Amgen 2012 Annual Report Download - page 136

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F-37
Fair value measurement as of December 31, 2011, 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 $ 3,946 $ — $ — $ 3,946
Other government-related debt securities:
U.S. — 1,571 — 1,571
Foreign and other — 450 — 450
Corporate debt securities:
Financial — 2,508 — 2,508
Industrial — 3,146 — 3,146
Other — 289 — 289
Residential mortgage-backed securities — 518 — 518
Other mortgage- and asset-backed securities — 1,267 — 1,267
Money market mutual funds 6,266 — — 6,266
Equity securities 42 — — 42
Derivatives:
Foreign currency contracts — 172 — 172
Interest rate swap contracts — 377 — 377
Total assets $ 10,254 $ 10,298 $ — $ 20,552
Liabilities:
Derivatives:
Foreign currency contracts $ — $ 48 $ — $ 48
Cross-currency swap contracts — 26 — 26
Contingent consideration obligations in
connection with a business combination — — 190 190
Total liabilities $ — $ 74 $ 190 $ 264
The fair values 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.
Most of our other-government related and corporate debt securities are investment grade with maturity dates of five years
or less from the balance sheet date. Our other-government related debt securities portfolio is composed of securities with weighted-
average credit ratings of A+ by Standard & Poor’s (S&P) or Fitch, Inc. (Fitch) and AA- or equivalent by Moody’s Investors Service,
Inc. (Moody’s); 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 values of these securities by 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 of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other
observable inputs.
Our residential mortgage-, other mortgage- and asset-backed securities portfolio is composed entirely of senior tranches,
with credit ratings of AA+ by S&P and AAA or equivalent by Moody’s or Fitch. We estimate the fair values of these securities by
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 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.