beatandraise : SEC Filings Research with AI

beatandraise.com

beta

AMGEN INC

Statements

Exhibits

d10q.htm dex35.htm dex36.htm dex1050.htm dex31.htm dex32.htm amgn-20090630.xml

Notes Support

about terms

beatandraise.com

beta

AMGEN INC

Statements

Exhibits

d10q.htm dex35.htm dex36.htm dex1050.htm dex31.htm dex32.htm amgn-20090630.xml

Notes Support

about terms

1015476612 49808027303

3392000000

38840000000

8997000000

26720000000

0.0001

2750000000

1015000000

63000000

635000000

2182000000

2913000000

17696000000

2968000000

4383000000

2780000000

11339000000

2061000000

38840000000

4548000000

6088000000

1000000000

1488000000

1225000000

2461000000

5800000000

-5423000000

21360000000

2024000000

36427000000

7778000000

26441000000

0.0001

2750000000

1047000000

117000000

504000000

2073000000

3382000000

15221000000

1774000000

4257000000

2988000000

11339000000

2075000000

36427000000

4886000000

4095000000

1000000000

1521000000

1000000000

2304000000

5879000000

-5673000000

20885000000

0.84

2585000000

1130000000

224000000

137000000

906000000

88000000

1179000000

284000000

72000000

809000000

3764000000

3692000000

904000000

1081000000

1078000000

515000000 73000000

1.25

2256000000

1357000000

88000000

150000000

1269000000

50000000

1457000000

49000000

79000000

693000000

3713000000

3634000000

910000000

1017000000

1013000000

531000000 73000000

1368000000

1.85

4783000000

531000000

2510000000

504000000

360000000

200000000

-23000000

69000000

105000000

-46000000

286000000

-1540000000

-293000000

3201000000

2006000000

202000000

2594000000

36000000

294000000

148000000

-61000000

1549000000

3422000000

48000000

335000000

-16000000

992000000

370000000

3081000000

1000000000

1503000000

7377000000

7229000000

1778000000

133000000

1086000000

1083000000

1061000000 33000000 147000000 276000000 10-Q false N.A. 2009-06-30 AMGEN INC 0000318154 AMGN --12-31 Yes No Yes Large Accelerated Filer

<div> 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 June 30, 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 June 30, 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):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="88%"></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> June 30, 2009 </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Amortized   cost</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Gross   unrealized   gains</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Gross   unrealized   losses</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Estimated   fair value</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Type of security: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> U.S. Treasury securities </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,276  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(12)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,273  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Obligations of U.S. government agencies and FDIC guaranteed bank debt </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,060  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">73  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,127  </td> </tr> <tr> <td valign="top"> Corporate debt securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,920  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(12)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,950  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Mortgage and asset backed securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">331  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-       </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">334  </td> </tr> <tr> <td valign="top"> Other short-term interest bearing securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,084  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-       </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,084  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total debt securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,671  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">127  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(30)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,768  </td> </tr> <tr> <td valign="top"> Equity securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">67  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">71  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">11,738  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">139  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(38)  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,839  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table>   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="88%"></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> December 31, 2008 </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Amortized   cost</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Gross   unrealized   gains</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Gross   unrealized   losses</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Estimated   fair value</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Type of security: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> U.S. Treasury securities </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,896   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">58   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(2)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,952   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Obligations of U.S. government agencies and FDIC guaranteed bank debt </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,396   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">100   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,493   </td> </tr> <tr> <td valign="top"> Corporate debt securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,432   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(72)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,370   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Mortgage and asset backed securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">508   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">504   </td> </tr> <tr> <td valign="top"> Other short-term interest bearing securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,126   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-       </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-       </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,126   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total debt securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,358   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">170   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(83)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,445   </td> </tr> <tr> <td valign="top"> Equity securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-       </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">57   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,423   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">170   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(91)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,502   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table>   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="92%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> Contractual maturity </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">      June 30,       2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    December 31,     2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Maturing in one year or less </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">3,759   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">3,179   </td> </tr> <tr> <td valign="top"> Maturing after one year through three years </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,015   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,724   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Maturing after three years </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,994   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,542   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Total debt securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,768   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,445   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Equity securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">71   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">57   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">11,839   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,502   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> Classification in the Condensed Consolidated Balance Sheets </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">June 30, 2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    December 31,     2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cash and cash equivalents </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,968   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,774   </td> </tr> <tr> <td valign="top"> Marketable securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8,997   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,778   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other assets - noncurrent </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">71   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">30   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12,036   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,582   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Less cash </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(197)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(80)  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">11,839   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,502   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> The primary objectives for our marketable security investment portfolio are liquidity and safety of principal. Investments are made with the objective of achieving the highest rate of return consistent with these two objectives. Our investment policy limits investments to certain types of debt and money market instruments issued by institutions primarily with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. We review periodically our available-for-sale securities for other than temporary declines in fair value below their cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As of June 30, 2009 and December 31, 2008, the Company believes that the cost basis for our available-for-sale securities were recoverable in all material respects.   </div>

1194000000

2.24

2.23

<div> 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 December 31, 2008 and Note 11, “Contingencies” to our Condensed Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 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 May 28, 2009 status conference where mediation with respect to all non-settling MDL Proceeding cases was discussed. Final approval hearing of the Track Two settlement is set for October 21, 2009. Robert J. Swanston v. TAP Pharmaceutical Products, Inc., et al. On June 8, 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 June 29, 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 July 2, 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 July 7, 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 June 4, 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 June 22, 2009 the Roche respondents filed a motion for a stay and Amgen and the Office of Unfair Import Investigations (“OUII”) opposed. On July 10, 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 June 1, 2009, the Federal Circuit affirmed the U.S. District Court for the District of Delaware’s (the “Delaware District Court”) ruling on claim construction and non-infringement in favor of Amgen. Human Genome Sciences (“HGS”) Litigations On May 29, 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 on Priority entered on March 31, 2009 by the Board of Patent Appeals and Interferences in Interference No. 105,380. On July 31, 2009, and as discussed with the Delaware District Court during a scheduling teleconference on January 23, 2009 in related Civil Action 07-526, the parties filed a joint Stipulated Order requesting a stay of the case until further order of the Delaware District Court. Sensipar® Abbreviated New Drug Application (“ANDA”) Litigation After a hearing on the motions on May 14, 2009, the Delaware District Court issued an order on May 15, 2009 denying Teva’s motion to add a counterclaim of infringement of U.S. Patent No. 7,449,603 and granting defendants’ motions to add affirmative defenses and declaratory judgment counterclaims of unenforceability for inequitable conduct and to clarify that their previously pled invalidity defenses include invalidity for statutory and non-statutory double patenting. On May 15, 2009, the Delaware District Court entered a third scheduling order setting a claims construction hearing for January 25 and 26, 2010 and indicating that the case will be placed in the trial pool on September 1, 2010.   Teva U.S. Patent No. 7,449,603 (‘603) Litigation On May 20, 2009, Teva Pharmaceutical Industries Ltd. (“Teva Ltd.”) and Teva Pharmaceuticals USA, Inc. (“Teva USA”) filed a lawsuit against Amgen in the U.S. District Court for the Eastern District of Pennsylvania alleging infringement of U.S. Patent No. 7,449,603 (the ‘603 Patent). On July 13, 2009, Amgen filed a motion to dismiss the claims of plaintiff Teva USA for lack of subject matter jurisdiction. On July 22, 2009, Teva Ltd. filed an amended complaint for patent infringement in its own name. On July 29, 2009, Teva Ltd. filed an opposition to Amgen’s motion to dismiss the claims of Teva USA for lack of subject matter jurisdiction. Federal Securities Litigation — In re Amgen Inc. Securities Litigation A class certification hearing before the U.S. District Court for the Central District of California (the “California Central District Court”), was held on July 17, 2009. No ruling has been issued by the California Central District Court. State Derivative Litigation — Birch v. Sharer, et al. Amgen and the individual defendants filed motions to dismiss on June 23, 2009 and oral argument is currently set for September 4, 2009 before a judge in the Complex Department of the Los Angeles County Superior Court. ERISA Litigation On July 14, 2009, the U.S. Court of Appeals for the 9th Circuit (the “9th Circuit”) reversed the California Central District Court’s decision and remanded the case back to the district court. In the meantime, a third ERISA class action was filed by Don Hanks on June 2, 2009 in the Central District of California alleging the same ERISA violations as in the Harris and Ramos lawsuits. It is anticipated that a motion to consolidate the cases will be filed with the California Central District Court. If the cases are consolidated, an amended complaint will be filed and Amgen will have 30 days to file its responsive pleading. Third-Party Payers Litigation On June 17, 2009, the California Central District Court granted Amgen’s motion and dismissed the entire action with prejudice. Plaintiffs filed a notice of appeal on July 17, 2009 with the 9th Circuit. Qui Tam Actions The Massachusetts District Court held a status hearing on May 18, 2009 and ordered that the government make a decision whether or not to intervene in the Massachusetts Qui Tam Action by September 1, 2009. Other On May 12, 2009, Amgen was served with a third subpoena from the U.S. Attorney’s Office for the Western District of Washington related to Johnson and Johnson clinical trials and correspondence with payers. Amgen intends to cooperate fully with the government’s requests. On July 29, 2009, Amgen was served with a second subpoena from the U.S. Attorney’s Office for the Eastern District of New York related to dosing. Amgen intends to cooperate fully with the government’s requests. In the ordinary course of business, we are involved in various legal proceedings and other matters, including those discussed in this Note. While it is not possible to accurately predict or determine the eventual outcome of these items, one or more of these items currently pending could have a material adverse effect on our condensed consolidated results of operations, financial position or cash flows. </div>

<div> 9. Financing arrangements The following table reflects the carrying value of our long-term borrowings under our various financing arrangements as of June 30, 2009 and December 31, 2008 (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="92%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">      June 30,       2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  December 31,   2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 0.125% convertible notes due 2011 (2011 Convertible Notes) </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,273  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,206  </td> </tr> <tr> <td valign="top"> 0.375% convertible notes due 2013 (2013 Convertible Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,028  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,970  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 5.85% notes due 2017 (2017 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,099  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,099  </td> </tr> <tr> <td valign="top"> 4.85% notes due 2014 (2014 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 4.00% notes due 2009 (2009 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> </tr> <tr> <td valign="top"> 5.70% notes due 2019 (2019 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">998  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 6.40% notes due 2039 (2039 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">995  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> </tr> <tr> <td valign="top"> 6.375% notes due 2037 (2037 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">899  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">899  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 6.15% notes due 2018 (2018 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">499  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">499  </td> </tr> <tr> <td valign="top"> 6.90% notes due 2038 (2038 Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">498  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">498  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Zero coupon modified convertible notes due in 2032 (2032 Modified Convertible Notes) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">82  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">81  </td> </tr> <tr> <td valign="top"> Other </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">100  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">100  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total borrowings </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,471  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,352  </td> </tr> <tr> <td valign="top"> Less current portion </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total non-current debt </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">10,471  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">8,352  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> 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 January 1, 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 interest expense on these borrowings at effective rates approximating what we would have incurred had we issued nonconvertible debt with otherwise similar terms. The 2011 Convertible Notes and the 2013 Convertible Notes were issued at par and pay interest at a rate of 0.125% and 0.375%, respectively. The discounts associated with these notes resulting from the adoption of FSP APB 14-1 are being amortized over periods that end on the scheduled maturity dates of these notes and result in effective interest rates of approximately 6.24% for the 2011 Convertible Notes and approximately 6.35% for the 2013 Convertible Notes. For the three and six months ended June 30, 2009, interest expense for the 2011 Convertible Notes was approximately $1 million and $2 million, respectively, based on the contractual coupon rates. For the three and six months ended June 30, 2008, interest expense for the 2011 Convertible Notes was approximately $1 million and $2 million, respectively, based on the contractual coupon rates. For the three and six months ended June 30, 2009, interest expense for the 2013 Convertible Notes was approximately $2 million and $5 million, respectively, based on the contractual coupon rates. For the three and six months ended June 30, 2008, interest expense for the 2013 Convertible Notes was approximately $2 million and $5 million, respectively, based on the contractual coupon rates. For the three and six months ended June 30, 2009, amortization of the discount for the 2011 Convertible Notes was approximately $34 million and $67 million, respectively. For the three and six months ended June 30, 2008, amortization of the discount for the 2011 Convertible Notes was approximately $32 million and $63 million, respectively. For the three and six months ended June 30, 2009, amortization of the discount for the 2013 Convertible Notes was approximately $29 million and $58 million, respectively. For the three and six months ended June 30, 2008, amortization of the discount for the 2013 Convertible Notes was approximately $27 million and $54 million, respectively. The 2011 Convertible Notes and the 2013 Convertible Notes may, subject to certain conditions, be converted based on a conversion rate of 12.5247 and 12.5814 shares, respectively, per $1,000 principal amount of notes (which represents a conversion price of approximately $79.84 and $79.48 per share, respectively). Upon conversion, a holder would receive the conversion value, as defined, in: (i) cash equal to the lesser of the principal amount of the note or the conversion value and (ii) shares of our common stock, cash or a combination of common stock and cash, at our option, to the extent the conversion value exceeds the principal amount of the note. As of June 30, 2009, these notes were not convertible and the principal values exceeded the conversion values. The principal balances, unamortized discounts and net carrying amounts of the liability components and the equity components for our 2011 Convertible Notes and 2013 Convertible Notes as of June 30, 2009 and December 31, 2008 are as follows (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="48%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="8">Liability Component</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">Equity Component</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">    Principal     Balance</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">  Unamortized   Discount</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">  Net Carrying   Amount</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">  Net Carrying   Amount</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Balance as of June 30, 2009 </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> 2011 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,500  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">227  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,273  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">643  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2013 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,500  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">472  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,028  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">829  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr> <td valign="top"> Balance as of December 31, 2008 </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2011 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,500  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">294  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,206  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">643  </td> </tr> <tr> <td valign="top"> 2013 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,500  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">530  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,970  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">829  </td> </tr> </tbody> </table> The 2032 Modified Convertible Notes were issued in 2005 in exchange for zero-coupon, 30-year convertible notes that we issued in 2002. Like the notes for which they were exchanged, no interest is currently payable on the 2032 Modified Convertible Notes. These notes were issued at a discount from their principal amount (prior to the adoption of FSP APB 14-1). The reduced carrying value resulting from issuing these notes at a discount is being accreted back to the principal amount based on a contractual interest rate of 1.125% over the life of the notes. In March 2007, substantially all of the holders of the 2032 Modified Convertible Notes exercised their option to put these convertible notes to us. The additional discount on the 2032 Modified Convertible Notes recognized pursuant to the retrospective application of FSP APB 14-1 (in excess of the discount recognized under the contractual terms of these securities) was amortized as non-cash interest expense prior to the holders putting these convertible notes to us. We continue to recognize interest expense for the amortization of the discount based on the contractual rate for the 2032 Modified Convertible Notes that remain outstanding. Such amounts were not material for the three and six months ended June 30, 2009 and 2008. Holders of the remaining outstanding 2032 Modified Convertible Notes may, subject to certain conditions, convert each of their notes based on a conversion rate of 8.8601 shares of common stock. The conversion price per share of the convertible notes as of any day will equal the accreted value on that day, divided by the conversion rate, or $87.52, as of June 30, 2009. If converted, the 2032 Modified Convertible Notes will be settled in cash for an amount equal to the lesser of the accreted value of the 2032 Modified Convertible Notes at the conversion date or the conversion value, as defined, and shares of common stock, if any, to the extent the conversion value exceeds the amount paid in cash. As of June 30, 2009, these notes were not convertible and the accreted value exceeded the amount that would have been received upon conversion. As of June 30, 2009 and December 31, 2008, the equity component for the 2032 Modified Convertible Notes was approximately $29 million. Other facilities As of June 30, 2009, we have a $2.3 billion syndicated unsecured revolving credit facility which matures in November 2012 and is available for general corporate purposes, or as a liquidity backstop to our commercial paper program. In late 2008, a participating financial institution in the credit facility who had provided $178 million of such commitment declared bankruptcy. Subsequently, this financial institution, which is a subsidiary of Lehman Brothers Holdings, Inc. (“Lehman”), was removed from the credit facility and the aggregate commitment was reduced to its current level of $2.3 billion. </div>

4243000000

520000000

<div> 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 June 30, 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 Sheets and reclassified to earnings in the same periods during which the hedged transactions affect earnings.    Information regarding our cash flow hedge contracts for the three and six months ended June 30, 2009 is presented in the table below (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="31%"></td> <td valign="bottom" width="31%"></td> <td></td> <td></td> <td valign="bottom" width="31%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Three months ended June 30, 2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Six months ended June 30, 2009</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle"> Derivatives in SFAS 133 cash flow hedging relationships </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Amount of gain/(loss) recognized in   Other Comprehensive Income (“OCI”)   (effective portion)</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Amount of gain/(loss) recognized in OCI   (effective portion)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest rate contracts </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-       </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(11)  </td> </tr> <tr> <td valign="top"> Foreign exchange contracts </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(100)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(77)  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(100)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(88)  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table>   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="3%"></td> <td valign="bottom" width="16%"></td> <td width="46%"></td> <td valign="bottom" width="16%"></td> <td></td> <td></td> <td valign="bottom" width="16%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Three months ended June 30, 2009</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Six months ended June 30, 2009</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle"> Derivatives in SFAS 133 cash flow hedging relationships </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle">  Location of gain/(loss) reclassified  from Accumulated OCI into income (effective portion) </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">Amount of gain/(loss) reclassified from Accumulated OCI into  income (effective portion) </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">Amount of gain/(loss) reclassified from Accumulated OCI into  income (effective portion) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest rate contracts </td> <td valign="bottom"> </td> <td valign="bottom"> Interest expense, net </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> </tr> <tr> <td valign="top"> Foreign exchange contracts </td> <td valign="bottom"> </td> <td valign="bottom"> Product sales </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">10  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">29  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> No portions of our cash flow hedge contracts are excluded from the assessment of hedge effectiveness, and ineffective portions of these hedging instruments resulted in less than $1 million of expense recorded in “Interest and other income, net” and “Interest expense, net” in the Condensed Consolidated Statements of Income for both the three and six months ended June 30, 2009. As of June 30, 2009, the amounts expected to be reclassified into earnings over the next 12 months are approximately $1 million of gains on foreign currency forward and option contracts and $1 million of losses on forward interest rate contracts. We have interest rate swap agreements, which qualify and are designated as fair value hedges, to achieve a desired mix of fixed and floating interest rate debt. The terms of the interest rate swap agreements correspond to the related hedged debt instruments and effectively convert a fixed interest rate coupon to a LIBOR-based floating rate coupon over the lives of the respective notes. As of June 30, 2009, we had interest rate swap agreements with an aggregate notional amount of $2.5 billion on our notes due in 2009, 2014 and 2018. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. For the three and six months ended June 30, 2009, we included the gain on the hedged debt of $41 million and $103 million, respectively, in the same line item, “Interest expense, net” in the Condensed Consolidated Statements of Income, as the offsetting loss of $41 million and $103 million, respectively, on the related interest rate swaps. We enter into foreign currency forward contracts to reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies which are not designated as hedging transactions under SFAS 133. These exposures are hedged on a month-to-month basis. As of June 30, 2009, the total notional amount of these foreign currency forward contracts was $464 million.    The following table reflects the effect of these derivative instruments on the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2009 (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="35%"></td> <td valign="bottom" width="9%"></td> <td width="34%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Three months ended June 30, 2009</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Six months ended June 30, 2009</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle"> Derivatives not designated as hedging instruments under SFAS 133 </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle">   Location of gain/(loss)   recognized in income </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">Amount of gain/(loss) recognized in income</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="middle" colspan="2">Amount of gain/(loss) recognized in income</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Foreign exchange contracts </td> <td valign="bottom"> </td> <td valign="bottom"> Interest and other income, net </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(10)  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">4  </td> </tr> </tbody> </table> The following table reflects the fair values of both derivatives designated as hedging instruments and not designated as hedging instruments under SFAS 133 included in the Condensed Consolidated Balance Sheet as of June 30, 2009 (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="39%"></td> <td valign="bottom" width="5%"></td> <td width="21%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td width="16%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="4"> Derivative assets </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="4"> Derivative liabilities </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle">     Balance Sheet location     </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Fair value  </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle">     Balance Sheet location     </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Fair value  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivatives designated as hedging instruments under SFAS 133: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="bottom"> Interest rate contracts </td> <td valign="bottom">  </td> <td valign="bottom"> Other current assets/ Other non-current assets </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">103  </td> <td valign="bottom">  </td> <td valign="bottom"> Accrued liabilities/ Other non-current liabilities </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="bottom"> Foreign exchange contracts </td> <td valign="bottom">  </td> <td valign="bottom"> Other current assets/ Other non-current assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">88  </td> <td valign="bottom">  </td> <td valign="bottom"> Accrued liabilities/ Other non-current liabilities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">95  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Total derivatives designated as hedging instruments under SFAS 133 </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">191  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">95  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivatives not designated as hedging instruments under SFAS 133: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Foreign exchange contracts </td> <td valign="bottom">  </td> <td valign="bottom"> Other current assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom"> Accrued liabilities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total derivatives not designated as hedging instruments under SFAS 133 </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Total derivatives </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">191  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">95  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> Our foreign exchange contracts that were in a liability position as of June 30, 2009 contain certain credit risk related contingent provisions that are triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. </div>

<div> 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 Company’s 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:   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="1%"></td> <td valign="bottom" width="1%"></td> <td></td> <td valign="bottom" width="1%"></td> <td width="97%"></td> </tr> <tr> <td valign="top" nowrap="nowrap"> Level 1 </td> <td valign="bottom"> </td> <td valign="top">—</td> <td valign="bottom">  </td> <td valign="bottom"> Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access </td> </tr> <tr> <td height="16"></td> <td colspan="2" height="16"></td> <td colspan="2" height="16"></td> </tr> <tr> <td valign="top" nowrap="nowrap"> Level 2 </td> <td valign="bottom"> </td> <td valign="top">—</td> <td valign="bottom">  </td> <td valign="bottom"> 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 </td> </tr> <tr> <td height="16"></td> <td colspan="2" height="16"></td> <td colspan="2" height="16"></td> </tr> <tr> <td valign="top" nowrap="nowrap"> Level 3 </td> <td valign="bottom"> </td> <td valign="bottom">—</td> <td valign="bottom">  </td> <td valign="bottom"> Valuations based on inputs that are unobservable and significant to the overall fair value measurement. </td> </tr> </tbody> </table> 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 Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2009 and December 31, 2008 (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="41%"></td> <td valign="bottom" width="11%"></td> <td></td> <td></td> <td valign="bottom" width="11%"></td> <td></td> <td></td> <td valign="bottom" width="11%"></td> <td></td> <td></td> <td valign="bottom" width="11%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="11">Fair value measurement at June 30, 2009 using:</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Quoted prices in     active markets for     identical assets (Level 1)</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Significant other     observable inputs     (Level 2)</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Significant     unobservable     inputs (Level 3)</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Total        </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Assets: </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Available-for-sale securities: </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom" colspan="7"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> U.S. Treasury securities </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,273  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,273  </td> </tr> <tr> <td valign="top"> Obligations of U.S. government agencies and FDIC guaranteed bank debt </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,127  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,127  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Corporate debt securities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,950  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,950  </td> </tr> <tr> <td valign="top"> Mortgage and asset backed securities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">334  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">334  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top" nowrap="nowrap"> Other short-term interest bearing securities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,614  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">470  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,084  </td> </tr> <tr> <td valign="top"> Equity securities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">71  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">71  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,958  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,881  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,839  </td> </tr> <tr> <td valign="top"> Derivatives </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">191  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">191  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">3,958  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">8,072  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">12,030  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td valign="top"> Liabilities: </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivatives </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">95  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">95  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">95  </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">95  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table>    <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="88%"></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> <td valign="bottom" width="1%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="11">Fair value measurement at December 31, 2008 using:</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Quoted prices in   active markets for   identical assets (Level 1)</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Significant other   observable inputs   (Level 2)</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Significant     unobservable     inputs (Level 3)</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Total        </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Assets: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Available-for-sale securities </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">3,575  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">5,927  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,502  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivatives </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">  415  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">  415  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">3,575  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">6,342  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,917  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Liabilities: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Derivatives </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">66  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">66  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">66  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">66  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> There were no material remeasurements to fair value during the six months ended June 30, 2009 and 2008 of assets and liabilities that are not measured at fair value on a recurring basis. Following is a summary of the fair value of other financial instruments: Short-term assets and liabilities The fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying values due to the short-term nature of these financial instruments. Notes The following table presents the carrying value and fair value information for our convertible notes, modified convertible notes and other long-term notes. The fair values shown are based on significant other observable inputs (Level 2) (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="92%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="5">June 30, 2009</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Carrying value  </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Fair value        </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2011 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,273  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,427  </td> </tr> <tr> <td valign="top"> 2013 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,028  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,234  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2017 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,099  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,200  </td> </tr> <tr> <td valign="top"> 2014 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,055  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2009 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,013  </td> </tr> <tr> <td valign="top"> 2019 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">998  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,091  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2039 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">995  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,080  </td> </tr> <tr> <td valign="top"> 2037 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">899  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">965  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2018 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">499  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">560  </td> </tr> <tr> <td valign="top"> 2038 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">498  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">573  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2032 Modified Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">82  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">60  </td> </tr> <tr> <td valign="top"> Other </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">100  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">112  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">11,471  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">12,370  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table>    <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="92%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="5">December 31, 2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Carrying value  </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Fair value        </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2011 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,206  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,300  </td> </tr> <tr> <td valign="top"> 2013 Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,970  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,080  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2017 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,099  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,140  </td> </tr> <tr> <td valign="top"> 2014 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">994  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2009 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,000  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,017  </td> </tr> <tr> <td valign="top"> 2037 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">899  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">948  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2018 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">499  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">536  </td> </tr> <tr> <td valign="top"> 2038 Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">498  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">567  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2032 Modified Convertible Notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">81  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">58  </td> </tr> <tr> <td valign="top"> Other </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">100  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">111  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,352  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9,751  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> </div>

2589000000

<div> 3. Income taxes The effective tax rates for the three and six months ended June 30, 2009 and June 30, 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 June 30, 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 December 31, 2004 or to California state income tax examinations for years ending on or before December 31, 2003. The IRS is currently examining our U.S. income tax returns for the years ended December 31, 2005 and 2006. As of June 30, 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 June 30, 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 June 30, 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 June 30, 2009, if recognized, would affect our effective tax rate. As of June 30, 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. </div>

301000000

48000000

108000000

-79000000

-50000000

-355000000

48000000

297000000

<div>    8. Inventories Inventories consisted of the following (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="92%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">      June 30,       2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    December 31,     2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Raw materials </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">121  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">112  </td> </tr> <tr> <td valign="top"> Work in process </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,371  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,519  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Finished goods </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">569  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">444  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,061  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,075  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> </div>

98000000

-1442000000

2538000000

2288000000

<div> 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 January 1, 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 June 30, 2009 and 2008 and on the Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008 (in millions, except per share information):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="58%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="8">        Three months ended June 30, 2009        </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Excluding the   effect of FSP APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Effect of FSP   APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    Including the   effect of FSP APB 14-1</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Operating income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,457  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,457  </td> </tr> <tr> <td valign="top"> Interest expense, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">88  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">150  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest and other income, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">50  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">50  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Income before income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,419  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(62)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,357  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Provision for income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">111  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(23)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">88  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Net income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,308  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(39)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,269  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Earnings per share: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Basic </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.29  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.04)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.25  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Diluted </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.29  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.04)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.25  </td> </tr> <tr> <td height="16"></td> <td colspan="9" height="16"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="8">Three months ended June 30, 2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">As originally reported</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Effect of FSP APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">“Revised”</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Operating income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,179  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,179  </td> </tr> <tr> <td valign="top"> Interest expense, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">79  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">58   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">137  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest and other income, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">88  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">88  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Income before income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,188  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(58)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,130  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Provision for income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">247  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(23)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">224  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Net income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">941  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(35)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">906  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Earnings per share: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Basic </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">0.87  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.03)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">0.84  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Diluted </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">0.87  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.03)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">0.84  </td> </tr> <tr> <td height="16"></td> <td colspan="9" height="16"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="8">Six months ended June 30, 2009</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Excluding the effect of FSP APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Effect of FSP APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Including the effect of FSP APB 14-1</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Operating income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,778  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,778  </td> </tr> <tr> <td valign="top"> Interest expense, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">174  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">123   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">297  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest and other income, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">108  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">108  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Income before income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,712  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(123)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,589  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Provision for income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">347  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(46)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">301  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Net income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,365  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(77)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,288  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Earnings per share: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Basic </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2.31  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.07)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2.24  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Diluted </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2.30  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.07)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2.23  </td> </tr> </tbody> </table>   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="85%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="8">Six months ended June 30, 2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  As originally   reported</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Effect of FSP   APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  “Revised”  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Operating income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,594  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,594  </td> </tr> <tr> <td valign="top"> Interest expense, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">171  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">115   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">286  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest and other income, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">202  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">202  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Income before income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,625  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(115)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,510  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Provision for income taxes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">548  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(44)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">504  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Net income </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,077  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(71)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,006  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Earnings per share: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Basic </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.92  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.07)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.85  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Diluted </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.91  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(0.06)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.85  </td> </tr> <tr> <td height="16"></td> <td colspan="9" height="16"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="8">June 30, 2009</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Excluding the   effect of FSP APB   14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Effect of FSP   APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Including the   effect of FSP APB   14-1</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Non-current assets: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Other assets </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,239   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(14)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,225   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Non-current liabilities: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Convertible notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,082   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(699)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,383   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other non-current liabilities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,198   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">263   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,461   </td> </tr> <tr> <td valign="top"> Stockholders’ equity: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Common stock and additional paid-in capital </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">25,806   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">914   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">26,720   </td> </tr> <tr> <td valign="top"> Accumulated deficit </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,931)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(492)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5,423)  </td> </tr> <tr> <td height="16"></td> <td colspan="9" height="16"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="8">December 31, 2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">As originally reported</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">  Effect of FSP   APB 14-1</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">“Revised”</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Non-current assets: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Other assets </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,016   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">(16)  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,000   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Non-current liabilities: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Convertible notes </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,081   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(824)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,257   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other non-current liabilities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,995   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">309   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,304   </td> </tr> <tr> <td valign="top"> Stockholders’ equity: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Common stock and additional paid-in capital </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">25,527   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">914   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">26,441   </td> </tr> <tr> <td valign="top"> Accumulated deficit </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5,258)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(415)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5,673)  </td> </tr> </tbody> </table> The effect of FSP APB 14-1 on other non-current liabilities reflects the impact of deferred taxes. In addition, the effect of FSP APB 14-1 on common stock and additional paid-in capital reflects, principally, the impact of the equity component of our convertible debt partially offset by deferred taxes. As a result of the accounting change, our accumulated deficit as of January 1, 2008, increased from $7.2 billion as originally reported, to $7.4 billion after applying FSP APB 14-1. There was no impact resulting from this accounting change on our cash flows from operating activities, investing activities or financing activities as reflected in the Condensed Consolidated Statements of Cash Flows.      </div>

108000000

2778000000

111000000

54000000

149000000

32000000

1997000000

7483000000

256000000

18000000

1980000000

964000000

5365000000

1326000000

<div> 6. Restructuring On August 15, 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 R&D capital projects and (iii) abandoning leases primarily for certain R&D 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 March 31, 2009, we have completed all of the actions and incurred all related costs initially included in our restructuring plan. As of June 30, 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 June 30, 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 June 30, 2009 and 2008 related to the above-noted actions by type of activity (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="55%"></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> <td valign="bottom" width="8%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> Three months ended June 30, 2009 </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    Separation     costs</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">Asset     impairments    </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Other        </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Total        </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost of sales (excludes amortization of certain acquired intangible assets) </td> <td valign="bottom"> </td> <td valign="bottom">    $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> </tr> <tr> <td valign="top"> R&D </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3)  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> SG&A </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2)  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3   </td> </tr> <tr> <td valign="top"> Other charges </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">24   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">6   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">6   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">36   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> Three months ended June 30, 2008 </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> R&D </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> </tr> <tr> <td valign="top"> Other charges </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">12   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">9   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">22   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> Six months ended June 30, 2009 </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost of sales (excludes amortization of certain acquired intangible assets) </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> </tr> <tr> <td valign="top"> R&D </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3)  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> SG&A </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2)  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">17   </td> </tr> <tr> <td valign="top"> Other charges </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">34   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">34   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">29   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">6   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">20   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">55   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> Six months ended June 30, 2008 </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost of sales (excludes amortization of certain acquired intangible assets) </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1   </td> </tr> <tr> <td valign="top"> R&D </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3   </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> SG&A </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-         </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1)  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1)  </td> </tr> <tr> <td valign="top"> Other charges </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">14   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">13   </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">31   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">7   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">15   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">12   </td> <td valign="bottom"> </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">34   </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table>   The following table summarizes the charges and spending relating to the restructuring plan (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="63%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    Separation     costs</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Other        </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">        Total        </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Restructuring reserves as of January 1, 2009 </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">4   </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">162   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">166  </td> </tr> <tr> <td valign="top"> Expense </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">20   </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">49  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Payments </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(43)  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(49) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Restructuring reserves as of June 30, 2009 </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">27   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">139   </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">166  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </tbody> </table> The Company records restructuring activities in accordance with SFAS 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” and SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.” </div>

7021000000

6872000000

1708000000

123000000

<div> 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 June 30, 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 December 31, 2008. Change in method of accounting for convertible debt instruments Effective January 1, 2009, we adopted Financial Accounting Standards Board’s (“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 FASB’s Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”), effective January 1, 2008, for financial assets and liabilities and effective January 1, 2009, with respect to the fair value measurement requirements for non-financial assets and liabilities that are not remeasured on a recurring basis. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The adoption of SFAS 157 did not have a material impact on our condensed consolidated results of operations, financial position or cash flows. During the three months ended June 30, 2009, we adopted the provisions of the FASB’s FSP SFAS No. 115-2 and SFAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP SFAS 115-2 and SFAS 124-2”). FSP SFAS 115-2 and SFAS 124-2 modifies the guidance to determine whether the impairment of a debt security is other-than-temporary. This new standard also amends the presentation and disclosure requirements of other-than-temporarily impaired debt and equity securities in the financial statements. The adoption of FSP SFAS 115-2 and SFAS 124-2 did not have a material impact on our condensed consolidated results of operations, financial position or cash flows.   During the three months ended June 30, 2009, we adopted the provisions of the FASB’s FSP SFAS No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” and FASB’s FSP SFAS No. 107-1 and APB 28-1, “Interim Disclosures About Fair Value of Financial Instruments.” The adoption of these FSP’s resulted in additional interim disclosures and did not have a material impact on our condensed consolidated results of operations, financial position or cash flows. Derivative instruments Effective January 1, 2009, we adopted the provisions of the FASB’s SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“SFAS 161”) for our derivative instruments. SFAS 161 requires that the objectives for using derivative instruments be disclosed to better convey the purpose of derivative use in terms of the risks that we are intending to manage. This new standard also requires disclosure of how derivatives and related hedged items affect our financial statements. The adoption of SFAS 161 did not have a material impact on our condensed consolidated results of operations, financial position or cash flows. See Note 12, “Derivative instruments.” Inventories Inventories are stated at the lower of cost or market. Cost, which includes amounts related to materials, labor and overhead, is determined in a manner which approximates the first-in, first-out (“FIFO”) method. Property, plant and equipment, net Property, plant and equipment are recorded at historical cost, net of accumulated depreciation of $4.4 billion and $4.1 billion as of June 30, 2009 and December 31, 2008, respectively. Goodwill Goodwill principally relates to the acquisition of Immunex Corporation (“Immunex”). We perform an impairment test annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. Product sales Product sales primarily consist of sales of Aranesp® (darbepoetin alfa), EPOGEN® (Epoetin alfa), Neulasta® (pegfilgrastim), NEUPOGEN® (Filgrastim) and Enbrel® (etanercept). Sales of our products are recognized when shipped and title and risk of loss have passed. Product sales are recorded net of accruals for estimated rebates, wholesaler chargebacks, discounts and other incentives (collectively “sales incentives”) and returns. Taxes assessed by government authorities on the sale of the Company’s products, primarily in Europe, are excluded from revenues. We have the exclusive right to sell Epoetin alfa for dialysis, certain diagnostics and all non-human, non-research uses in the United States. We sell Epoetin alfa under the brand name EPOGEN®. We granted to Ortho Pharmaceutical Corporation (which has assigned its rights under the product license agreement to Ortho Biotech Products, L.P. (“Ortho Biotech”)), a subsidiary of Johnson & Johnson (“J&J”), a license relating to Epoetin alfa for sales in the United States for all human uses except dialysis and diagnostics. This license agreement, which is perpetual, may be terminated for various reasons, including upon mutual agreement of the parties, or default. The parties are required to compensate each other for Epoetin alfa sales that either party makes into the other party’s exclusive market, sometimes referred to as “spillover.” Accordingly, we do not recognize product sales we make into the exclusive market of J&J and do recognize the product sales made by J&J into our exclusive market. Sales in our exclusive market are derived from our sales to our customers, as adjusted for spillover. We are employing an arbitrated audit methodology to measure each party’s spillover based on estimates of and subsequent adjustments thereto of third-party data on shipments to end users and their usage.   Research and development costs Research and development (“R&D”) costs are expensed as incurred and primarily include salaries, benefits and other staff-related costs; facilities and overhead costs; clinical trial and related clinical manufacturing costs; contract services and other outside costs; information systems’ costs and amortization of acquired technology used in R&D with alternative future uses. R&D expenses also include costs incurred under R&D arrangements with our corporate partners, such as activities performed on behalf of Kirin-Amgen Inc. (“KA”), and costs and cost recoveries associated with collaborative R&D and in-licensing arrangements, including upfront fees and milestones paid to collaboration partners in connection with technologies that have no alternative future use. Net payment or reimbursement of R&D costs for R&D collaborations is recognized when the obligations are incurred or as we become entitled to the cost recovery. Selling, general and administrative costs Selling, general and administrative (“SG&A”) expenses are primarily comprised of salaries, benefits and other staff-related costs associated with sales and marketing, finance, legal and other administrative personnel; facilities and overhead costs; outside marketing, advertising and legal expenses and other general and administrative costs. SG&A expenses include costs and cost recoveries associated with certain collaborative arrangements. Net payment or reimbursement of SG&A costs for collaborations is recognized when the obligations are incurred or as we become entitled to the cost recovery. Subsequent events In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”, (“SFAS 165”). SFAS 165 is effective for financial statements ending after June 15, 2009, and we adopted SFAS 165 during the three months ended June 30, 2009. SFAS 165 establishes general standards of accounting for and disclosure of subsequent events that occur after the balance sheet date. Entities are also required to disclose the date through which subsequent events have been evaluated. We have evaluated subsequent events through the date of issuance of our financial statements in this Form 10-Q. Recent accounting pronouncements In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”), which amends guidance regarding consolidation of variable interest entities to address the elimination of the concept of a qualifying special purpose entity. SFAS 167 also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of the variable interest entity, and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, SFAS 167 requires any enterprise that holds a variable interest in a variable interest entity to provide enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. SFAS 167 is effective for interim and annual reporting periods beginning after November 30, 2009. We are currently evaluating the potential impact of SFAS 167 on our financial statements. In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” (“SFAS 168”), which will be effective for interim and annual periods ending after September 15, 2009. The FASB Accounting Standards Codification (“Codification”) will become the source of authoritative GAAP recognized by the FASB. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws continue to be sources of authoritative GAAP for SEC registrants. All existing FASB accounting standards and guidance are superseded as described in SFAS 168. Subsequently, instead of issuing new accounting standards in the form of statements, FASB staff positions, and Emerging Issues Task Force (“EITF”) abstracts, the FASB will issue Accounting Standards Updates that will update the Codification. Adoption of the Codification will not have a significant impact on our financial statements. </div>

<div> 10. Stockholders’ equity Stock repurchase programs A summary of activity under our stock repurchase programs for the three and six months ended June 30, 2009 and 2008 is as follows (in millions):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="61%"></td> <td valign="bottom" width="6%"></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="4">2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="4">2008</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle">    Shares    </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    Dollars    </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle">    Shares    </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">    Dollars    </td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> First quarter </td> <td valign="bottom">  </td> <td valign="bottom" align="right">37.5  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,997  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">-       </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Second quarter </td> <td valign="bottom">  </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">-      </td> <td valign="bottom">  </td> <td valign="bottom" align="right">32.7  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,549  </td> <td valign="bottom" nowrap="nowrap">(1) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom" align="right">37.5  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,997  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">32.7  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,549  </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td> </td> </tr> </tbody> </table>     <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tbody> <tr> <td valign="top" align="left" width="4%">(1)</td> <td valign="top" align="left"> The total cost of shares repurchased during the three and six months ended June 30, 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. </td> </tr> </tbody> </table> As of June 30, 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 May 6, 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 May 6, 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 December 31, 2008 through May 6, 2009. To the extent any awards granted under existing plans after December 31, 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. </div>

<div> 14. Other charges In the three and six months ended June 30, 2009, we recorded loss accruals for settlements of certain commercial legal proceedings aggregating $20 million. In the three and six months ended June 30, 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. </div>

1027000000

1023000000

1008000000 <div> 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 June 30, 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):   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tbody> <tr> <td width="69%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="5">      Three months ended June 30,</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="5">      Six months ended       June 30,</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">2008</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">2009</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align= "middle" colspan="2">2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Income (Numerator): </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Net income for basic and diluted EPS </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1,269  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">906  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,288  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2,006  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Shares (Denominator): </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Weighted-average shares for basic EPS </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,013  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,078  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,023  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,083  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Effect of Dilutive Securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Weighted-average shares for diluted EPS </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,017  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">  1,081  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">  1,027  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,086  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> <tr> <td height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> <td colspan="3" height="16"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Basic EPS </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.25  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">0.84  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2.24  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.85  </td> </tr> <tr> <td valign="top"> Diluted EPS </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.25  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">0.84  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">2.23  </td> <td valign="bottom">  </td> <td valign="bottom">  $</td> <td valign="bottom" align="right">1.85  </td> </tr> </tbody> </table> For the three and six months ended June 30, 2009, there were employee stock options, calculated on a weighted average basis, to purchase 51 million and 48 million 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 June 30, 2008, there were employee stock options, calculated on a weighted average basis, to purchase 53 million shares 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. In addition, shares which may be issued upon conversion of our convertible debt or upon exercise of our warrants are not included in any of the periods presented above as their impact on diluted EPS would have been anti-dilutive. Shares which may be issued under our 2007 and 2009 performance award programs were also excluded for the applicable periods because conditions under the programs were not met. </div> 97000000 147000000 -12000000 0000318154 2009-01-01 2009-06-30 0000318154 2008-01-01 2008-06-30 0000318154 2009-04-01 2009-06-30 0000318154 2008-04-01 2008-06-30 0000318154 2008-12-31 0000318154 2007-12-31 0000318154 2009-06-30 0000318154 2008-06-30 0000318154 2009-08-03 shares iso4217:USD iso4217:USD shares