Amgen (AMGN) 10-Q 10 Aug 09 2009 Q2 Quarterly report Financial data

Condensed Consolidated Statemen

Condensed Consolidated Statements Of Income Alternative (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Revenues:
Product sales	$3,634	$3,692	$6,872	$7,229
Other revenues	79	72	149	148
Total revenues	3,713	3,764	7,021	7,377
Operating expenses:
Cost of sales (excludes amortization of certain acquired intangible assets presented below)	531	515	1,008	1,061
Research and development	693	809	1,326	1,503
Selling, general and administrative	910	904	1,708	1,778
Amortization of certain acquired intangible assets	73	73	147	147
Other charges	49	284	54	294
Total operating expenses	2,256	2,585	4,243	4,783
Operating income	1,457	1,179	2,778	2,594
Interest expense, net	150	137	297	286
Interest and other income, net	50	88	108	202
Income before income taxes	1,357	1,130	2,589	2,510
Provision for income taxes	88	224	301	504
Net income	$1,269	$906	$2,288	$2,006
Earnings per share:
Basic	1.25	0.84	2.24	1.85
Diluted	1.25	0.84	2.23	1.85
Shares used in calculation of earnings per share:
Basic	1,013	1,078	1,023	1,083
Diluted	1,017	1,081	1,027	1,086

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets Classified (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$2,968	$1,774
Marketable securities	8,997	7,778
Trade receivables, net	2,182	2,073
Inventories	2,061	2,075
Other current assets	1,488	1,521
Total current assets	17,696	15,221
Property, plant and equipment, net	5,800	5,879
Intangible assets, net	2,780	2,988
Goodwill	11,339	11,339
Other assets	1,225	1,000
Total assets	38,840	36,427
Current liabilities:
Accounts payable	635	504
Accrued liabilities	2,913	3,382
Current portion of other long-term debt	1,000	1,000
Total current liabilities	4,548	4,886
Convertible notes	4,383	4,257
Other long-term debt	6,088	4,095
Other non-current liabilities	2,461	2,304
Commitments and contingencies	0	0
Stockholders' equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750 shares authorized; outstanding - 1,015 shares in 2009 and 1,047 shares in 2008	26,720	26,441
Accumulated deficit	(5,423)	(5,673)
Accumulated other comprehensive income	63	117
Total stockholders' equity	21,360	20,885
Total liabilities and stockholders' equity	$38,840	$36,427

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets Classified (Parenthetical) (USD $)
Share data in Millions	Jun. 30, 2009	Dec. 31, 2008
Common stock, par value	0.0001	0.0001
Common stock, shares authorized	2,750	2,750
Common stock, outstanding	1,015	1,047

2_Condensed Consolidated Statem

Condensed Consolidated Statements Of Cash Flows Indirect (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash flows from operating activities:
Net income	$2,288	$2,006
Depreciation and amortization	520	531
Stock-based compensation expense	123	133
Other items, net	111	36
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net	(108)	(200)
Inventories	50	(69)
Other current assets	(48)	46
Accounts payable	48	360
Accrued income taxes	(79)	(23)
Other accrued liabilities	(355)	105
Deferred revenue	(12)	276
Net cash provided by operating activities	2,538	3,201
Cash flows from investing activities:
Purchases of property, plant and equipment	(256)	(335)
Cash paid for acquisitions, net of cash acquired	0	(48)
Purchases of marketable securities	(7,483)	(3,422)
Proceeds from sales of marketable securities	5,365	3,081
Proceeds from maturities of marketable securities	964	370
Other	(32)	61
Net cash used in investing activities	(1,442)	(293)
Cash flows from financing activities:
Repurchases of common stock	(1,997)	(1,549)
Repayment of debt	0	(1,000)
Net proceeds from issuance of debt	1,980	992
Net proceeds from issuance of common stock in connection with the Company's equity award programs	97	33
Other	18	(16)
Net cash provided by (used in) financing activities	98	(1,540)
Increase in cash and cash equivalents	1,194	1,368
Cash and cash equivalents at beginning of period	1,774	2,024
Cash and cash equivalents at end of period	$2,968	$3,392

Notes to Condensed Consolidated

Notes to Condensed Consolidated Financial Statements
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. Summary of significant accounting policies	1. Summary of significant accounting policies Business Amgen Inc. is a global biotechnology company that discovers, develops, manufactures and markets human therapeutics based on advances in cellular and molecular biology. Basis of presentation The financial information for the three and six months ended June30, 2009 and 2008 is unaudited but includes all adjustments (consisting of only normal recurring adjustments, unless otherwise indicated), which Amgen Inc., including its subsidiaries (referred to as Amgen, the Company, we, our or us), considers necessary for a fair presentation of the results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December31, 2008. Change in method of accounting for convertible debt instruments Effective January1, 2009, we adopted Financial Accounting Standards Boards (FASB) Staff Position (FSP) No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1) and, as required by this new standard, we retrospectively applied this change in accounting to all prior periods for which we had applicable outstanding convertible debt. Under this method of accounting, the debt and equity components of our convertible notes are bifurcated and accounted for separately. The equity components of our convertible notes, including our 2011 Convertible Notes, 2013 Convertible Notes and 2032 Modified Convertible Notes, are included in Common stock and additional paid-in capital in the Condensed Consolidated Balance Sheets, with a corresponding reduction in the carrying values of these convertible notes as of the date of issuance or modification, as applicable. The reduced carrying values of our convertible notes are being accreted back to their principal amounts through the recognition of non-cash interest expense. This results in recognizing interest expense on these borrowings at effective rates approximating what we would have incurred had we issued nonconvertible debt with otherwise similar terms. See Note 2, Change in method of accounting for convertible debt instruments and Note 9, Financing arrangements. Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its wholly owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Fair value measurement We adopted the provisions of the
2. Change in method of accounting for convertible debt instruments	2. Change in method of accounting for convertible debt instruments As discussed in Note 1, Summary of significant accounting policies - Change in method of accounting for convertible debt instruments, effective January1, 2009, we adopted FSP APB 14-1 and, as required by this new standard, we retrospectively applied this change in accounting to all prior periods for which we had applicable outstanding convertible debt. The following illustrates the impact of adopting FSP APB 14-1 on the Condensed Consolidated Statements of Income for the three and six months ended June30, 2009 and 2008 and on the Condensed Consolidated Balance Sheets as of June30, 2009 and December31, 2008 (in millions, except per share information): Three months ended June30, 2009 Excludingthe effect of FSP APB 14-1 EffectofFSP APB 14-1 Includingthe effect of FSP APB 14-1 Operating income $ 1,457 $ - $ 1,457 Interest expense, net 88 62 150 Interest and other income, net 50 - 50 Income before income taxes 1,419 (62) 1,357 Provision for income taxes 111 (23) 88 Net income $ 1,308 $ (39) $ 1,269 Earnings per share: Basic $ 1.29 $ (0.04) $ 1.25 Diluted $ 1.29 $ (0.04) $ 1.25 Three months ended June30, 2008 As originally reported Effect of FSP APB 14-1 Revised Operating income $ 1,179 $ - $ 1,179 Interest expense, net 79 58 137 Interest and other income, net 88 - 88 Income before income taxes 1,188 (58) 1,130 Provision for income taxes 247 (23) 224 Net income $ 941 $ (35) $ 906 Earnings per share: Basic $ 0.87 $ (0.03) $ 0.84 Diluted $ 0.87 $ (0.03) $ 0.84 Six months ended June30, 2009 Excluding the effect of FSP APB 14-1 Effect of FSP APB 14-1 Including the effect of FSP APB 14-1 Operating income $ 2,778 $ - $ 2,778 Interest expense, net 174 123 297 Interest and other income, net 108 - 108 Income before income taxes 2,712 (123) 2,589 Provision for income taxes 347 (46) 301 Net income $ 2,365 $ (77) $ 2,288 Earnings per share: Basic $ 2.31 $ (0.07) $ 2.24 Diluted $ 2.30 $ (0.07) $ 2.23 Six months ended June30, 2008 Asoriginally reported EffectofFSP APB 14-1 Revised Operating income $ 2,594 $ - $ 2,594 Interest expense, net 171 115 286 Interest and other income, net 202 - 202 Income before income taxes 2,625 (115) 2,510 Provision for income taxes 548 (44) 504 Net income $ 2,077 $ (71) $ 2,006 Earnings per share: Basic $
3. Income taxes	3. Income taxes The effective tax rates for the three and six months ended June30, 2009 and June30, 2008 are different from the statutory rate primarily as a result of indefinitely invested earnings of our foreign operations. In addition, the effective tax rate for the three and six months ended June30, 2009 was further reduced by favorable resolution of certain non-routine transfer pricing matters with the Internal Revenue Service (IRS) for prior periods. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be invested indefinitely outside the United States. One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes can arise with these tax authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income among various tax jurisdictions because of differing interpretations of tax laws and regulations. We are no longer subject to U.S. federal income tax examinations for years ending on or before December31, 2004 or to California state income tax examinations for years ending on or before December31, 2003. The IRS is currently examining our U.S. income tax returns for the years ended December31, 2005 and 2006. As of June30, 2009, the Company and the IRS have agreed to certain non-routine transfer pricing adjustments and the Company has accordingly adjusted its liability for unrecognized tax benefits (UTBs). The remainder of this examination is currently anticipated to be completed in 2009. During the three and six months ended June30, 2009, the gross amount of our UTBs increased approximately $55 million and $145 million, respectively, as a result of tax positions taken during the current year. During the six months ended June30, 2009, the gross amount of our UTBs decreased approximately $170 million primarily as a result of resolving certain non-routine transfer pricing matters related to prior periods. The majority of our UTBs as of June30, 2009, if recognized, would affect our effective tax rate. As of June30, 2009, we believe that it is reasonably possible that our gross liabilities for UTBs may decrease by approximately $100 million within the succeeding twelve months due to potential tax settlements.
4. Earnings per share	4. Earnings per share Basic earnings per share (EPS) is based upon the weighted-average number of common shares outstanding. Diluted EPS is based upon the weighted-average number of common shares and dilutive potential common shares outstanding. Potential common shares outstanding principally include stock options, restricted stock (including restricted stock units) and other equity awards under our employee compensation plans and potential issuance of stock upon the assumed conversion of our 2011 Convertible Notes, 2013 Convertible Notes and 2032 Modified Convertible Notes, as discussed below, and upon the assumed exercise of our warrants using the treasury stock method (collectively Dilutive Securities). The convertible note hedges purchased in connection with the issuance of our 2011 Convertible Notes and 2013 Convertible Notes are excluded from the calculation of diluted EPS as their impact is always anti-dilutive. Our 2011 Convertible Notes, 2013 Convertible Notes and 2032 Modified Convertible Notes are considered Instrument C securities as defined by EITF No.90-19 Convertible Bonds with Issuer Option to Settle for Cash upon Conversion. Therefore, only the shares of common stock potentially issuable with respect to the excess of the notes conversion value over their principal amount or accreted value, if any, are considered as dilutive potential common shares for purposes of calculating diluted EPS. For the three and six months ended June30, 2009 and 2008, the conversion values for our convertible notes were less than the related principal amounts or accreted value and, accordingly, no shares were assumed to be issued for purposes of computing diluted EPS. For further information regarding our convertible notes, see Note 9, Financing arrangements. The following table sets forth the computation for basic and diluted EPS (in millions, except per share information): Threemonthsended June30, Sixmonthsended June30, 2009 2008 2009 2008 Income (Numerator): Net income for basic and diluted EPS $ 1,269 $ 906 $ 2,288 $ 2,006 Shares (Denominator): Weighted-average shares for basic EPS 1,013 1,078 1,023 1,083 Effect of Dilutive Securities 4 3 4 3 Weighted-average shares for diluted EPS 1,017 1,081 1,027 1,086 Basic EPS $ 1.25 $ 0.84 $ 2.24 $ 1.85 Diluted EPS $ 1.25 $ 0.84 $ 2.23 $ 1.85 For the three and six months ended June30, 2009, there were employee stock options, calculated on a weighted average basis, to purchase 51million and 48million shares, respectively, with exercise prices greater than the average market prices of common stock for these periods that are not included in the computation of diluted EPS as their impact would have been anti-dilutive. For both the three and six months ended June30, 2008, there were employee stock options, calculated on a weighted average basis, to purchase 53million shares with exercise prices greater than the average
5. Related party transactions	5.Related party transactions We own a 50% interest in KA, a corporation formed in 1984 with Kirin Holdings Company, Limited (Kirin) for the development and commercialization of certain products based on advanced biotechnology. We account for our interest in KA under the equity method and include our share of KAs profits or losses in Selling, general and administrative in the Condensed Consolidated Statements of Income. During the three and six months ended June30, 2009, our share of KAs profits was $17 million and $36 million, respectively. During the three and six months ended June30, 2008, our share of KAs profits was $17 million and $31 million, respectively. As of June30, 2009 and December31, 2008, the carrying value of our equity method investment in KA, net of dividends paid, was $392 million and $356 million, respectively, and is included in non-current Other assets in the Condensed Consolidated Balance Sheets. KAs revenues consist of royalty income related to its licensed technology rights. All of our rights to manufacture and market certain products, including darbepoetin alfa, pegfilgrastim, granulocyte colony-stimulating factor (G-CSF) and recombinant human erythropoietin, are pursuant to exclusive licenses from KA, which we currently market under the brand names Aranesp, Neulasta, NEUPOGEN and EPOGEN, respectively. KA receives royalty income from us, as well as from Kirin, JJ and F. Hoffmann-La Roche Ltd. (Roche) under separate product license agreements for certain geographic areas outside of the United States. During the three and six months ended June30, 2009, KA earned royalties from us of $81 million and $152 million, respectively. During the three and six months ended June30, 2008, KA earned royalties from us of $83 million and $158 million, respectively. These amounts are included in Cost of sales (excludes amortization of certain acquired intangible assets) in the Condensed Consolidated Statements of Income. As of June30, 2009 and December31, 2008, we owed KA $88 million and $82 million, respectively, which were included in Accrued liabilities in the Condensed Consolidated Balance Sheets. KAs expenses primarily consist of costs related to RD activities conducted on its behalf by Amgen and Kirin. KA pays Amgen and Kirin for such services at negotiated rates. During the three and six months ended June30, 2009, we earned revenues from KA of $25 million and $54 million, respectively, for certain RD activities performed on KAs behalf. During the three and six months ended June30, 2008, we earned revenues from KA of $27 million and $59 million, respectively, for certain RD activities performed on KAs behalf. These amounts are included in Other revenues in the Condensed Consolidated Statements of Income.
6. Restructuring	6.Restructuring On August15, 2007, we announced a plan to restructure our worldwide operations in order to improve our cost structure. This restructuring plan was primarily the result of regulatory and reimbursement developments that began in 2007 involving erythropoiesis-stimulating agent (ESA) products, including our marketed ESA products Aranesp and EPOGEN , and the resulting impact on our operations. Key components of our restructuring plan initially included: (i)worldwide staff reductions, (ii)rationalization of our worldwide network of manufacturing facilities and, to a lesser degree, changes to certain RD capital projects and (iii)abandoning leases primarily for certain RD facilities that will not be used in our operations. Subsequently, we identified certain additional initiatives designed to further assist in improving our cost structure, including outsourcing certain non-core business functions, most notably certain of our information systems infrastructure services, as well as abandoning leases for certain additional facilities that will no longer be used in our operations. As of March31, 2009, we have completed all of the actions and incurred all related costs initially included in our restructuring plan. As of June30, 2009, we currently estimate that we will incur an additional $15 million to $30 million of costs, including related implementation costs, with respect to the subsequently identified initiatives. Through June30, 2009, we have incurred $942 million of costs related to the above-noted actions. The charges included $217 million of separation costs, $473 million of asset impairments, $148 million of accelerated depreciation and $104 million of other net charges, which primarily include $161 million of loss accruals for leases, $10 million loss on the disposal of certain less significant marketed products, $29 million for implementation costs associated with certain cost saving initiatives and $19 million of other charges, offset by $115 million of cost recoveries from Wyeth. The following tables summarize the charges (credits) recorded during the three and six months ended June30, 2009 and 2008 related to the above-noted actions by type of activity (in millions): Three months ended June30, 2009 Separation costs Asset impairments Other Total Cost of sales (excludes amortization of certain acquired intangible assets) $ - $ 1 $ - $ 1 RD (3) 5 1 3 SGA (2) - 5 3 Other charges 29 - - 29 $ 24 $ 6 $ 6 $ 36 Three months ended June30, 2008 RD $ 1 $ - $ - $ 1 Other charges - 12 9 21 $ 1 $ 12 $ 9 $ 22 Six months ended June30, 2009 Cost of sales (excludes amortization of certain acquired intangible assets) $ - $ 1 $ - $ 1 RD (3) 5 1 3 SGA (2) - 19 17 Other charges 34 - - 34 $ 29 $ 6 $ 20 $
7. Available-for-sale securities	7.Available-for-sale securities We consider our investment portfolio and marketable equity investments available-for-sale as defined in SFAS No.115, Accounting for Certain Investments in Debt and Equity Securities. Accordingly, these investments are recorded at fair value. For the three months ended June30, 2009 and 2008, realized gains related to these investments were $32 million and $24 million, respectively, and realized losses related to these investments were $16 million and $7 million, respectively. For the six months ended June30, 2009 and 2008, realized gains related to these investments were $68 million and $76 million, respectively, and realized losses related to these investments were $55 million and $36 million, respectively. The cost of securities sold is based on the specific identification method. The fair values of available-for-sale investments by type of security, contractual maturity and classification in the Condensed Consolidated Balance Sheets are as follows (in millions): June30, 2009 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Type of security: U.S. Treasury securities $ 1,276 $ 9 $ (12) $ 1,273 Obligations of U.S. government agencies and FDIC guaranteed bank debt 4,060 73 (6) 4,127 Corporate debt securities 2,920 42 (12) 2,950 Mortgage and asset backed securities 331 3 - 334 Other short-term interest bearing securities 3,084 - - 3,084 Total debt securities 11,671 127 (30) 11,768 Equity securities 67 12 (8) 71 $ 11,738 $ 139 $ (38) $ 11,839 December31, 2008 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Type of security: U.S. Treasury securities $ 1,896 $ 58 $ (2) $ 1,952 Obligations of U.S. government agencies and FDIC guaranteed bank debt 3,396 100 (3) 3,493 Corporate debt securities 1,432 10 (72) 1,370 Mortgage and asset backed securities 508 2 (6) 504 Other short-term interest bearing securities 2,126 - - 2,126 Total debt securities 9,358 170 (83) 9,445 Equity securities 65 - (8) 57 $ 9,423 $ 170 $ (91) $ 9,502 Contractual maturity June30, 2009 December31, 2008 Maturing in one year or less $ 3,759 $ 3,179 Maturing after one year through three years 5,015 3,724 Maturing after three years 2,994 2,542 Total debt securities 11,768 9,445 Equity securities 71 57 $ 11,839 $ 9,502 Classification in the Condensed Consolidated Balance Sheets June 30, 2009 December 31, 2008 Cash and cash equivalents $ 2,968 $ 1,774 Marketable
8. Inventories	8. Inventories Inventories consisted of the following (in millions): June30, 2009 December31, 2008 Raw materials $ 121 $ 112 Work in process 1,371 1,519 Finished goods 569 444 $ 2,061 $ 2,075
9. Financing arrangements	9.Financing arrangements The following table reflects the carrying value of our long-term borrowings under our various financing arrangements as of June30, 2009 and December31, 2008 (in millions): June30, 2009 December31, 2008 0.125% convertible notes due 2011 (2011 Convertible Notes) $ 2,273 $ 2,206 0.375% convertible notes due 2013 (2013 Convertible Notes) 2,028 1,970 5.85% notes due 2017 (2017 Notes) 1,099 1,099 4.85% notes due 2014 (2014 Notes) 1,000 1,000 4.00% notes due 2009 (2009 Notes) 1,000 1,000 5.70% notes due 2019 (2019 Notes) 998 - 6.40% notes due 2039 (2039 Notes) 995 - 6.375% notes due 2037 (2037 Notes) 899 899 6.15% notes due 2018 (2018 Notes) 499 499 6.90% notes due 2038 (2038 Notes) 498 498 Zero coupon modified convertible notes due in 2032 (2032 Modified Convertible Notes) 82 81 Other 100 100 Total borrowings 11,471 9,352 Less current portion 1,000 1,000 Total non-current debt $ 10,471 $ 8,352 2019 Notes and 2039 Notes In January 2009, we issued $1.0 billion aggregate principal amount of notes due in 2019 (the 2019 Notes) and $1.0 billion aggregate principal amount of notes due in 2039 (the 2039 Notes) in a registered offering. The 2019 Notes and 2039 Notes pay interest at fixed annual rates of 5.70% and 6.40%, respectively. The 2019 Notes and 2039 Notes may be redeemed at any time at our option, in whole or in part, at 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest, if any, and a make-whole amount, as defined. Upon the occurrence of a change in control triggering event, as defined, we may be required to purchase for cash all or a portion of the 2019 Notes and the 2039 Notes at a price equal to 101% of the principal amount of the notes plus accrued interest. The total debt discount on issuance and debt issuance costs were $7 million and $13 million, respectively, and are being amortized over the lives of the notes. Convertible notes Effective January1, 2009, we adopted FSP APB 14-1 and, as required by this new standard, we retrospectively applied this change in accounting to all prior periods for which we had applicable outstanding convertible debt (see Note 2, Change in method of accounting for convertible debt instruments). Under this method of accounting, the debt and equity components of our convertible notes are bifurcated and accounted for separately. The equity components of our convertible notes, including our 2011 Convertible Notes, 2013 Convertible Notes and 2032 Modified Convertible Notes, are included in Common stock and additional paid-in capital in the Condensed Consolidated Balance Sheets, with a corresponding reduction in the carrying values of these convertible notes as of the date of issuance or modification, as applicable. The reduced carrying values of our convertible notes are being accreted back to their principal amounts through the recognition of non-cash interest expense. This results in recognizing
10. Stockholders' equity	10.Stockholders equity Stock repurchase programs A summary of activity under our stock repurchase programs for the three and six months ended June30, 2009 and 2008 is as follows (in millions): 2009 2008 Shares Dollars Shares Dollars First quarter 37.5 $ 1,997 - $ - Second quarter - - 32.7 1,549 (1) Total 37.5 $ 1,997 32.7 $ 1,549 (1) The total cost of shares repurchased during the three and six months ended June30, 2008 excludes approximately $19.1 million paid in July 2008 in connection with the final settlement of an accelerated share repurchase program (ASR) entered into in May 2008. As of June30, 2009, $2.2 billion remained available for stock repurchases as authorized by our Board of Directors. The manner of purchases, the amount we spend and the number of shares repurchased will vary based on a variety of factors, including the stock price, blackout periods in which we are restricted from repurchasing shares, and our credit rating and may include private block purchases as well as market transactions. 2009 Equity Incentive Plan On May6, 2009, the stockholders approved the Amgen Inc. 2009 Equity Incentive Plan (the 2009 Plan) for non-employee members of our Board of Directors, the employees and consultants of Amgen, its subsidiaries and affiliates. After May6, 2009, no further awards may be made under our existing equity plans. The 2009 Plan authorizes the issuance of 100,000,000 shares, subject to reduction for awards granted under our existing plans after December31, 2008 through May6, 2009. To the extent any awards granted under existing plans after December31, 2008 or any awards granted under the 2009 Plan expire, or are forfeited without the issuance of shares, or are settled for cash in lieu of shares, the shares subject to such awards will be added back into the pool of available shares in accordance with the terms of the 2009 Plan.
11. Fair value measurement	11.Fair value measurement In determining the fair value of its financial assets and liabilities, the Company uses various valuation approaches. SFAS 157 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Companys assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: Level1 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 based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement. Our derivative assets and liabilities include interest rate swaps and foreign currency forward and option contracts. The fair values of these derivatives are determined using models based on market observable inputs, including interest rate curves and both forward and spot prices for foreign currencies. The following fair value hierarchy table presents information about each major category of the Companys financial assets and liabilities measured at fair value on a recurring basis as of June30, 2009 and December31, 2008 (in millions): Fair value measurement at June30, 2009 using: Quotedpricesin activemarketsfor identicalassets (Level 1) Significantother observableinputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Available-for-sale securities: U.S. Treasury securities $ 1,273 $ - $ - $ 1,273 ObligationsofU.S.governmentagencies andFDICguaranteedbankdebt - 4,127 - 4,127 Corporate debt securities - 2,950 - 2,950
12. Derivative instruments	12.Derivative instruments The Company is exposed to certain risks related to its business operations. The primary risks that we manage by using derivatives are foreign exchange rate risk and interest rate risk. We use financial instruments, including foreign currency forward, foreign currency option and interest rate swap contracts, to reduce our risk to these exposures. We do not use derivatives for speculative trading purposes and are not a party to any leveraged derivatives. We recognize all of our derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. Fair value is determined in accordance with SFAS 157 (see Note 11, Fair value measurement). The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For derivatives designated as hedges under SFAS No.133 Accounting for Derivative Instruments and Hedging Activities (SFAS 133), we formally assess, both at inception and periodically thereafter, whether the hedging derivatives are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. Our derivatives that are not designated and do not qualify as hedges under SFAS 133 are adjusted to fair value through current earnings. We enter into foreign currency forward and option contracts to reduce our exposure to possible changes in values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates, primarily associated with sales denominated in Euros. Increases or decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are partially offset by the corresponding increases and decreases in our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations on our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales over a three-year time horizon. As of June30, 2009, we had outstanding foreign currency forward and options contracts, primarily Euro-based, with notional amounts of $2.6 billion and $382 million, respectively. In connection with the issuance of long-term debt, we may enter into forward interest rate contracts in order to hedge the variability in cash flows due to changes in the applicable Treasury rate between the time we entered into these contracts and the time the related debt is issued. In connection with the issuance of our 2019 Notes and 2039 Notes in January 2009, we entered into forward interest rate contracts related to a portion of these borrowings. These foreign currency forward and option contracts and forward interest rate contracts are designated as cash flow hedges, and accordingly, the effective portion of gains and losses on these contracts are reported in Accumulated other comprehensive income in the Condensed Consolidated Balance Sheet
13. Commitments and Contingencies	13.Commitments and Contingencies In the ordinary course of business, we are involved in various legal proceedings and other matters that are complex in nature and have outcomes that are difficult to predict. In accordance with SFAS 5, Accounting for Contingencies, we record accruals for such contingencies to the extent that we conclude that it is probable that a liability will be incurred and the amount of the related loss can be reasonably estimated. See Note 10, Contingencies to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December31, 2008 and Note 11, Contingencies to our Condensed Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the quarter ended March31, 2009 for further discussion of certain of our legal proceedings and other matters. Certain recent developments concerning our legal proceedings and other matters are discussed below: Average Wholesale Price (AWP) Litigation The U.S. District Court for the District of Massachusetts (the Massachusetts District Court) held a May28, 2009 status conference where mediationwith respect to all non-settling MDL Proceeding cases was discussed. Final approval hearing of the Track Two settlement is set for October21, 2009. Robert J. Swanston v. TAP Pharmaceutical Products, Inc., et al. On June8, 2009, the Maricopa County, Arizona Superior Court granted defendants motion for summary judgment. State of Arizona, etc., et al. v. Abbott Laboratories, Inc., et al. On June29, 2009 Amgen and Immunex were dismissed from the case after reaching a settlement with the state of Arizona. State of Illinois v. Abbott Laboratories, Inc., et al. On July2, 2009, Amgen and Immunex were dismissed from the case after reaching a settlement with the state of Illinois. State of Mississippi v. Abbott Laboratories, Inc., et al. On July7, 2009, Amgen and Immunex were dismissed from the case after reaching a settlement with the state of Mississippi. Roche Matters Amgen Inc. v. F. Hoffmann-La Roche Ltd., et al. Oral argument before the United States Court of Appeals for the Federal Circuit (the Federal Circuit) covering the matters on appeal was held on June4, 2009. No decision has been issued from the Federal Circuit Court. U.S. International Trade Commission (ITC) Jurisdiction over the investigation has now been returned to the ITC from the Federal Circuit. On June22, 2009 the Roche respondents filed a motion for a stay and Amgen and the Office of Unfair Import Investigations (OUII) opposed. On July10, 2009 the Roche respondents filed a motion to terminate the investigation based on a consent order and Amgen and the OUII opposed. No decision has been issued on either motion. Amgen Inc., et al., v. Ariad Pharmaceuticals, Inc. (Ariad) On June1, 2009, the Federal Circuit affirmed the U.S. District Court for the District of Delawares (the Delaware District Court) ruling on claim construction and non-infringement in favor of Amgen. Human Genome Sciences (HGS) Litigations On May29, 2009, HGS filed an action under 35 U.S.C. 146 against Amgen in the Delaware District Court to review a Decision on Priority and Judgment
14. Other charges	14. Other charges In the three and six months ended June30, 2009, we recorded loss accruals for settlements of certain commercial legal proceedings aggregating $20 million. In the three and six months ended June30, 2008, we recorded loss accruals for settlements of certain commercial legal proceedings aggregating $263 million, principally related to the settlement of the Ortho Biotech antitrust suit. Such expenses are included in Other charges in the Condensed Consolidated Statements of Income.

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Aug. 03, 2009	Jun. 30, 2008
Entity [Text Block]
Trading Symbol	AMGN
Entity Registrant Name	AMGEN INC
Entity Central Index Key	0000318154
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,015,476,612
Entity Public Float			$49,808,027,303