Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:

(In millions)	As of March 31, 2013		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	358.6	$	—	$	358.6	$	—
Reverse repurchase agreements	2,968.0		—		2,968.0		—
Marketable debt securities:
Corporate debt securities	—		—		—		—
Government securities	—		—		—		—
Mortgage and other asset backed securities	—		—		—		—
Marketable equity securities	11.6		11.6		—		—
Venture capital investments	18.0		—		—		18.0
Derivative contracts	7.0		—		7.0		—
Plan assets for deferred compensation	15.1		—		15.1		—
Total	$	3,378.3	$	11.6	$	3,348.7	$	18.0
Liabilities:
Derivative contracts	$	3.2	$	—	$	3.2	$	—
Contingent consideration obligations	293.7		—		—		293.7
Total	$	296.9	$	—	$	3.2	$	293.7

Our reverse repurchase agreement matured on April 1, 2013. This agreement was entered into in anticipation of our acquisition of TYSABRI rights from Elan and it matured with no difference in fair value. The reverse repurchase agreement was collaterialized by our counterparty setting aside U.S. government and agency securities with a fair value of approximately 102% of the principal amount.

(In millions)	As of December 31, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	439.4	$	—	$	439.4	$	—
Marketable debt securities:
Corporate debt securities	1,001.0		—		1,001.0		—
Government securities	1,657.8		—		1,657.8		—
Mortgage and other asset backed securities	512.9		—		512.9		—
Marketable equity securities	9.0		9.0		—		—
Venture capital investments	20.3		—		—		20.3
Derivative contracts	1.8		—		1.8		—
Plan assets for deferred compensation	14.3		—		14.3		—
Total	$	3,656.5	$	9.0	$	3,627.2	$	20.3
Liabilities:
Derivative contracts	$	14.4	$	—	$	14.4	$	—
Contingent consideration obligations	293.9		—		—		293.9
Total	$	308.3	$	—	$	14.4	$	293.9

There has been no impairment of our assets measured at fair value during the three months ended March 31, 2013. In addition, there were no changes in valuation techniques or inputs utilized or transfers between fair value measurement levels during the three months ended March 31, 2013. The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities were determined through valuation models of third party pricing services. For a description of our validation procedures related to prices provided by third party pricing services, refer to Note 1, Summary of Significant Accounting Policies: Fair Value Measurements, to our consolidated financial statements included within our 2012 Form 10-K.

Marketable Equity Securities and Venture Capital Investments

Our marketable equity securities represent investments in publicly traded equity securities. Our venture capital investments, which are Level 3 measurements, include investments in certain venture capital funds, accounted for at fair value, that primarily invest in small privately-owned, venture-backed biotechnology companies. These venture capital investments represented approximately 0.2% of total assets as of March 31, 2013 and December 31, 2012, respectively.

The following table provides a roll-forward of the fair value of our venture capital investments that are Level 3 assets:

	For the Three Months Ended March 31,
(In millions)	2013			2012
Fair value, beginning of period	$	20.3		$	23.5
Unrealized gains included in earnings	0.6			0.4
Unrealized losses included in earnings	(1.4		)	(1.8		)
Settlements	(1.5		)	—
Fair value, end of period	$	18.0		$	22.1

Debt Instruments

The fair and carrying values of our debt instruments, which are Level 2 liabilities, are summarized as follows:

	As of March 31, 2013				As of December 31, 2012
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes payable to Fumedica	$	19.3	$	17.5	$	20.0	$	17.9
Credit facility	200.0		200.0		—		—
6.0% Senior Notes due March 1, 2013	—		—		453.7		450.0
6.875% Senior Notes due March 1, 2018	670.1		584.8		681.6		586.4
Total	$	889.4	$	802.3	$	1,155.3	$	1,054.3

The fair value of our notes payable to Fumedica was estimated using market observable inputs, including current interest and foreign currency exchange rates. The fair value of our 6.875% Senior Notes was determined through market, observable, and corroborated sources. For additional information related to our debt instruments, please read Note 11, Indebtedness to these condensed consolidated financial statements.

Contingent Consideration Obligations

The following table provides a roll-forward of the fair values of our contingent consideration obligations that are Level 3 measurements:

	For the Three Months Ended March 31,
(In millions)	2013			2012
Fair value, beginning of period	$	293.9		$	151.0
Additions	—			117.6
Changes in fair value	2.3			1.3
Payments	(2.5		)	—
Fair value, end of period	$	293.7		$	269.9

As of March 31, 2013 and December 31, 2012, approximately $272.0 million and $271.5 million, respectively, of the fair value of our total contingent consideration obligations were reflected as components of other long-term liabilities within our condensed consolidated balance sheets with the remaining balances reflected as a component of accrued expenses and other.