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:



As of June 30, 2018 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	732.2	$	—	$	732.2	$	—
Marketable debt securities:
Corporate debt securities	2,045.5		—		2,045.5		—
Government securities	828.7		—		828.7		—
Mortgage and other asset backed securities	260.0		—		260.0		—
Marketable equity securities	489.7		70.1		419.6		—
Derivative contracts	40.0		—		40.0		—
Plan assets for deferred compensation	28.2		—		28.2		—
Total	$	4,424.3	$	70.1	$	4,354.2	$	—
Liabilities:
Derivative contracts	$	43.5	$	—	$	43.5	$	—
Contingent consideration obligations	499.9		—		—		499.9
Total	$	543.4	$	—	$	43.5	$	499.9



As of December 31, 2017 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,229.4	$	—	$	1,229.4	$	—
Marketable debt securities:
Corporate debt securities	2,609.8		—		2,609.8		—
Government securities	1,919.3		—		1,919.3		—
Mortgage and other asset backed securities	643.4		—		643.4		—
Marketable equity securities	11.8		11.8		—		—
Derivative contracts	2.7		—		2.7		—
Plan assets for deferred compensation	28.5		—		28.5		—
Total	$	6,444.9	$	11.8	$	6,433.1	$	—
Liabilities:
Derivative contracts	$	111.3	$	—	$	111.3	$	—
Contingent consideration obligations	523.6		—		—		523.6
Total	$	634.9	$	—	$	111.3	$	523.6

There have been no impairments of our assets measured and carried at fair value during the three and six months ended June 30, 2018. In addition, there were no changes in valuation techniques or inputs utilized or transfers between fair value measurement levels during the three and six months ended June 30, 2018. The fair values of Level 2 instruments classified as cash equivalents, marketable debt securities and our marketable equity security investment in Ionis Pharmaceuticals, Inc. (Ionis) were determined through third-party pricing services. For additional information on our collaboration agreement with Ionis, please read Note 18, Collaborative and Other Relationships, to these condensed consolidated financial statements. For a description of our validation procedures related to prices provided by third-party pricing services, please read Note 1, Summary of Significant Accounting Policies: Fair Value Measurements, to our consolidated financial statements included in our 2017 Form 10-K.

Debt Instruments

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



	As of June 30, 2018				As of December 31, 2017
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value
Notes payable to Fumedica AG	$	—	$	—	$	3.2	$	3.2
2.900% Senior Notes due September 15, 2020	1,491.0		1,474.3		1,517.7		1,482.4
3.625% Senior Notes due September 15, 2022	999.6		994.9		1,032.9		994.3
4.050% Senior Notes due September 15, 2025	1,757.9		1,737.0		1,851.9		1,736.3
5.200% Senior Notes due September 15, 2045	1,854.5		1,722.2		2,077.6		1,722.0
Total	$	6,103.0	$	5,928.4	$	6,483.3	$	5,938.2

In connection with our 2006 distribution agreement with Fumedica AG, we issued notes totaling 61.4 million Swiss Francs that were payable to Fumedica AG in varying amounts from June 2008 through June 2018. In June 2018 we redeemed our remaining note payable to Fumedica AG.

The fair value of our notes payable to Fumedica AG, as of December 31, 2017, was estimated using market observable inputs, including current interest and foreign currency exchange rates. The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources. For additional information on our debt instruments, please read Note 12, Indebtedness, to our consolidated financial statements included in our 2017 Form 10-K.

Contingent Consideration Obligations

In connection with our acquisitions of Convergence Pharmaceuticals Ltd., Stromedix Inc. and Biogen International Neuroscience GmbH in 2015, 2012 and 2010, respectively, we agreed to make additional payments based upon the achievement of certain milestone events. The following table provides a roll forward of the fair values of our contingent consideration obligations, which includes Level 3 measurements:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions)	2018		2017		2018			2017
Fair value, beginning of period	$	498.0	$	470.9	$	523.6		$	467.6
Changes in fair value	1.9		21.2		(3.7		)	31.2
Payments	—		—		(20.0		)	(6.7		)
Fair value, end of period	$	499.9	$	492.1	$	499.9		$	492.1

As of June 30, 2018 and December 31, 2017, $270.5 million and $279.0 million, respectively, of the fair value of our contingent consideration obligations was reflected as a component of other long-term liabilities in our condensed consolidated balance sheets with the remaining balance reflected as a component of accrued expenses and other.

For the three and six months ended June 30, 2018, changes in the fair value of our contingent consideration obligations were primarily due to an increase in interest rates used to revalue our contingent consideration liabilities, the passage of time and a milestone payment.

For the three and six months ended June 30, 2017, changes in the fair value of our contingent consideration obligations were primarily due to an increase in the probability of achieving certain developmental milestones.