Salesforce.com 2016 Annual Report Download - page 99

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The following table presents information about the Company’s assets and liabilities that are measured at fair
value as of January 31, 2015 and indicates the fair value hierarchy of the valuation (in thousands):
Description
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Balances as of
January 31,
2015
Cash equivalents (1):
Time deposits ................... $ 0 $ 292,487 $ 0 $ 292,487
Money market mutual funds ........ 13,983 0 0 13,983
Marketable securities:
Corporate notes and obligations ..... 0 608,274 0 608,274
U.S. treasury securities ............ 0 73,482 0 73,482
Mortgage backed obligations ....... 0 43,925 0 43,925
Asset backed securities ............ 0 120,137 0 120,137
Municipal securities .............. 0 36,537 0 36,537
Foreign government obligations ..... 0 12,301 0 12,301
U.S. agency obligations ............ 0 19,510 0 19,510
Covered bonds ................... 0 68,001 0 68,001
Foreign currency derivative
contracts (2) ....................... 0 10,611 0 10,611
Total Assets ......................... $13,983 $1,285,265 $ 0 $1,299,248
Liabilities
Foreign currency derivative
contracts (3) ....................... $ 0 $ 5,694 $ 0 $ 5,694
Total Liabilities ...................... $ 0 $ 5,694 $ 0 $ 5,694
(1) Included in “cash and cash equivalents” in the accompanying consolidated balance sheet as of January 31,
2015, in addition to $601.6 million of cash.
(2) Included in “prepaid expenses and other current assets” in the accompanying consolidated balance sheet as
of January 31, 2015.
(3) Included in “accounts payable, accrued expenses and other liabilities” in the accompanying consolidated
balance sheet as of January 31, 2015.
Derivative Financial Instruments
The Company enters into foreign currency derivative contracts with financial institutions to reduce the risk
that its cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. The
Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily
denominated in Euros, Japanese yen, Canadian dollars, Australian dollars and British pounds. The Company’s
foreign currency derivative contracts, which are not designated as hedging instruments, are used to reduce the
exchange rate risk associated primarily with intercompany receivables and payables. The Company’s derivative
financial instruments program is not designated for trading or speculative purposes. As of January 31, 2016 and
2015, the foreign currency derivative contracts that were not settled were recorded at fair value on the
consolidated balance sheets.
Foreign currency derivative contracts are marked-to-market at the end of each reporting period with gains
and losses recognized as other expense to offset the gains or losses resulting from the settlement or
remeasurement of the underlying foreign currency denominated receivables and payables. While the contract or
notional amount is often used to express the volume of foreign currency derivative contracts, the amounts
potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’
obligations under the agreements exceed the obligations of the Company to the counterparties.
92