Gain/Loss on fair value of foreign currency forward contracts

[Table of Contents](#ie9658fba2baf4e3799b1175f69eaed46_7)BIOGEN INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited, continued)Strategic InvestmentsAs of March 31, 2022 and December 31, 2021, our strategic investment portfolio was comprised of investments totaling $919.5 million and $1,110.3 million, respectively, which are included in other current assets and investments and other assets in our condensed consolidated balance sheets. Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies, which are reflected within our disclosures included in Note 6, Fair Value Measurements, to these condensed consolidated financial statements, venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities. The decrease in our strategic investment portfolio for the three months ended March 31, 2022, was primarily due to decreases in the fair value of our investments in Denali, Sage and Sangamo common stock.For additional information on our investments in Denali, Ionis Pharmaceuticals, Inc. (Ionis), Sage and Sangamo common stock, please read Note 18, Collaborative and Other Relationships, to our consolidated financial statements included in our 2021 Form 10-K.8.    DERIVATIVE INSTRUMENTS Foreign Currency Forward Contracts - Hedging InstrumentsDue to the global nature of our operations, portions of our revenue and operating expense are recorded in currencies other than the U.S. dollar. The value of revenue and operating expense measured in U.S. dollars is therefore subject to changes in foreign currency exchange rates. In order to mitigate these changes, we use foreign currency forward contracts to lock in exchange rates associated with a portion of our forecasted international revenue and operating expense.Foreign currency forward contracts in effect as of March 31, 2022 and December 31, 2021, had durations of 1 to 18 months and 1 to 15 months, respectively. These contracts have been designated as cash flow hedges and unrealized gains or losses on the portion of these foreign currency forward contracts that are included in the effectiveness test are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the table below). Realized gains and losses of such contracts are recognized in revenue when the sale of product in the currency being hedged is recognized and in operating expense when the expense in the currency being hedged is recorded. We recognize all cash flow hedge reclassifications from accumulated other comprehensive income (loss) and fair value changes of excluded portions in the same line item in our condensed consolidated statements of income that has been impacted by the hedged item.The notional amount of foreign currency forward contracts that were entered into to hedge forecasted revenue and operating expense is summarized as follows:

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|  |  | Notional Amount |
| (In millions) |  | As of March 31, 2022 |  | As of December 31, 2021 |
| Euro |  | $ | 1,631.2  |  |  | $ | 1,828.0  |  |
| British pound |  | 126.6  |  |  | 166.2  |  |
| Swiss franc |  | 128.6  |  |  | —  |  |
| Japanese yen |  | 55.0  |  |  | 72.7  |  |
| Canadian dollar |  | 44.6  |  |  | 59.9  |  |
| Total foreign currency forward contracts |  | $ | 1,986.0  |  |  | $ | 2,126.8  |  |

The pre-tax portion of the fair value of these foreign currency forward contracts that were included in accumulated other comprehensive income (loss) in total equity is summarized as follows:

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| (In millions) |  | As of March 31, 2022 |  | As of December 31, 2021 |
| Unrealized gains |  | $ | 76.4  |  |  | $ | 60.8  |  |
| Unrealized (losses) |  | (4.3) |  |  | (7.0) |  |
| Net unrealized gains (losses) |  | $ | 72.1  |  |  | $ | 53.8  |  |

We expect the net unrealized gains of $72.1 million to be settled over the next 18 months, of which $72.0 million of these net unrealized gains are expected to be settled over the next 12 months, with any amounts in 22
