SanDisk 2013 Annual Report Download - page 180

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Treasury securities. Level 1 securities represent quoted prices in active markets, and therefore do not
require significant management judgment.
Instruments that are classified within Level 2 of the fair value hierarchy primarily include U.S.
government-sponsored agency securities, international government securities, corporate notes and bonds,
municipal notes and 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 29, 2013 December 30, 2012
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Money market funds . . $ 760,363 $ — $ — $ 760,363 $ 582,743 $ — $ — $ 582,743
Fixed income securities . 160,194 4,985,059 — 5,145,253 27,386 4,917,939 — 4,945,325
Derivative assets ..... — 777 — 777 — 20,058 — 20,058
Total financial
assets ........ $920,557 $ 4,985,836 $ — $ 5,906,393 $ 610,129 $ 4,937,997 $ — $ 5,548,126
Derivative liabilities . . . $ — $ 45,859 $ — $ 45,859 $ — $ 13,584 $ — $ 13,584
Total financial
liabilities ..... $ — $ 45,859 $ — $ 45,859 $ — $ 13,584 $ — $ 13,584
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 29, 2013 December 30, 2012
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash equivalents(1) .... $773,435 $ 33,099 $ — $ 806,534 $ 582,743 $ 229,360 $ — $ 812,103
Short-term marketable
securities ......... 15,090 1,904,521 — 1,919,611 16,589 1,863,445 — 1,880,034
Long-term marketable
securities ......... 132,032 3,047,439 — 3,179,471 10,797 2,825,134 — 2,835,931
Other current assets . . . — 777 — 777 — 19,064 — 19,064
Other non-current
assets ........... — — — — — 994 — 994
Total financial
assets ........ $920,557 $ 4,985,836 $ — $ 5,906,393 $ 610,129 $ 4,937,997 $ — $ 5,548,126
Other current accrued
liabilities ......... $ — $ 45,741 $ — $ 45,741 $ — $ 13,584 $ — $ 13,584
Non-current liabilities . . — 118 — 118 — — — —
Total financial
liabilities ..... $ — $ 45,859 $ — $ 45,859 $ — $ 13,584 $ — $ 13,584
(1) Cash equivalents exclude cash of $179.7 million and $183.4 million included in Cash and cash equivalents on the
Consolidated Balance Sheets as of December 29, 2013 and December 30, 2012, respectively.
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