Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Summary of assets and liabilities recorded at fair value

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:


	Fair Value Measurements on a Recurring Basis
	As of September 30, 2022
(In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	3,191.8	$	—	$	3,191.8	$	—
Marketable debt securities:
Corporate debt securities	1,219.1		—		1,219.1		—
Government securities	702.0		—		702.0		—
Mortgage and other asset backed securities	174.7		—		174.7		—
Marketable equity securities	896.0		896.0		—		—
Other current assets:
Receivable from Samsung BioLogics(1)	790.8		—		—		790.8
Other assets:
Derivative contracts	195.9		—		195.9		—
Plan assets for deferred compensation	32.2		—		32.2		—
Receivable from Samsung BioLogics(1)	402.8		—		—		402.8
Total	$	7,605.3	$	896.0	$	5,515.7	$	1,193.6
Liabilities:
Derivative contracts	$	22.8	$	—	$	22.8	$	—
Contingent consideration obligations	195.4		—		—		195.4
Total	$	218.2	$	—	$	22.8	$	195.4

(1) Represents the fair value of the current and non-current payments due from Samsung BioLogics as a result of the sale of our 49.9% equity interest in Samsung Bioepis to Samsung BioLogics during the second quarter of 2022, for which we elected the fair value option. For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 2, Dispositions, to these condensed consolidated financial statements.


	Fair Value Measurements on a Recurring Basis
	As of December 31, 2021
(In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,632.2	$	—	$	1,632.2	$	—
Marketable debt securities:
Corporate debt securities	1,108.2		—		1,108.2		—
Government securities	1,192.7		—		1,192.7		—
Mortgage and other asset backed securities	132.2		—		132.2		—
Marketable equity securities	1,048.5		181.7		866.8		—
Derivative contracts	80.9		—		80.9		—
Plan assets for deferred compensation	33.4		—		33.4		—
Total	$	5,228.1	$	181.7	$	5,046.4	$	—
Liabilities:
Derivative contracts	$	10.8	$	—	$	10.8	$	—
Contingent consideration obligations	209.1		—		—		209.1
Total	$	219.9	$	—	$	10.8	$	209.1

Summary of fair and carrying value of debt instruments

The following table presents quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our level 3 financial assets and liabilities measured at fair value on a recurring basis:

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Weighted Average

(In millions)

September 30, 2022

December 31, 2021

Valuation Technique

Significant
Unobservable Input(s)

Range

September 30, 2022

December 31, 2021

Liabilities:

Contingent consideration obligations

195.4

209.1

Discounted cash flow

Discount rate

4.50%

4.50

1.30

Expected timing of achievement of development milestones

2023 to 2028

—

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


	As of September 30, 2022				As of December 31, 2021
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value

3.625% Senior Notes due September 15, 2022(1)	$	—	$	—	$	1,020.0	$	999.1
4.050% Senior Notes due September 15, 2025	1,697.8		1,744.3		1,895.2		1,742.9
2.250% Senior Notes due May 1, 2030	1,183.0		1,492.7		1,475.9		1,492.0
5.200% Senior Notes due September 15, 2045	997.2		1,100.2		1,463.0		1,099.9
3.150% Senior Notes due May 1, 2050	965.6		1,473.6		1,457.7		1,473.2
3.250% Senior Notes due February 15, 2051	452.8		468.4		692.9		466.0
Total	$	5,296.4	$	6,279.2	$	8,004.7	$	7,273.1

(1) Our 3.625% Senior Notes due September 15, 2022, were redeemed in full in July 2022. For additional information, please read Note 12, Indebtedness, to these condensed consolidated financial statements.

Fair value of contingent consideration obligations

In connection with our acquisitions of Convergence and Biogen International Neuroscience GmbH, 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 are classified as Level 3 measurements:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2022		2021		2022		2021
Fair value, beginning of period	$	197.5	$	226.3	$	209.1	$	259.8
Changes in fair value	(2.1)		(15.6)		(13.7)		(49.1)

Fair value, end of period	$	195.4	$	210.7	$	195.4	$	210.7