SanDisk 2012 Annual Report Download - page 178

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
bonds, asset-backed securities and mortgage-backed securities. The Company’s Level 2 securities are primarily
valued using quoted market prices for similar instruments and nonbinding market prices that are corroborated by
observable market data. The Company uses inputs such as actual trade data, benchmark yields, broker/dealer
quotes and other similar data, which are obtained from independent pricing vendors, quoted market prices or
other sources to determine the ultimate fair value of the Company’s assets and liabilities. The inputs and fair
value are reviewed for reasonableness and may be further validated by comparison to publicly available
information or compared to multiple independent valuation sources. In addition, the Company reviews third-
party valuation models, independently calculates the fair value of selective financial instruments and assesses the
controls at its third-party valuation service providers in determining the overall reasonableness of the fair value
of its Level 2 financial instruments.
Financial assets and liabilities measured and recorded at fair value on a recurring basis consisted of the
following types of instruments (in thousands):
December 30, 2012 January 1, 2012
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Money market funds ..... $ 582,743 $ — $ — $ 582,743 $ 901,500 $ — $ — $ 901,500
Fixed income securities . . . 27,386 4,917,939 — 4,945,325 214,431 4,312,929 — 4,527,360
Derivative assets ........ — 20,058 — 20,058 — 21,093 — 21,093
Other .................—————4,501 — 4,501
Total financial
assets ........... $ 610,129 $4,937,997 $ — $5,548,126 $1,115,931 $4,338,523 $ — $5,454,454
Derivative liabilities ..... $ — $ 13,584 $ — $ 13,584 $ — $ 45,835 $ — $ 45,835
Total financial
liabilities ........ $ — $ 13,584 $ — $ 13,584 $ — $ 45,835 $ — $ 45,835
Financial assets and liabilities measured and recorded at fair value on a recurring basis were presented on
the Company’s Consolidated Balance Sheets as follows (in thousands):
December 30, 2012 January 1, 2012
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash equivalents(1) ....... $ 582,743 $ 229,360 $ — $ 812,103 $ 926,994 $ 54,111 $ — $ 981,105
Short-term marketable
securities ............ 16,589 1,863,445 — 1,880,034 155,538 1,525,954 — 1,681,492
Long-term marketable
securities ............ 10,797 2,825,134 — 2,835,931 33,399 2,732,864 — 2,766,263
Other current assets and
other non-current
assets ............... — 20,058 — 20,058 — 25,594 — 25,594
Total financial
assets ........... $ 610,129 $4,937,997 $ — $5,548,126 $1,115,931 $4,338,523 $ — $5,454,454
Other current accrued
liabilities ............ $ — $ 13,584 $ — $ 13,584 $ — $ 40,045 $ — $ 40,045
Non-current liabilities ....—————5,790 — 5,790
Total financial
liabilities ........ $ — $ 13,584 $ — $ 13,584 $ — $ 45,835 $ — $ 45,835
(1) Cash equivalents exclude cash of $183.4 million and $186.4 million included in Cash and cash equivalents
on the Consolidated Balance Sheets as of December 30, 2012 and January 1, 2012, respectively.
During the fiscal year ended December 30, 2012, the Company had no transfers of financial assets or
liabilities between Level 1 and Level 2. As of December 30, 2012 and January 1, 2012, the Company had no
financial assets or liabilities categorized as Level 3.
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