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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 11-K
(Mark One)
x |
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2001 |
OR
¨ |
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 000-12477
RETIREMENT AND SAVINGS PLAN FOR AMGEN MANUFACTURING, LIMITED
State Road 31, Kilometer 24.6, Juncos, Puerto Rico 00777
(Full title of the plan)
AMGEN INC.
(Name of issuer of the securities held)
| One Amgen Center Drive, Thousand Oaks, California |
91320-1799 | |
| (Address of principal executive offices) |
(Zip Code) |
Table of Contents
THE RETIREMENT AND SAVINGS PLAN FOR
AMGEN MANUFACTURING, LIMITED
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
Years ended December
31, 2001 and 2000
| 3 | ||
| Audited Financial Statements |
||
| 4 | ||
| 5 | ||
| 6 | ||
| Supplemental Schedule |
||
| 11 |
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Amgen Manufacturing, Limited, as Named
Fiduciary,
and the Plan Participants of the Retirement
and Savings Plan for Amgen Manufacturing, Limited.
We have audited the accompanying statements of net assets available for benefits of The Retirement and Savings Plan for Amgen Manufacturing, Limited (the Plan) at December
31, 2001 and 2000, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2001 and 2000, and the changes in its net assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States.
Our audits were performed for the
purpose of expressing an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2001, is presented for purpose of additional analysis and is not a required part
of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is
the responsibility of the Plan’s management. This supplemental schedule has been subjected to the auditing procedures applied in our audit of the 2001 financial statements and, in our opinion, are fairly stated, in all material respects, in
relation to the 2001 financial statements taken as a whole.
| /s/ ERNST & YOUNG LLP |
May 17, 2002
Stamp No. 1770799
affixed to
original of
this report.
3
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THE RETIREMENT AND SAVINGS PLAN FOR AMGEN MANUFACTURING, LIMITED
| December 31, | ||||||
| 2001 |
2000 | |||||
| ASSETS |
||||||
| Investments at fair value |
$ |
22,073,758 |
$ |
22,506,843 | ||
| Contributions receivable |
|
89,540 |
|
99,401 | ||
| |
|
|
| |||
| Net assets available for benefits |
$ |
22,163,298 |
$ |
22,606,244 | ||
| |
|
|
| |||
See accompanying notes.
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THE RETIREMENT AND SAVINGS PLAN FOR AMGEN MANUFACTURING, LIMITED
| Year ended December 31, |
||||||||
| 2001 |
2000 |
|||||||
| Additions to net assets: |
||||||||
| Employee contributions |
$ |
1,575,554 |
|
$ |
1,354,522 |
| ||
| Employer contributions |
|
1,376,942 |
|
|
1,069,713 |
| ||
| Interest and dividend income |
|
225,401 |
|
|
1,002,651 |
| ||
| |
|
|
|
|
| |||
| Total additions |
|
3,177,897 |
|
|
3,426,886 |
| ||
| Deductions from net assets: |
||||||||
| Benefits paid |
|
(782,784 |
) |
|
(768,458 |
) | ||
| Realized/unrealized loss |
|
(2,838,059 |
) |
|
(1,556,378 |
) | ||
| |
|
|
|
|
| |||
| Total deductions |
|
(3,620,843 |
) |
|
(2,324,836 |
) | ||
| Net (decrease) increase |
|
(442,946 |
) |
|
1,102,050 |
| ||
| Net assets available for benefits at beginning of year |
|
22,606,244 |
|
|
21,504,194 |
| ||
| |
|
|
|
|
| |||
| Net assets available for benefits at end of year |
$ |
22,163,298 |
|
$ |
22,606,244 |
| ||
| |
|
|
|
|
| |||
See accompanying notes.
5
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THE RETIREMENT AND SAVINGS PLAN FOR AMGEN MANUFACTURING, LIMITED
December 31, 2001
1. Description of the Plan
The following description of The Retirement and Savings Plan for Amgen Manufacturing, Limited (the Plan) provides only general information. Participants should refer to the Plan document for a more
complete description of the Plan’s provisions.
General
The Plan was established effective May 1, 1992 (amended and restated effective April 1, 1996) as a defined contribution plan covering substantially all domestic employees
of Amgen Manufacturing Limited (the Company). The Plan, as amended, is intended to qualify under sections 1165(a) and (e) of the Puerto Rico Income Tax Act of 1954 (the Act), sections 401(a) and 401(k) of the Internal Revenue Code of 1986 (the Code)
and section 407(d)(3)(A) of the Employee Retirement Income Security Act of 1974 (ERISA). On January 1, 2002, the name of the Plan was changed from The Retirement and Savings Plan for Amgen Puerto Rico, Inc. as Amgen Manufacturing, Limited assumed
the responsibilities of the work force of Amgen Puerto Rico, Inc.
Contributions
During 2001 and 2000, participants could elect to contribute up to 10% of their pretax annual compensation (up to a maximum contribution
of $10,500 in each year). Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Effective January 1, 2002, participants may elect to contribute up to 30% of their
pretax annual compensation (up to a maximum of $11,000 in 2002).
Each pay period, the Company makes a
contribution of 100% of the first 5% of eligible compensation contributed by the employee (Matching Contribution). In addition, the Company supplements the matching contribution for all eligible employees, whether or not they have elected to make
contributions to the Plan, with a contribution equal to 3% of each eligible employee’s compensation (Core Contribution).
Participants select the funds in which their contributions are to be invested, electing among various investment alternatives. Participants may elect for their contributions to be invested in more than one fund; however, no more than
50% of their total contributions may be invested in the Amgen Inc. Stock Fund. Participants may change their investment options at any time.
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THE RETIREMENT AND SAVING PLAN FOR AMGEN MANUFACTURING, LIMITED
NOTES TO FINANCIAL STATEMENTS—(Continued)
Vesting
Participants are immediately vested with respect to their individual contributions and earnings thereon. Participants become vested in their allocated Company Matching
Contributions and related earnings at a rate of 25% per year for each of their first four years of service completed.
The Company Core Contributions and related earnings become 100% vested upon completion of five years of service, with no partial vesting. Generally, employees must work a minimum of 1,000 hours within a Plan year to receive vesting
for that year of service. Company contributions become fully vested upon attainment of normal retirement age, disability, or death.
Participant Accounts
Each participant’s account is credited with the
participant’s contributions and an allocation of (a) Company contributions and (b) Plan earnings. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account. Forfeited balances of
terminated participants’ nonvested accounts during 2001 were used to reduce future Company contributions.
Payment of Benefits
Upon termination of service due to death, disability (as defined by the Plan) or retirement, a participant
may elect to receive an amount equal to the value of the participant’s vested account balance in either a lump-sum payment in cash and/or shares of the Company’s common stock. The number of shares of Company common stock to be paid is
based on the quoted market value of such stock on the date the Plan is valued following employee notification.
Certain restrictions apply to withdrawals of amounts from the Plan while a participant continues to be employed by the Company.
Participant Loans
Subject to Company approval, participants can generally obtain a loan
from their account up to the lesser of an amount equal to 50% of the participant’s vested account balance or $50,000, less any outstanding loans. The loans bear interest at average borrowing rates of certain major banks (ranging from 8.00% to
9.40%) and are generally payable in installments over periods ranging from one to five years. Principal and interest payments are allocated to the participant’s account.
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THE RETIREMENT AND SAVING PLAN FOR AMGEN MANUFACTURING, LIMITED
NOTES TO FINANCIAL STATEMENTS—(Continued)
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of
termination, participants will become 100% vested in their accounts.
Trustee
Banco Santander acts as the Plan’s trustee.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Investment Income
Dividend income is recognized on the ex-dividend date and interest income is recorded on an accrual basis. Unrealized gains and losses on investments are measured by the change in the difference between the fair value and cost of the
securities held at the beginning and end of the period. Realized gains and losses from security transactions are recorded based on the weighted-average cost of securities sold.
Investment Valuation
Investments in mutual funds and Amgen
Inc. common stock are valued at current market values determined through reference to public market information on the last business day of the Plan year. Participant loans are valued at their outstanding balances, which approximate fair value.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those estimates.
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THE RETIREMENT AND SAVING PLAN FOR AMGEN MANUFACTURING, LIMITED
NOTES TO FINANCIAL STATEMENTS—(Continued)
3. Investments
The fair value of individual investments that represent 5% or more of the Plan’s net assets are as follows:
| December 31, | ||||||
| 2001 |
2000 | |||||
| Amgen Inc. Stock Fund |
$ |
10,512,940 |
$ |
11,229,275 | ||
| Fidelity Magellan Fund |
|
3,014,112 |
|
3,021,450 | ||
| Fidelity Spartan U.S. Equity Index |
|
1,883,289 |
|
2,028,150 | ||
| Fidelity OTC Portfolio |
|
1,624,104 |
|
1,811,568 | ||
| Fidelity Growth and Income Portfolio |
|
1,200,860 |
|
1,160,008 | ||
During 2001 and 2000, the Plan’s investments (including gains
and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:
| Year ended December 31, |
||||||||
| 2001 |
2000 |
|||||||
| Amgen Inc. Stock Fund |
$ |
(1,360,466 |
) |
$ |
678,346 |
| ||
| Mutual funds |
|
(1,477,593 |
) |
|
(2,234,724 |
) | ||
| |
|
|
|
|
| |||
| $ |
(2,838,059 |
) |
$ |
(1,556,378 |
) | |||
| |
|
|
|
|
| |||
4. Income Tax Status
In April 1996, the Company received a determination letter from the Puerto Rico Treasury Department, stating that the Plan is qualified,
in form, under the Puerto Rico Income Tax Act and, therefore, the related trust forming a part of the Plan is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Act to maintain its qualification. The Company
believes the Plan is being operated in compliance with the applicable requirements of the Act and, therefore, believes that the Plan is qualified and the related trust is tax exempt. Subsequent amendments have been structured to, and are intended
to, maintain the Plan’s tax qualified status. The plan sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan’s qualified status.
5. Services Provided by the Company
The Company provides certain administrative and record keeping services for the Plan at no cost to the Plan participants. In addition, the Company has paid the trustee fees and other related costs on behalf of the Plan.
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THE RETIREMENT AND SAVING PLAN FOR AMGEN MANUFACTURING, LIMITED
NOTES TO FINANCIAL STATEMENTS—(Continued)
6. Subsequent Decline in
Market Value (Unaudited)
As of June 20, 2002, the fair market value of Amgen common stock declined 27% from
the fair market value as of December 31, 2001. Based on the number of shares of common stock held by the plan at December 31, 2001, the fair market value of the Amgen Inc. Stock Fund on June 20, 2002 would have been $7,696,575.
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SUPPLEMENTAL SCHEDULE
THE RETIREMENT AND SAVINGS PLAN FOR AMGEN MANUFACTURING, LIMITED
EIN: 98-0210484
Plan: 35322
December 31, 2001
| Identity of Issue |
Description of Investment |
Current Value | |||
| Amgen Inc.* |
Common stock 138,274 shares |
$ |
10,512,940 | ||
| Fidelity Magellan Fund |
Mutual fund 28,921 shares |
|
3,014,111 | ||
| Fidelity Growth &Income Portfolio |
Mutual fund 32,126 shares |
|
1,200,860 | ||
| Fidelity Retirement Money Market Portfolio |
Money market portfolio |
|
417,256 | ||
| Fidelity Overseas Fund |
Mutual fund 20,197 shares |
|
553,807 | ||
| Fidelity Spartan U.S. Equity Index |
Mutual fund 46,341 shares |
|
1,883,289 | ||
| Fidelity Short-Term Bond |
Mutual fund 85,835 shares |
|
755,345 | ||
| Fidelity OTC Portfolio |
Mutual fund 52,105 shares |
|
1,624,104 | ||
| Fidelity Asset Manager |
Mutual fund 8,756 shares |
|
135,721 | ||
| Fidelity Asset Manager: Growth |
Mutual fund 25,752 shares |
|
369,287 | ||
| Fidelity Asset Manager: Income |
Mutual fund 16,445 shares |
|
186,324 | ||
| Fidelity U.S. Bond Index Portfolio |
Mutual fund 17,514 shares |
|
189,152 | ||
| Fidelity Contrafund |
Mutual fund 9,624 shares |
|
411,624 | ||
| Participant loans* |
Interest rates from 8.00% to 9.40% |
|
819,938 | ||
| |
| ||||
| $ |
22,073,758 | ||||
| |
| ||||
* |
Party-in-interest |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
| Retirement and Savings Plan for Amgen Manufacturing, Limited (Name of Plan) | ||||||||
| Date: 6/25/02 |
By: |
/S/ RICHARD D. NANULA | ||||||
| Richard D. Nanula Chief
Financial Officer Amgen Manufacturing, Limited | ||||||||
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THE RETIREMENT AND SAVINGS PLAN FOR AMGEN
MANUFACTURING, LIMITED
INDEX TO EXHIBIT
| Consent of Ernst & Young LLP, Independent Auditors |
Exhibit 23 |
13
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by
reference in the Registration Statement (Form S-8 No. 33-47605) pertaining to The Retirement and Savings Plan for Amgen Manufacturing, Limited of our report dated May 17, 2002, with respect to the financial statements and supplemental schedule of
The Retirement and Savings Plan for Amgen Manufacturing, Limited included in this Annual Report (Form 11-K) for the year ended December 31, 2001.
| /s/ ERNST & YOUNG LLP |
San Juan, Puerto Rico
June 17, 2002