Amgen 2010 Annual Report Download - page 155

Fair value measurement at December 31, 2009 using:
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
Assets:
Available-for-sale investments:
U.S. Treasury securities ................ $1,935 $ — $— $ 1,935
Obligations of U.S. government agencies and
FDIC guaranteed bank debt............ — 3,792 — 3,792
Corporate debt securities ............... — 4,285 — 4,285
Mortgage and asset backed securities ...... — 491 — 491
Money market mutual funds ............. 2,784 — — 2,784
Other short-term interest bearing securities . . — 55 — 55
Equity securities...................... 55 — — 55
Derivatives ........................... — 153 — 153
Total assets. . ...................... $4,774 $8,776 $— $13,550
Liabilities:
Derivatives ........................... $ — $ 152 $— $ 152
Total liabilities ..................... $ — $ 152 $— $ 152
The fair value of our U.S. Treasury securities, money market mutual funds and equity securities are based on
quoted market prices in active markets with no valuation adjustment.
Substantially all of our other government related and corporate debt securities are investment grade with
maturity dates of five years or less. Our other government related debt securities portfolio is comprised of securities
with a weighted average credit rating of “AAA” or equivalent by Standard and Poor’s (“S&P”), Moody’s Investors
Services, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”), and our corporate debt securities portfolio has a weighted
average credit rating of “A” or equivalent by S&P, Moody’s or Fitch. We estimate the fair value of these securities
taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry
standard valuation models, including both income and market based approaches, for which all significant inputs are
observable, either directly or indirectly, to estimate fair value. These inputs include reported trades and broker/
dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable
inputs.
Our mortgage and asset backed securities portfolio is comprised entirely of senior tranches, with a credit rating
of “AAA” or equivalent by S&P, Moody’s or Fitch. We estimate the fair value of these securities taking into
consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard
valuation models, including both income and market based approaches, for which all significant inputs are
observable, either directly or indirectly, to estimate fair value. These inputs include reported trades and broker/
dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default
projections based on historical data and other observable inputs.
We value our other short-term interest bearing securities at amortized cost which approximates fair value given
their near term maturity dates.
Substantially all of our foreign currency forward and option derivatives contracts have maturities of three years
or less and all are entered into with counterparties that have a minimum credit rating of “A-” or equivalent by S&P,
Moody’s or Fitch. We estimate the fair value of these contracts taking into consideration valuations obtained from a
third-party valuation service that utilizes an income-based industry standard valuation model for which all
significant inputs are observable, either directly or indirectly. These inputs include quoted foreign currency
F-33
AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)