Prepared by R.R. Donnelley Financial -- Form 11-K for fiscal year ended December 31, 2001
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
AMGEN RETIREMENT AND SAVINGS PLAN
(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)
Amgen Retirement and Savings Plan
Financial Statements
and Supplemental Schedule
Years ended December 31, 2001 and 2000
Amgen Inc., as Named Fiduciary, and the Plan
Participants
of the Amgen Retirement and Savings Plan
We have audited the accompanying statements of net assets available for benefits of the Amgen Retirement and Savings Plan as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of the Plans 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 forming an opinion on the financial statements taken as a whole. The
accompanying supplemental schedule of assets (held at end of year) at December 31, 2001, 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 Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plans management. The 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
June 12, 2002
Los Angeles, California
1
AMGEN RETIREMENT AND SAVINGS PLAN
|
|
December 31,
|
|
|
2001
|
|
200
|
Assets |
|
|
|
|
|
|
Investments at fair value |
|
$ |
704,081,616 |
|
$ |
727,246,010 |
|
|
|
|
|
|
|
Net assets available for benefits |
|
$ |
704,081,616 |
|
$ |
727,246,010 |
|
|
|
|
|
|
|
See accompanying notes.
2
AMGEN RETIREMENT AND SAVINGS PLAN
|
|
Year ended December 31,
|
|
|
|
2001
|
|
|
2000
|
|
Additions to net assets: |
|
|
|
|
|
|
|
|
Employee contributions |
|
$ |
45,545,235 |
|
|
$ |
46,797,803 |
|
Employer contributions |
|
|
37,865,221 |
|
|
|
33,796,325 |
|
Interest and dividend income |
|
|
9,278,622 |
|
|
|
44,070,900 |
|
|
|
|
|
|
|
|
|
|
Total additions |
|
|
92,689,078 |
|
|
|
124,665,028 |
|
Deductions from net assets: |
|
|
|
|
|
|
|
|
Benefits paid |
|
|
(28,158,334 |
) |
|
|
(22,246,707 |
) |
Realized/unrealized losses |
|
|
(87,695,138 |
) |
|
|
(71,859,757 |
) |
|
|
|
|
|
|
|
|
|
Total deductions |
|
|
(115,853,472 |
) |
|
|
(94,106,464 |
) |
Net (decrease) increase |
|
|
(23,164,394 |
) |
|
|
30,558,564 |
|
Net assets available for benefits at beginning of year |
|
|
727,246,010 |
|
|
|
696,687,446 |
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits at end of year |
|
$ |
704,081,616 |
|
|
$ |
727,246,010 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
3
AMGEN RETIREMENT AND SAVINGS PLAN
December 31, 2001
1. Description of Plan
The
following description of the Amgen Retirement and Savings Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plans provisions.
General
The Plan
was established effective April 1, 1985 (amended and restated effective January 1, 1990, January 1, 1993, April 1, 1996 and October 23, 2000, respectively), as a defined contribution plan covering substantially all domestic employees of Amgen Inc.
(the Company). The Plan, as amended, is intended to qualify under 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).
Contributions
During 2001 and 2000, participants could elect to contribute up to 15% 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 employees
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.
Vesting
Participants are immediately vested with respect to their individual contributions and earnings thereon. During 2001, participants vested in the Company contributions upon
4
AMGEN RETIREMENT AND SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
1. Description of Plan (continued)
Vesting (continued)
completing a requisite number of years of service. Employees
had to work a minimum of 1,000 hours within a plan year to receive vesting for that year of service. For the Matching Contribution, participants vested in their allocated Matching Contribution and related earnings on a pro rata basis after four
years of service. For the Core Contribution, participants would become vested in their allocated Core Contribution and related earnings after five years of service, with no partial vesting during the five years. Company contributions became fully
vested upon attainment of normal retirement age, disability or death.
Effective January 1, 2002, participants
became fully vested with respect to previously unvested Matching Contributions and Core Contributions credited to their respective account through December 31, 2001, and are immediately vested with respect to Matching Contributions and Core
Contributions credited to their respective account after January 1, 2002.
Participant Accounts
Each participants account is credited with the participants 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 participants account. Forfeited balances of terminated participants nonvested accounts during 2001 were used to reduce future
Company contributions. Effective January 1, 2002, participants are immediately vested with respect to Matching Contributions and Core Contributions.
Payments 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 participants vested account balance in either a lump-sum payment in cash and/or shares of the Companys 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. Participants hired before April 1, 1996 may also elect to have an insurance annuity contract purchased
on the participants behalf.
Certain restrictions apply to withdrawals of amounts from the Plan while a
participant continues to be employed by the Company.
5
AMGEN RETIREMENT AND SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
1. Description of Plan (continued)
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 participants vested account balance or $50,000, less any outstanding loans. The loans
bear interest at average borrowing rates of certain major banks (ranging from 6.75% to 11.87%) and are generally payable in installments over periods ranging from one to five years. Principal and interest payments are allocated to the
participants account.
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
Fidelity Management Trust Company acts as the Plans trustee.
2. Summary of Significant Accounting Policies
Basis of
Accounting
The financial statements have been prepared on the accrual basis of accounting.
Reclassification
Certain amounts in the 2000 financial statements have been reclassified to conform to the 2001 presentation.
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.
6
AMGEN RETIREMENT AND SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
2. Summary of Significant Accounting Policies (continued)
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 Plans net assets are as follows:
|
|
December 31,
|
|
|
2001
|
|
2000
|
Amgen Inc. Stock Fund |
|
$ |
228,503,831 |
|
$ |
257,843,222 |
Fidelity Magellan Fund |
|
|
102,100,754 |
|
|
110,689,139 |
Fidelity Growth and Income Portfolio |
|
|
73,223,177 |
|
|
79,446,064 |
Fidelity Spartan U.S. Equity Index |
|
|
48,267,602 |
|
|
50,730,271 |
Fidelity Retirement Money Market Portfolio |
|
|
46,752,550 |
|
|
* |
Fidelity OTC Portfolio |
|
|
45,378,930 |
|
|
56,319,408 |
* Investment balance in 2000 was less than 5% of the Plans net assets.
7
AMGEN RETIREMENT AND SAVINGS PLAN
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
3. Investments (continued)
During 2001 and 2000, the Plans 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 |
|
$ |
(29,793,683 |
) |
|
$ |
16,208,146 |
|
Mutual funds |
|
|
(57,901,455 |
) |
|
|
(88,067,903 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(87,695,138 |
) |
|
$ |
(71,859,757 |
) |
|
|
|
|
|
|
|
|
|
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated November 21, 2001, stating that the Plan is
qualified, in form, under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification.
The Company believes the Plan is being operated in compliance with the applicable requirements of the Code 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 Plans tax qualified status.
5. Services Provided by the Company
The Company provides certain administrative and recordkeeping 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.
6. Subsequent Decline in Market Value (Unaudited)
On June 20, 2002,
the fair market value of Amgen common stock was $41.32, a decline of 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 $167,288,772.
8
Amgen Retirement and Savings Plan
EIN: 95-3540776
Plan: 35274
December 31, 2001
Identity of Issue |
|
Description of Investment |
|
Current Value |
|
|
|
|
|
Amgen Inc.* |
|
Common stock 4,048,615 shares |
|
$ |
228,503,831 |
Fidelity Magellan Fund* |
|
Mutual fund 979,666 shares |
|
|
102,100,754 |
Fidelity Growth and Income Portfolio* |
|
Mutual fund 1,958,886 shares |
|
|
73,223,177 |
Fidelity Spartan U.S. Equity Index* |
|
Mutual fund 1,187,687 shares |
|
|
48,267,602 |
Fidelity Retirement Money Market Portfolio* |
|
Money market portfolio |
|
|
46,752,550 |
Fidelity OTC Portfolio* |
|
Mutual fund 1,455,853 shares |
|
|
45,378,930 |
Fidelity Contrafund* |
|
Mutual fund 760,326 shares |
|
|
32,519,132 |
Fidelity Overseas Fund* |
|
Mutual fund 1,032,387 shares |
|
|
28,308,053 |
Fidelity Asset Manager: Growth* |
|
Mutual fund 1,506,895 shares |
|
|
21,608,881 |
Fidelity Asset Manager* |
|
Mutual fund 1,049,723 shares |
|
|
16,270,702 |
Fidelity U.S. Bond Index Portfolio* |
|
Mutual fund 1,228,414 shares |
|
|
13,266,876 |
Fidelity Short-Term Bond* |
|
Mutual fund 1,502,844 shares |
|
|
13,225,026 |
Neuberger Berman Genesis Trust |
|
Mutual fund 401,087 shares |
|
|
11,675,637 |
Fidelity Asset Manager: Income* |
|
Mutual fund 411,723 shares |
|
|
4,664,818 |
Fidelity Equity Income Fund* |
|
Mutual fund 54,766 shares |
|
|
2,670,922 |
Dreyfus Founders Discovery Fund |
|
Mutual fund 64,161 shares |
|
|
1,825,368 |
Invesco Growth Fund |
|
Mutual fund 413,726 shares |
|
|
1,075,687 |
Participant loans* |
|
Interest rates from 6.75% to 11.87% |
|
|
12,743,670 |
|
|
|
|
|
|
|
|
|
|
$ |
704,081,616 |
|
|
|
|
|
|
*Party-in-interest.
9
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.
Amgen
Retirement and Savings Plan
(Name of Plan)
Date: |
|
6/24/02 |
|
By: |
|
/s/ RICHARD D. NANULA
|
|
|
|
|
|
|
Richard D. Nanula Executive
Vice President, Finance, Strategy and Communications, and Chief Financial Officer Amgen Inc. |
AMGEN RETIREMENT AND SAVINGS PLAN
INDEX TO EXHIBIT
Consent of Ernst & Young LLP, Independent Auditors |
|
Exhibit 23 |