Salesforce.com 2013 Annual Report Download - page 79

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The unrealized loss for each of these fixed rate marketable securities ranged from less than $1,000 to
$140,000. The Company does not believe any of the unrealized losses represent an other-than-temporary
impairment based on its evaluation of available evidence as of January 31, 2013. The Company expects to
receive the full principal and interest on all of these marketable securities.
Fair Value Measurement
All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are
classified within Level 1 or Level 2 because the Company’s cash equivalents, marketable securities and foreign
currency derivative contracts are valued using quoted market prices or alternative pricing sources and models
utilizing market observable inputs.
During fiscal 2013 the Company changed how it categorizes certain amounts within the fair value hierarchy.
The $26.5 million of time deposits at January 31, 2012 are now reported as Level 2 fair value instruments as
these were previously shown as Level 1.
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation
methodologies in measuring fair value:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2. Other inputs that are directly or indirectly observable in the marketplace.
Level 3. Unobservable inputs which are supported by little or no market activity.
The following table presents information about the Company’s assets and liabilities that are measured at fair
value as of January 31, 2013 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,
2013
Cash equivalents (1):
Time deposits ................... $ 0 $ 22,372 $ 0 $ 22,372
Money market mutual funds ........ 385,700 0 0 385,700
Marketable securities:
Corporate notes and obligations ..... 0 689,889 0 689,889
U.S. treasury securities ............ 38,869 0 0 38,869
Mortgage backed securities ......... 0 12,723 0 12,723
Government obligations ........... 9,641 0 0 9,641
Municipal securities .............. 0 2,666 0 2,666
Collateralized mortgage
obligations .................... 0 151,876 0 151,876
U.S. agency obligations ............ 0 105,376 0 105,376
Foreign currency derivative contracts (2) . .
0 5,643 0 5,643
Total Assets ......................... $434,210 $990,545 $ 0 $1,424,755
Liabilities
Foreign currency derivative contracts (3) . .
$ 0 $ 3,307 $ 0 $ 3,307
Total Liabilities ...................... $ 0 $ 3,307 $ 0 $ 3,307
(1) Included in “cash and cash equivalents” in the accompanying Consolidated Balance Sheet as of January 31,
2013, in addition to $339.2 million of cash.
(2) Included in “prepaid expenses and other current assets” in the accompanying Consolidated Balance Sheet as
of January 31, 2013.
(3) Included in “accounts payable, accrued expenses and other liabilities” in the accompanying Consolidated
Balance Sheet as of January 31, 2013.
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