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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, 2002
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, 2002 and 2001
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| 2 | ||
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| 4 | ||
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Report of Independent Auditors
Amgen Puerto Rico, Inc., 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) as of December 31, 2002 and 2001, and for the related statements of changes in net assets available for 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, 2002 and 2001, 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 forming 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, 2002, is presented for purposes of additional analysis and is not a required part of the 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 audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
May 2, 2003
Stamp No. 1842913
affixed to
original of
this report.
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Table of Contents
The Retirement and Savings Plan for Amgen Manufacturing, Limited
Statements of Net Assets Available for Benefits
| December 31, | ||||||
| 2002 |
2001 | |||||
| Assets |
||||||
| Investments at fair value |
$ | 21,292,678 | $ | 22,073,758 | ||
| Contribution receivable |
136,579 | 89,540 | ||||
| Net assets available for benefits |
$ | 21,429,257 | $ | 22,163,298 | ||
See accompanying notes.
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The Retirement and Savings Plan for Amgen Manufacturing, Limited
Statements of Changes in Net Assets Available for Benefits
| Years ended December 31 |
||||||||
| 2002 |
2001 |
|||||||
| Additions to net assets: |
||||||||
| Employee contributions Employer contributions |
$
|
1,550,850 1,683,078 |
|
$
|
1,575,554 1,376,942 |
| ||
| Interest and dividend income |
220,940 | 225,401 | ||||||
| Total additions |
3,454,868 | 3,177,897 | ||||||
| Deductions from net assets: |
||||||||
| Benefits paid |
(629,254 | ) | (782,784 | ) | ||||
| Realized/unrealized loss |
(3,559,655 | ) | (2,838,059 | ) | ||||
| Total deductions |
(4,188,909 | ) | (3,620,843 | ) | ||||
| Net decrease |
(734,041 | ) | (442,946 | ) | ||||
| Net assets available for benefits at beginning of year |
22,163,298 | 22,606,244 | ||||||
| Net assets available for benefits at end of year |
$ | 21,429,257 | $ | 22,163,298 | ||||
See accompanying notes.
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The Retirement and Savings Plan for Amgen Manufacturing, Limited
December 31, 2002
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 Puerto Rico, Inc. On January 1, 2002, Amgen Manufacturing, Limited (the Company) assumed the responsibilities of the work force of Amgen Puerto Rico, Inc. The Plan, as amended, is intended to qualify under sections 1165(a) and (e) of the Puerto Rico Internal Revenue Code of 1994, as amended (the PR Code), sections 401(a) and 401(k) of the Internal Revenue Code of 1986 (the US Code) (see Note 4 – “Income Tax Status”) 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 2002 and 2001, participants could elect to contribute up to 10%, of their pretax annual compensation (up to a maximum contribution of $8,000). Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans.
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 Savings Plan for Amgen Manufacturing, Limited
Notes To Financial Statements—(continued)
1. Description of the Plan (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’s 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 and losses. 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 2002 and 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 full 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 the Company’s 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 7.68% to 11.38%) 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.
Plan Termination
While the Company established the plan with the expectation that it will continue indefinitely, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA.
Trustee
Banco Santander acts as the Plan’s trustee.
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The Retirement and Savings Plan for Amgen Manufacturing, Limited
Notes To Financial Statements—(continued)
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Investment Income and Losses
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.
| 3. | Investments |
The fair value of individual investments that represent 5% or more of the Plan’s net assets are as follows:
| December 31 | ||||||
| 2002 |
2001 | |||||
| Amgen Inc. Common Stock |
$ | 9,542,266 | $ | 10,512,940 | ||
| Fidelity Magellan Fund |
2,693,672 | 3,014,112 | ||||
| Fidelity Spartan U.S. Equity Index |
1,592,417 | 1,883,289 | ||||
| Fidelity OTC Portfolio |
1,410,080 | 1,624,104 | ||||
| Fidelity Growth and Income Portfolio |
1,129,172 | 1,200,860 | ||||
| $ | 16,367,607 | $ | 18,235,305 | |||
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The Retirement and Savings Plan for Amgen Manufacturing, Limited
Notes To Financial Statements—(continued)
3. Investments (continued)
During 2002 and 2001, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows:
| Year ended December 31 |
||||||||
| 2002 |
2001 |
|||||||
| Amgen Inc. Common Stock |
$ | (1,469,185 | ) | $ | (1,360,466 | ) | ||
| Mutual funds |
(2,090,470 | ) | (1,477,593 | ) | ||||
| $ | (3,559,655 | ) | $ | (2,838,059 | ) | |||
4. Income Tax Status
In June 1997, the Company received a determination letter from the Puerto Rico Treasury Department, stating that the Plan is qualified, in form, under the PR Code 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 PR Code to maintain its qualification. The Company received a determination letter from the Internal Revenue Service (the IRS) dated April 25, 2000 stating that the Plan is qualified under the US Code. The Company believes the Plan was being operated in compliance with the applicable requirements of the PR Code and the US Code, except for the timely adoption of certain amendments. During 2002, the Plan did not adopt amendments to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001 (the EGTRRA) within the period specified by the IRS. In order to correct this event of noncompliance, the Plan sponsor will submit an application under the Voluntary Compliance Program (the VCP) of the Employee Plans Compliance Resolution System in accordance with the procedures set forth in Revenue Procedure 2003-44. The Plan sponsor will take such corrective action as may be required in connection with the VCP filing to maintain the Plan’s qualified tax-exempt status, including adoption of a good faith EGTRRA amendment within the time period specified in the compliance statement issued by the IRS.
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 Savings Plan for Amgen Manufacturing, Limited
EIN: 98-0210484 Plan: 35322
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2002
| Description of | Current | ||||
| Identity of Issue |
Investment |
Value | |||
| Amgen Inc. Stock Fund* | Common stock 146,197 shares |
$ | 9,542,266 | ||
| Fidelity Magellan Fund | Mutual fund 34,114 shares |
2,693,672 | |||
| Fidelity Growth and Income Portfolio | Mutual fund 37,254 shares |
1,129,172 | |||
| Fidelity Retirement Money Market Portfolio | Money market portfolio |
573,668 | |||
| Fidelity Overseas Fund | Mutual fund 24,083 shares |
529,835 | |||
| Fidelity Spartan U.S. Equity Index | Mutual fund 51,121 shares |
1,592,417 | |||
| Fidelity Short-Term Bond | Mutual fund 107,028 shares |
962,178 | |||
| Fidelity OTC Portfolio | Mutual fund 58,974 shares |
1,410,080 | |||
| Fidelity Asset Manager | Mutual fund 11,378 shares |
184,620 | |||
| Fidelity Asset Manager: Growth | Mutual fund 32,482 shares |
388,811 | |||
| Fidelity Asset Manager: Income | Mutual fund 19,431 shares |
211,020 | |||
| Fidelity U.S. Bond Index Portfolio | Mutual fund 26,768 shares |
300,869 | |||
| Fidelity Contrafund | Mutual fund 12,158 shares |
469,289 | |||
| Participant loans* | Interest rates from 7.68 % to 11.38% |
1,304,781 | |||
| $ | 21,292,678 | ||||
| * | 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: 6/30/03 |
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
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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 2, 2003, 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, 2002.
/s/ ERNST & YOUNG LLP
San Juan, Puerto Rico
June 30, 2003