GILEAD SCIENCES, INC.GILD
GILEAD SCIENCES, INC. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Recurring 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:
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale debt securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. treasury securities | $ | 1,224 | $ | — | $ | — | $ | 1,224 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||
| U.S. government agencies securities | — | 15 | — | 15 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | — | 1,398 | — | 1,398 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage and asset-backed securities | — | 407 | — | 407 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Equity securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | 6,150 | — | — | 6,150 | 8,502 | — | — | 8,502 | ||||||||||||||||||||||||||||||||||||||||||
| Publicly traded equity securities | 1,961 | — | — | 1,961 | 1,561 | — | — | 1,561 | ||||||||||||||||||||||||||||||||||||||||||
| Deferred compensation plan | 406 | — | — | 406 | 343 | — | — | 343 | ||||||||||||||||||||||||||||||||||||||||||
| Foreign currency derivative contracts | — | 56 | — | 56 | — | 128 | — | 128 | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 9,741 | $ | 1,875 | $ | — | $ | 11,616 | $ | 10,405 | $ | 128 | $ | — | $ | 10,533 | ||||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Contingent consideration liability | $ | — | $ | — | $ | 278 | $ | 278 | $ | — | $ | — | $ | 206 | $ | 206 | ||||||||||||||||||||||||||||||||||
| Deferred compensation plan | 406 | — | — | 406 | 343 | — | — | 343 | ||||||||||||||||||||||||||||||||||||||||||
| Foreign currency derivative contracts | — | 72 | — | 72 | — | 3 | — | 3 | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 406 | $ | 72 | $ | 278 | $ | 757 | $ | 343 | $ | 3 | $ | 206 | $ | 552 | ||||||||||||||||||||||||||||||||||
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.
Level 3 Inputs
Contingent Consideration Liability
In connection with our first quarter 2021 acquisition of MYR GmbH, 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 bulevirtide until the related contingency is resolved.
The following table summarizes the change in fair value of our contingent consideration liability:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Beginning balance | $ | 206 | $ | 228 | $ | 275 | ||||||||||||||
Changes in valuation assumptions(1) | 43 | (7) | (60) | |||||||||||||||||
Effect of foreign exchange remeasurement(2) | 29 | (14) | 12 | |||||||||||||||||
Ending balance(3) | $ | 278 | $ | 206 | $ | 228 | ||||||||||||||
_______________________________
(1) Included in Research and development expenses on our Consolidated Statements of Operations. The changes in 2025 primarily related to changes in assumptions around probability. The changes in 2023 primarily related to changes in assumptions around probability and timing of regulatory approval.
(2) Included in Other (income) expense, net on our Consolidated Statements of Operations.
(3) Included in Other current liabilities as of December 31, 2025 and in Other long-term liabilities as of December 31, 2024 and 2023 on our Consolidated Balance Sheets, respectively.
Fair Value Level Transfers
There were no transfers between Level 1, Level 2 and Level 3 in the periods presented.
Nonrecurring Fair Value Measurements
In 2025, 2024 and 2023, we recorded partial impairment charges of $590 million, $4.2 billion and $50 million, respectively, related to certain acquired IPR&D assets. See Note 8. Goodwill and Intangible Assets for additional information.
In 2023, we recorded a $51 million write-off of our finite-lived intangible asset related to filgotinib as discussed in Note 8. Goodwill and Intangible Assets, as well as a $381 million write-off of manufacturing assets related to changes in our manufacturing strategy as discussed in Note 9. Other Financial Information. Both charges were recorded within Cost of goods sold on our Consolidated Statements of Operations.
Other Fair Value Disclosures
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:
| December 31, | ||||||||||||||
| (in millions) | 2025 | 2024 | ||||||||||||
| Fair value | $ | 22,342 | $ | 23,335 | ||||||||||
| Carrying value | $ | 23,827 | $ | 25,562 | ||||||||||
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, determined using Level 3 inputs, was approximately $0.8 billion and $0.9 billion as of December 31, 2025 and 2024, respectively, and the carrying value was $1.1 billion as of December 31, 2025 and 2024. See Note 10. Debt and Credit Facilities for additional information.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 24, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.