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93
The fair value of our financial assets and liabilities at December 3, 2010 was determined using the following inputs (in
thousands):
Assets:
Cash equivalents:
Commercial paper
Money market mutual funds and repurchase
agreements
Municipal securities
Time deposits
U.S. Treasury securities
Short-term investments:
Corporate bonds and commercial paper
Foreign government securities
Marketable equity securities
Municipal securities
U.S. agency securities
U.S. Treasury securities
Prepaid expenses and other current assets:
Foreign currency derivatives
Other assets:
Deferred compensation plan assets
Total assets
Fair Value Measurements at Reporting Date Using
Total
$ 41,389
477,259
350
64,006
68,196
984,518
33,386
11,184
119,605
230,371
339,060
18,821
11,071
$ 2,399,216
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
$ —
477,259
—
64,006
—
—
—
11,184
—
—
—
—
617
$ 553,066
Significant
Other
Observable
Inputs
(Level 2)
$ 41,389
—
350
—
68,196
984,518
33,386
—
119,605
230,371
339,060
18,821
10,454
$ 1,846,150
Significant
Unobservable
Inputs
(Level 3)
$ —
—
—
—
—
—
—
—
—
—
—
—
—
$ —
Liabilities:
Accrued expenses:
Foreign currency derivatives
Total liabilities
$ 1,945
$ 1,945
$ —
$ —
$ 1,945
$ 1,945
$ —
$ —
See Note 3 for further information regarding the fair value of our financial instruments.
Our fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers with
a minimum credit rating of BBB and a weighted average credit rating of AA-. We value these securities based on pricing from
pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted
prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our
fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our
financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by
observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques.
Our procedures include controls to ensure that appropriate fair values are recorded such as comparing prices obtained from multiple
independent sources.
Our deferred compensation plan assets consist of prime money market funds and mutual funds.
We also have direct investments in privately held companies accounted for under the cost method, which are periodically
assessed for other-than-temporary impairment. If we determine that an other-than-temporary impairment has occurred, we write
down the investment to its fair value. We estimate fair value of our cost method investments considering available information
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)