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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The following table summarizes the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:
June 30, 2024December 31, 2023
(in millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Available-for-sale debt securities(1):
U.S. treasury securities$— $— $— $— $426 $— $— $426 
U.S. government agencies securities— — — — — 127 — 127 
Non-U.S. government securities— — — — — 10 — 10 
Certificates of deposit— — — — — 45 — 45 
Corporate debt securities— — — — — 1,451 — 1,451 
Residential mortgage and asset-backed securities— — — — — 367 — 367 
Equity securities:
Money market funds1,525 — — 1,525 4,465 — — 4,465 
Publicly traded equity securities(2)
1,429 — — 1,429 1,458 — — 1,458 
Deferred compensation plan327 — — 327 284 — — 284 
Foreign currency derivative contracts— 60 — 60 — 7 — 7 
Total$3,281 $60 $— $3,341 $6,633 $2,007 $— $8,639 
Liabilities:
Liability for MYR GmbH (“MYR”) contingent consideration$— $— $208 $208 $— $— $228 $228 
Deferred compensation plan327 — — 327 283 — — 283 
Foreign currency derivative contracts— 2 — 2 — 59 — 59 
Total$327 $2 $208 $538 $283 $59 $228 $570 
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(1)    During the three months ended March 31, 2024, we sold all of our available-for-sale debt securities and used the proceeds to partially fund our acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) discussed in Note 6. Acquisitions, Collaborations and Other Arrangements.
(2)    Publicly traded equity securities include investments in Galapagos NV (“Galapagos”) of $417 million and Arcellx, Inc. (“Arcellx”) of $371 million as of June 30, 2024, which are subject to contractual sale restrictions until August 2024 and June 2025, respectively.
Level 2 Inputs
Available-for-Sale Debt Securities
For our available-for-sale debt securities, we estimate the fair values by reviewing trading activity and pricing as of the measurement date and by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate the fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.
Foreign Currency Derivative Contracts
Our foreign currency derivative contracts have maturities of 18 months or less and all are with counterparties that have a minimum credit rating of A- or equivalent by S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. We estimate the fair values of these contracts by utilizing an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency exchange rates, Secured Overnight Financing Rate (“SOFR”) and swap rates. These inputs, where applicable, are observable at commonly quoted intervals.
Senior Unsecured Notes
The following table summarizes the total estimated fair value and carrying value of our senior unsecured notes, determined using Level 2 inputs based on their quoted market values:
(in millions)June 30, 2024December 31, 2023
Fair value$19,841 $22,567 
Carrying value$22,091 $23,834 
Level 3 Inputs
Contingent Consideration Liability
In connection with our first quarter 2021 acquisition of MYR, we are subject to a potential contingent consideration payment of up to €300 million, subject to customary adjustments, which is revalued each reporting period using probability-weighted scenarios for U.S. Food and Drug Administration (“FDA”) approval of Hepcludex until the related contingency is resolved.
The following table summarizes the change in fair value of our contingent consideration liability:
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2024202320242023
Beginning balance$222 $277 $228 $275 
Changes in valuation assumptions(1)
(10)8 (11)5 
Effect of foreign exchange remeasurement(2)
(3)2 (8)7 
Ending balance(3)
$208 $288 $208 $288 
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(1)    Included in Research and development expenses on our Condensed Consolidated Statements of Operations. The changes in 2024 and 2023 primarily related to changes in assumptions around probability and timing of regulatory approval.
(2)    Included in Other (income) expense, net on our Condensed Consolidated Statements of Operations.
(3)    Included in Other long-term obligations on our Condensed Consolidated Balance Sheets.
Liability Related to Future Royalties
We recorded a liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc. (“Immunomedics”), which is subsequently amortized using the effective interest method over the remaining estimated life. The fair value of the liability related to future royalties was approximately $1.1 billion and $1.2 billion as of June 30, 2024 and December 31, 2023, respectively, and the carrying value was $1.2 billion as of June 30, 2024 and December 31, 2023.
Liability Related to Assumed Financing Arrangement
As part of the CymaBay acquisition, we assumed a liability for a financing arrangement (see Note 6. Acquisitions, Collaborations and Other Arrangements). The fair value of the liability approximates its carrying value of $99 million as of June 30, 2024.
Nonrecurring Fair Value Measurements
During the six months ended June 30, 2024, we recorded a partial impairment charge of $2.4 billion related to certain acquired in-process research and development (“IPR&D”) assets. See Note 7. Intangible Assets for additional information.
Fair Value Level Transfers
There were no transfers between Level 1, Level 2 and Level 3 in the periods presented.