to Amended and Restated Promotion Agreement, effective as of July 8, 2003, among Wyeth, Amgen Inc. and Immunex Corporation (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2003 on March 11, 2004 and incorporated herein by reference.) | |
10.44 | Description of Amendment No. 2 to Amended and Restated Promotion Agreement, effective as of April 20, 2004, by and among Wyeth, Amgen Inc. and Immunex Corporation. (Filed as an exhibit to Amendment No. 1 to Form S-4 Registration Statement on June 29, 2004 and incorporated herein by reference.) | |
10.45 | Amendment No. 3 to Amended and Restated Promotion Agreement, effective as of January 1, 2005, by and among Wyeth, Amgen Inc. and Immunex Corporation (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2005 on May 4, 2005 and incorporated herein by reference.) | |
10.46 | Confirmation of OTC Convertible Note Hedge related to 2013 Notes, dated February 14, 2006, to Amgen Inc. from Merrill Lynch International related to 0.375% Convertible Senior Notes Due 2013. (Filed as an exhibit to Form 10-K for the year ended December 31, 2005 on March 10, 2006 and incorporated herein by reference.) | |
10.47 | Confirmation of OTC Warrant Transaction, dated February 14, 2006, to Amgen Inc. from Merrill Lynch International for warrants expiring in 2013. (Filed as an exhibit to Form 10-K for the year ended December 31, 2005 on March 10, 2006 and incorporated herein by reference.) | |
10.48 | Credit Agreement, dated as of December 2, 2011, among Amgen Inc., with Citibank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC as joint lead arrangers and joint book runners, and the other banks party thereto. (Filed as an exhibit to Form 8-K filed on December 2, 2011 and incorporated herein by reference.) | |
Exhibit No. | Description | |
10.49 | Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No. 1, effective as of June 9, 2003, to Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.) | |
10.50 | Integrated Facilities Management Services Agreement, dated February 4, 2009, between Amgen Inc. and Jones Lang LaSalle Americas, Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment) (Previously filed as an exhibit to Form 10-K for the year ended December 31, 2008 on February 27, 2009.), as amended by Amendment Number 1 dated March 31, 2010 (portions of the exhibit have been omitted pursuant to a request for confidential treatment), Amendment Number 2 dated May 12, 2011 (as corrected by the Letter Agreement) (portions of the exhibit have been omitted pursuant to a request for confidential treatment), and Letter Agreement dated July 19, 2011. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2011 on August 8, 2011 and incorporated herein by reference.) | |
10.51 | Amendment Number 3, dated July 1, 2011, to the Integrated Facilities Management Services Agreement, dated February 4, 2009, between Amgen Inc. and Jones Lang LaSalle Americas, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2011 on November 4, 2011 and incorporated herein by reference.) | |
10.52* | Amendment Number 4, dated March 20, 2013, to the Integrated Facilities Management Services Agreement, dated February 4, 2009, between Amgen Inc. and Jones Lang LaSalle Americas, Inc. | |
10.53 | Collaboration Agreement dated July 27, 2009 between Amgen Inc. and Glaxo Group Limited, a wholly owned subsidiary of GlaxoSmithKline plc (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2009 on November 6, 2009 and incorporated herein by reference.) | |
10.54 | Amendment Number 1, dated as of January 24, 2012, to Collaboration Agreement dated July 27, 2009 between Amgen Inc. and Glaxo Group Limited, a wholly owned subsidiary of GlaxoSmithKline plc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.) | |
10.55 | Expansion Agreement dated July 27, 2009 between Amgen Inc. and Glaxo Group Limited, a wholly owned subsidiary of GlaxoSmithKline plc (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2009 on November 6, 2009 and incorporated herein by reference.) | |
10.56 | Amendment Number 1, dated September 20, 2010, to Expansion Agreement dated July 27, 2009 between Amgen Inc. and Glaxo Group Limited, a wholly owned subsidiary of GlaxoSmithKline plc (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2010 on November 8, 2010 and incorporated herein by reference.) | |
10.57 | Amendment Number 2, dated as of January 24, 2012, to Expansion Agreement dated July 27, 2009 between Amgen Inc. and Glaxo Group Limited, a wholly owned subsidiary of GlaxoSmithKline plc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.) | |
10.58 | Sourcing and Supply Agreement, dated November 15, 2011, by and between Amgen USA Inc, a wholly owned subsidiary of Amgen Inc., and DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 on February 29, 2012 and incorporated herein by reference.) | |
10.59 | Amendment Number 1 to Sourcing and Supply Agreement, effective as of January 1, 2013, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Healthcare Partners Inc. f/k/a DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.) | |
10.60 | Collaboration Agreement dated March 30, 2012 by and between Amgen Inc. and AstraZeneca Collaboration Ventures, LLC, a wholly owned subsidiary of AstraZeneca Pharmaceuticals LP (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2012 on May 8, 2012 and incorporated herein by reference.) | |
31* | Rule 13a-14(a) Certifications. | |
32** | Section 1350 Certifications. | |
101.INS* | XBRL Instance Document. | |
Exhibit No. | Description | |
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
AMGEN INC. | ||
/s/ David J. Scott | ||
David J. Scott | ||
Senior Vice President, General Counsel and Secretary |
Plan: | Amgen Inc. 2009 Equity Incentive Plan, as amended and/or restated from time to time |
Grant Price: | $________ |
Expiration Date: | The [______ (__th)] anniversary of the date of this Award |
Vesting Date: | Means the vesting date indicated in the Vesting Schedule |
Vesting Schedule: | Means the schedule of vesting set forth under Vesting Details |
Vesting Details: | Means the presentation (tabular or otherwise) of the Vesting Date and the quantity of Shares vesting. |
a. | the terms and conditions of this Option, including Appendix A, are deemed modified to the extent necessary or advisable to comply with applicable foreign laws or facilitate the administration to the Plan; |
b. | if applicable, the effectiveness of this Option is conditioned upon its compliance with any applicable foreign laws, regulations, rules or local governmental regulatory exemption and subject to receipt of any required foreign regulatory approvals; and |
a. | the Company may take any other action before or after the date of this Option that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. |
(1) | Your participation in the Plan does not constitute an acquired right. |
(2) | The Plan and your participation in the Plan are offered by Amgen Inc. on a wholly discretionary basis. |
(3) | Your participation in the Plan is voluntary. |
(4) | Amgen Inc. and its Affiliates are not responsible for any decrease in the value of the Option granted and/or Shares issued under the Plan. |
(1) | Su participación en el Plan de ninguna manera constituye un derecho adquirido. |
(2) | El Plan y su participación en el mismo son ofrecidos por Amgen Inc. de forma completamente discrecional. |
(3) | Su participación en el Plan es voluntaria. |
(4) | Amgen Inc. y sus Afiliados no son responsables de ninguna disminución en el valor de la opción otorgada y/o de las Acciones Comunes emitidas mediante el Plan. |
• | The Company's most recent Annual Report (Form 10-K), Quarterly Report (Form 10-Q) and published financial statements (in Form 10-K or Form 10-Q): www.amgen.com |
• | The Plan, the Plan Prospectus and the Agreement: www.benefits.ml.com |
Plan: | Amgen Inc. 2009 Equity Incentive Plan, as amended and/or restated from time to time |
Grant Price: | $________ |
Vesting Date: | Means the vesting date indicated in the Vesting Schedule |
Vesting Schedule: | Means the schedule of vesting set forth under Vesting Details |
Vesting Details: | Means the presentation (tabular or otherwise) of the Vesting Date and the quantity of Shares vesting. |
a. | General. Subject to the terms and conditions of this Agreement, on each Vesting Date, the Number of Units indicated on the Vesting Schedule shall vest, provided that you have remained continuously and actively employed with the Company or an Affiliate (as defined in the Plan) through each applicable Vesting Date, unless (i) [your employment has terminated due to your Voluntary Termination (as defined in paragraph (d) of this Section I below) ]*2, [(ii)] you experience a Qualified Termination (as defined below), or (iii)[(ii)] as otherwise determined by the Company in the exercise of its discretion as provided in paragraph (f) of this Section I. The Units represent an unfunded, unsecured promise by the Company to deliver Shares. Only whole Shares shall be issued upon vesting of the Units, and the Company shall be under no obligation to issue any fractional Shares to you. If your employment with the Company or an Affiliate is terminated for any reason or for no reason, including if your active employment is terminated by the Company or an Affiliate without Cause (as defined below), or in the event of any other termination of your active employment caused directly or indirectly by the Company or an Affiliate, except as otherwise provided in paragraphs (b), (c), [(d), ]*(1) (e) or (f) of this Section I below, your unvested Units shall automatically expire and terminate on the date of termination of your active employment. Notwithstanding anything herein to the contrary, the Vesting Schedule may be accelerated (by notice in writing) by the Company in its sole discretion at any time during the term of the Units. In addition, if not prohibited by local law, vesting may be suspended by the Company in its sole discretion during a leave of absence as provided from time to time according to Company policies and practices. |
b. | Permanent and Total Disability. Notwithstanding the provisions in paragraph (a) above, if your employment with the Company or an Affiliate terminates due to your Permanent and Total Disability (as defined below), then the vesting of Units granted under this Agreement shall be accelerated, subject to your execution of a general release and waiver in a form provided by the Company, to vest as of the day immediately preceding such termination of your employment with respect to all Units granted hereunder, except that if the Units were granted in the calendar year in which such termination occurs, the Units shall be accelerated to vest with respect to a number of Units equal to the number of Units subject to this Agreement multiplied by a fraction, the numerator of which is the number of complete months you remained continuously and actively employed during such calendar year, and the denominator of which is twelve (12). |
c. | Death. Notwithstanding the provisions in paragraph (a) above, if your employment with the Company or an Affiliate terminates due to your death, then the vesting of Units granted under this Agreement shall be accelerated to vest as of the day immediately preceding your death with respect to all Units granted hereunder, except that if the Units were granted in the calendar year in which your death occurs the Units shall be accelerated to vest with respect to a number of Units equal to the number of Units subject to this Agreement multiplied by a fraction, the numerator of which is the number of complete months you remained continuously and actively employed during such calendar year, and the denominator of which is twelve (12). |
d. | [Retirement. Notwithstanding the provisions in paragraph (a) above, if you terminate your employment with the Company or an Affiliate due to your voluntary termination (and such voluntary termination is not the result of Permanent and Total Disability (as defined below)) after you are at least sixty-five (65) years of age, or after you are at least fifty-five (55) years of age and have been an employee of the Company and/or an Affiliate for at least ten (10) years in the aggregate as determined by the Company in its sole discretion according to Company policies and practices as in effect from time to time (“Voluntary Termination”), then the Units will vest pursuant to the Vesting Schedule without regard to the termination of employment prior to the Vesting Date, subject to your execution of a general release and waiver in a form provided by the Company, with respect to all Units granted hereunder; provided, however, that if the Units were granted in the calendar year in which the Voluntary Termination occurs, the Units will vest pursuant to the Vesting Schedule provided in the Award Notice only with respect to a number of Units equal to the number of Units subject to this Agreement multiplied by a fraction, the numerator of which is the number of complete months you remained continuously and actively employed during such calendar year, and the denominator of which is twelve (12); notwithstanding the definition of Voluntary Termination set forth above, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in your jurisdiction that would likely result in the favorable treatment upon Voluntary Termination described above being deemed unlawful and/or discriminatory, then the Committee will not apply the favorable treatment described above.][Reserved]*3 |
e. | Qualified Termination after a Change of Control. Notwithstanding the provisions in paragraph (a) above, in the event of a Qualified Termination (as defined below), then, to the extent permitted by applicable law, the vesting of Units granted under this Agreement shall be accelerated to vest as of the day immediately prior to the Qualified Termination. |
f. | Continued Vesting. Notwithstanding the provisions in paragraph (a) above, the Company may in its sole discretion at any time during the term of this Agreement, in writing, otherwise provide that the Units will vest pursuant to the Vesting Schedule without regard to the termination of employment prior to the Vesting Date, subject to any terms and conditions that the Company may determine. |
(a) | if you are an employee who participates in the Change of Control Plan (as defined below), your termination of employment within two (2) years following a Change of Control (i) by the Company other than for Cause, Disability (as defined below), or as a result of your death or (ii) by you for Good Reason (as defined in the Change of Control Plan); or |
(b) | if you are an employee who does not participate in the Change of Control Plan or the Change of Control Plan is no longer in effect, your termination of employment within two (2) years following a Change of Control by the Company other than for Cause, Disability (as defined below), or as a result of your death; |
a. | the terms and conditions of this Agreement, including Appendix A, are deemed modified to the extent necessary or advisable to comply with applicable foreign laws or facilitate the administration of the Plan; |
b. | if applicable, the effectiveness of your award of Units is conditioned upon its compliance with any applicable foreign laws, regulations, rules or local governmental regulatory exemption and subject to receipt of any required foreign regulatory approvals; |
c. | to the extent necessary to comply with applicable foreign laws, the payment of any earned Units shall be made in cash or Common Stock, at the Company's election; and |
d. | the Company may take any other action, before or after an award of Units is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. |
(1) | Your participation in the Plan does not constitute an acquired right. |
(2) | The Plan and your participation in the Plan are offered by Amgen Inc. on a wholly discretionary basis. |
(3) | Your participation in the Plan is voluntary. |
(4) | Amgen Inc. and its Affiliates are not responsible for any decrease in the value of the Units granted and/or Shares issued under the Plan. |
(1) | Su participación en el Plan de ninguna manera constituye un derecho adquirido. |
(2) | El Plan y su participación en el mismo son ofrecidos por Amgen Inc. de forma completamente discrecional. |
(3) | Su participación en el Plan es voluntaria. |
(4) | Amgen Inc. y sus Afiliados no son responsables de ninguna disminución en el valor de Unidades o de las Acciones Comunes emitidas mediante el Plan. |
Plan: | Amgen Inc. 2009 Equity Incentive Plan, as amended and/or restated from time to time |
Program | Amgen Inc. 2009 Performance Award Program, as amended from time to time |
Resolutions: | The Resolutions of the Compensation and Management Development Committee of the Board of Directors of Amgen Inc., adopted on _____________, regarding the Amgen Inc. 2009 Performance Award Program. as amended from time to time |
Performance Period: | The Performance Period beginning on ____, 20__ and ending on _______, 20__ |
Vesting Date: | Means the vesting date indicated in the Vesting Schedule |
Vesting Schedule: | Means the schedule of vesting set forth under Vesting Details |
Vesting Details: | Means the presentation (tabular or otherwise) of the Vesting Date and the quantity of Shares vesting. |
(1) | Your participation in the Plan and the Program do not constitute an acquired right. |
(2) | The Plan and your participation in the Plan and the Program are offered by Amgen Inc. on a wholly discretionary basis. |
(3) | Your participation in the Plan and the Program is voluntary. |
(4) | Amgen Inc. and its Affiliates are not responsible for any decrease in the value of any Shares issued with respect to the Award. |
(1) | Su participación en el Plan y en el Programa de ninguna manera constituye un derecho adquirido. |
(2) | Su participación en Plan y en el Programa son ofrecidos por Amgen Inc. de forma completamente discrecional. |
(3) | Su participación en el Plan y en el Programa es voluntaria. |
(4) | Amgen Inc. y sus Afiliados no son responsables de ninguna disminución en el valor de las Acciones Comunes emitidas mediante el Plan. |
(a) | The Agreement evidencing the Bonanni Retention RSU Grant is hereby amended to add the following section: |
(b) | If Consultant fails to make himself available to provide the minimum number of days of required Services on or before December 31, 2013, or otherwise breaches the terms of this Agreement, or breaches any of the terms of Proprietary Agreement, then Amgen may, in its sole and absolute discretion, recapture from Consultant, and Consultant shall deliver and pay to Amgen, any and all shares of Amgen Inc. stock issued in respect of the Bonanni Retention RSU Grant (including any shares withheld to pay taxes due with respect to such grant, the “Vested Shares”) that Consultant received pursuant to Section 2.1(a), plus any gross proceeds from the Consultant's sale of such Vested Shares (“Recapture”). Within ten days after receiving notice from the Company of any Recapture, the Consultant shall deliver the Vested Shares and to the extent Consultant has sold or otherwise disposed of or transferred the Vested Shares, Consultant shall pay to Amgen the fair market value of such Vested Shares on the date of such sale, disposal, or transfer. In the event of a Recapture, Amgen shall promptly pay Consultant the minimum wage associated with the actual hours of Services performed by Consultant under this Agreement. |
(a) | the Services to be performed under the Agreement do not and will not involve the counseling or promotion of a business arrangement or other activity that violates any applicable law; |
(b) | solely for purposes of applying Treasury Regulations Section 1.409A-1(h)(1), that Consultant worked more than 40 hours on average per week during the last 36 months of his employment at Amgen; |
(c) | that Consultant has not entered into any agreement, whether written or oral, that conflicts with the terms of this Agreement; |
(d) | that Consultant has the full power and authority to enter into this Agreement; |
(e) | that Consultant is not presently: (1) the subject of a debarment action or debarred pursuant to the Generic Drug Enforcement Act of 1992; (2) the subject of a disqualification proceeding or is disqualified as a clinical investigator pursuant to 21 C.F.R. § 312.70; or (3) the subject of an exclusion proceeding or excluded from participation in any federal health care program under 42 C.F.R. Part 1001 et seq. Consultant shall notify Amgen's General Counsel or his designee immediately upon any inquiry, or the commencement of any such proceeding, concerning Consultant; and |
(f) | that Consultant has no financial or personal interests that would prevent Consultant from performing and completing the Services in an objective and non-biased manner. |
(a) | shall act as an independent consultant with no authority to obligate Amgen by contract or otherwise and not as an employee or officer of Amgen; |
(b) | notwithstanding anything contained in this Agreement to the contrary, shall not initiate or participate in any communications with the United States Food & Drug Administration or any other governmental agency concerning the subject matter hereof unless required by law or requested to do so by Amgen and, then, only upon prior consultation with Amgen's General Counsel or his designee; |
(c) | shall not, directly or indirectly, (i) recruit, solicit or induce any Amgen employee to terminate his/her employment or relationship with Amgen during the term of this Agreement and two years after the expiration of this Agreement, or (ii) entice, induce or encourage any of Amgen's employees to engage in any activity which, were it done by Consultant, would violate any provision of the Proprietary Agreement; |
(d) | shall not, during the term of this Agreement, enter into any other agreement, whether written or oral, which would conflict with Consultant's obligations hereunder; |
(e) | agrees that at least ten (10) business days in advance of commencing services for any other employer or client, Consultant will disclose in writing to Amgen's Senior Vice |
(f) | agrees that at no time will Consultant purchase or sell Amgen securities while aware of Amgen Confidential Information (as defined below) that constitutes material, non-public information pursuant to the Federal Securities Laws of the United States; |
(g) | shall not assign or subcontract performance of this Agreement or any of the Services to any person, firm, company or organization without Amgen's prior written consent; |
(h) | agrees to timely perform the Services; |
(i) | agrees to utilize and provide Amgen with accurate and complete data in rendering the Services; and |
(j) | agrees to return all Amgen property in Consultant's custody or control, in addition to information in accordance with Subsection 4.2, upon termination of this Agreement. |
AMGEN INC. By: /s/ Brian M. McNamee Brian M. McNamee Senior Vice President, Human Resources | CONSULTANT /s/ Fabrizio Bonanni Fabrizio Bonanni |
1. | DEFINITIONS |
If to Company: XXX-XXXXXXXXXX@amgen.com With a copy to: XXXXXX XXXXXXX, Company Program Manager at XXXXXXX@amgen.com | If to Provider: XXXXX.XXX@am.jll.com With a copy to: XXXXX XXXX, Provider Program Manager at XXXXX.XXXX@am.jll.com |
IN WITNESS THEREOF, the authorized representatives of the parties have executed this Amendment 4 to the Agreement as of the date first set forth above. | |
JONES LANG LASALLE AMERICAS, INC. | AMGEN INC. |
By: /s/ Scott S. Darling | By: /s/ Sergio de Andrade |
Name: Scott S. Darling | Name: Sergio de Andrade |
Title: Account Executive, SRVP Jones Lang LaSalle Corporate Solutions | Title: Senior Manager |
1. | I have reviewed this Quarterly Report on Form 10-Q of Amgen Inc.; |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and |
(d) | Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 3, 2013 | /S/ ROBERT A. BRADWAY |
Robert A. Bradway | |
Chairman of the Board, | |
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Amgen Inc.; |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and |
(d) | Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 3, 2013 | /S/ JONATHAN M. PEACOCK |
Jonathan M. Peacock | |
Executive Vice President and Chief Financial Officer |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 3, 2013 | /S/ ROBERT A. BRADWAY |
Robert A. Bradway | |
Chairman of the Board, | |
President and Chief Executive Officer |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 3, 2013 | /S/ JONATHAN M. PEACOCK |
Jonathan M. Peacock Executive Vice President and Chief Financial Officer |
Derivative instruments (Details 4) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Assets | ||
Total derivative assets, fair value | $ 138 | $ 111 |
Liabilities | ||
Total derivative liabilities, fair value | 93 | 65 |
Derivatives designated as hedging instrument [Member]
|
||
Assets | ||
Total derivative assets, fair value | 137 | 110 |
Liabilities | ||
Total derivative liabilities, fair value | 93 | 64 |
Derivatives not designated as hedging instrument [Member]
|
||
Assets | ||
Total derivative assets, fair value | 1 | 1 |
Liabilities | ||
Total derivative liabilities, fair value | 0 | 1 |
Cross currency swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | Derivatives designated as hedging instrument [Member]
|
||
Assets | ||
Total derivative assets, fair value | 8 | 65 |
Cross currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | Derivatives designated as hedging instrument [Member]
|
||
Liabilities | ||
Total derivative liabilities, fair value | 72 | 6 |
Foreign currency contracts [Member] | Other current assets/Other noncurrent assets [Member] | Derivatives designated as hedging instrument [Member]
|
||
Assets | ||
Total derivative assets, fair value | 107 | 45 |
Foreign currency contracts [Member] | Other current assets [Member] | Derivatives not designated as hedging instrument [Member]
|
||
Assets | ||
Total derivative assets, fair value | 1 | 1 |
Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | Derivatives designated as hedging instrument [Member]
|
||
Liabilities | ||
Total derivative liabilities, fair value | 21 | 58 |
Foreign currency contracts [Member] | Accrued liabilities [Member] | Derivatives not designated as hedging instrument [Member]
|
||
Liabilities | ||
Total derivative liabilities, fair value | 0 | 1 |
Interest rate swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | Derivatives designated as hedging instrument [Member]
|
||
Assets | ||
Total derivative assets, fair value | 22 | |
Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | Derivatives designated as hedging instrument [Member]
|
||
Liabilities | ||
Total derivative liabilities, fair value | $ 0 |
Available-for-sale investments (Details 2) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair values of available-for-sale debt security investments by contractual maturity | ||
Maturing in one year or less | $ 3,916 | $ 7,175 |
Maturing after one year through three years | 4,926 | 5,014 |
Maturing after three years through five years | 6,919 | 6,286 |
Maturing after five years through ten years | 1,763 | 1,620 |
Mortgage- and asset-backed securities | 3,314 | 3,596 |
Total available-for-sale investments | 20,900 | 23,745 |
Total interest-bearing securities [Member]
|
||
Fair values of available-for-sale debt security investments by contractual maturity | ||
Total available-for-sale investments | $ 20,838 | $ 23,691 |
Derivative instruments (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts and Interest Rates for Cross-Currency Swaps [Table Text Block] | The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions):
|
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Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | The effective portion of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges was as follows (in millions):
|
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Location in the Condensed Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges | The location in the Condensed Consolidated Statements of Income and the effective portion of the gain/(loss) reclassified out of AOCI into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):
|
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Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for the derivative instruments not designated as hedging instruments | The location in the Condensed 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):
|
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Fair values of derivatives included in the Condensed Consolidated Balance Sheets | The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):
|
Contingencies and commitments (Details)
|
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
2012 Settlement Qui Tam [Member]
actions
|
Mar. 31, 2013
Additional Other Qui Tam [Member]
actions
|
Dec. 19, 2012
Settled Litigation Related to Sales and Marketing Practices [Member]
states
|
|
Loss Contingencies [Line Items] | |||
Number of states | 49 | ||
Number of claims settled/dismissed | 1 | 2 |
Fair value measurement (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Assets: | ||
Total available-for-sale investments | $ 20,900 | $ 23,745 |
Fair Value, Measurements, Recurring [Member]
|
||
Derivative Assets: | ||
Interest rate swap contracts | 22 | |
Total assets | 21,038 | 23,856 |
Derivative Liabilities: | ||
Contingent consideration obligations in connection with a business combination | 222 | 221 |
Total liabilities | 315 | 286 |
Fair Value, Measurements, Recurring [Member] | Foreign currency contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 108 | 46 |
Derivative Liabilities: | ||
Foreign currency contracts | 21 | 59 |
Fair Value, Measurements, Recurring [Member] | Cross currency swap contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 8 | 65 |
Derivative Liabilities: | ||
Foreign currency contracts | 72 | 6 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 2,707 | 4,458 |
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - U.S. [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,019 | 1,030 |
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - Foreign and other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,466 | 1,608 |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Financial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 3,977 | 3,361 |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Industrial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 4,457 | 4,380 |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 479 | 452 |
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,817 | 1,829 |
Fair Value, Measurements, Recurring [Member] | Other mortgage- and asset-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,497 | 1,767 |
Fair Value, Measurements, Recurring [Member] | Money market mutual funds [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,742 | 2,620 |
Fair Value, Measurements, Recurring [Member] | Other short-term interest-bearing securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,677 | 2,186 |
Fair Value, Measurements, Recurring [Member] | Equity securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 62 | 54 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
|
||
Derivative Assets: | ||
Interest rate swap contracts | 0 | |
Total assets | 4,511 | 7,132 |
Derivative Liabilities: | ||
Contingent consideration obligations in connection with a business combination | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Foreign currency contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 0 | 0 |
Derivative Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Cross currency swap contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 0 | 0 |
Derivative Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | U.S. Treasury securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 2,707 | 4,458 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - U.S. [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - Foreign and other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Financial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Industrial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Residential mortgage-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other mortgage- and asset-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market mutual funds [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,742 | 2,620 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other short-term interest-bearing securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Equity securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 62 | 54 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member]
|
||
Derivative Assets: | ||
Interest rate swap contracts | 22 | |
Total assets | 16,527 | 16,724 |
Derivative Liabilities: | ||
Contingent consideration obligations in connection with a business combination | 0 | 0 |
Total liabilities | 93 | 65 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 108 | 46 |
Derivative Liabilities: | ||
Foreign currency contracts | 21 | 59 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross currency swap contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 8 | 65 |
Derivative Liabilities: | ||
Foreign currency contracts | 72 | 6 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | U.S. Treasury securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - U.S. [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,019 | 1,030 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,466 | 1,608 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 3,977 | 3,361 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 4,457 | 4,380 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 479 | 452 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,817 | 1,829 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,497 | 1,767 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Money market mutual funds [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other short-term interest-bearing securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 1,677 | 2,186 |
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Equity securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member]
|
||
Derivative Assets: | ||
Interest rate swap contracts | 0 | |
Total assets | 0 | 0 |
Derivative Liabilities: | ||
Contingent consideration obligations in connection with a business combination | 222 | 221 |
Total liabilities | 222 | 221 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Foreign currency contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 0 | 0 |
Derivative Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Cross currency swap contracts [Member]
|
||
Derivative Assets: | ||
Foreign currency contracts | 0 | 0 |
Derivative Liabilities: | ||
Foreign currency contracts | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | U.S. Treasury securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - U.S. [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - Foreign and other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Financial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Industrial [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Other [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Residential mortgage-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other mortgage- and asset-backed securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Money market mutual funds [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other short-term interest-bearing securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Equity securities [Member]
|
||
Assets: | ||
Total available-for-sale investments | $ 0 | $ 0 |
Financing arrangements (Details Textual) (0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes) [Member], USD $)
In Millions, unless otherwise specified |
1 Months Ended | 0 Months Ended | 1 Months Ended |
---|---|---|---|
Feb. 28, 2013
|
May 01, 2013
Subsequent Event [Member]
|
Feb. 28, 2013
Value in Excess of Principal [Member]
|
|
Debt Instruments [Line Items] | |||
Repayment of convertible notes | $ 2,500 | $ 99 | |
Cash settlement of convertible bond hedge | 99 | ||
Number of shares acquired by warrants issued in connection with debt | 32 | ||
Exercise price of warrants (in usd per warrant) | 104.80 | ||
Net cash settlement of warrants | $ 100 |
Derivative instruments (Details 3) (Foreign currency contracts [Member], Interest and other income, net [Member], USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Foreign currency contracts [Member] | Interest and other income, net [Member]
|
||
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for our derivative instruments not designated as hedging instruments | ||
Amount of gain (loss) recognized in interest and other income, net | $ (16) | $ (10) |
Income taxes
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rates for the three months ended March 31, 2013 and 2012, are different from the federal statutory rates primarily as a result of indefinitely invested earnings of our foreign operations. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be invested indefinitely outside of the United States. In addition, the effective tax rate for the three months ended March 31, 2013 was reduced by two significant events that occurred during the quarter. First, we settled our examination with the Internal Revenue Service (IRS) for the years ended December 31, 2007, 2008 and 2009 during the quarter. We agreed to certain adjustments proposed by the IRS arising out of the examination and remeasured our unrecognized tax benefits (UTBs) accordingly. Also, the federal research and development (R&D) tax credit expired as of December 31, 2011, and the American Taxpayer Relief Act of 2012, which included extension of the federal R&D tax credit for 2013 and retroactively for 2012, was enacted during the three months ended March 31, 2013. Therefore, our effective tax rate for the three months ended March 31, 2013 includes a benefit for both the full-year 2012 federal R&D tax credit, recorded discretely in the quarter, and the effect of the estimated 2013 federal R&D tax credit on our annual effective tax rate. The effective tax rates for the three months ended March 31, 2013 and 2012, were further reduced by foreign tax credits associated with the Puerto Rico excise tax described below. Commencing January 1, 2011, Puerto Rico imposes a temporary excise tax on the purchase of goods and services from a related manufacturer in Puerto Rico. The excise tax is imposed on the gross intercompany purchase price of the goods and services and was initially effective for a six-year period beginning in 2011, with the excise tax rate declining in each year (4% in 2011, 3.75% in 2012, 2.75% in 2013, 2.5% in 2014, 2.25% in 2015 and 1% in 2016). During the three months ended March 31, 2013, the Puerto Rico government enacted an amendment to the excise tax legislation which increased the excise tax rate to 4% effective July 1, 2013 through December 31, 2017. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred. Excluding the impact of the Puerto Rico excise tax, our effective tax rates for the three months ended March 31, 2013 and 2012, would have been (0.8)% and 18.5%, respectively. Several 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. The U.S. federal income tax examinations for years ended on or before December 31, 2009 and the California state income tax examinations for years ended on or before December 31, 2005 have been completed. During the three months ended March 31, 2013, the gross amount of our UTBs increased by approximately $80 million as a result of tax positions taken during the current year and decreased by approximately $190 million due to the federal and state tax impacts of settlement of our U.S. tax returns with the IRS relating to years ended December 31, 2007, 2008, and 2009. The settlement resulted in recognition of a net tax benefit of approximately $185 million, including interest, penalties and the federal benefit of state taxes. Substantially all of the UTBs as of March 31, 2013, if recognized, would affect our effective tax rate. As of March 31, 2013, we believe it is reasonably possible that our gross liabilities for UTBs may decrease by approximately $90 million within the succeeding 12 months due to the resolution of state audits. |