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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table presents information about the Company’s financial assets and liabilities that are measured at
fair value on a recurring basis as of June 28, 2013, and indicates the fair value hierarchy of the valuation techniques
utilized to determine such value (in millions):
Fair Value Measurements at
Reporting Date Using
Level 1 Level 2 Level 3 Total
Assets:
Cash equivalents
Money market funds ................................. $1,227 $— $— $1,227
Auction-rate securities .................................. — — 14 14
Total assets at fair value ............................. $1,227 $— $14 $1,241
Liabilities:
Foreign exchange contracts .............................. $ — $57 $— $ 57
Total liabilities at fair value .......................... $ — $57 $— $ 57
Money Market Funds. The Company’s money market funds are funds that invest in U.S. Treasury and U.S.
Government Agency securities and are recorded within cash and cash equivalents in the consolidated balance sheets.
Money market funds are valued based on quoted market prices.
Certificates of Deposit. The Company’s certificates of deposit are investments which are held in custody by a third
party and recorded within cash and cash equivalents or short-term investments in the consolidated balance sheets
depending on their original maturities. Certificates of deposit are valued using fixed interest rates.
Commercial Paper. The Company’s commercial paper securities are investments issued by corporations which are
held in custody by a third party with original maturities of twelve months or less and are recorded within short-term
investments in the consolidated balance sheets. Commercial paper securities are valued using a market approach which
is based on observable inputs including market interest rates from multiple pricing sources.
U.S. Government Agency Securities. The Company’s U.S. Government agency securities are investments in fixed
income securities sponsored by the U.S. Government and are held in custody by a third party and recorded within
short-term investments or long term other assets in the consolidated balance sheets depending on their original
maturities. U.S. Government agency securities are valued using a market approach which is based on observable
inputs including market interest rates from multiple pricing sources.
U.S. Treasury Securities. The Company’s U.S. Treasury securities are direct obligations of the U.S. federal govern-
ment, are held in custody by a third party and are recorded within cash and cash equivalents or long-term other assets
in the consolidated balance sheets depending on their original maturities. U.S. Treasury securities are valued using a
market approach which is based on observable inputs including market interest rates from multiple pricing sources.
Bank Acceptances. The Company’s bank acceptances are held in custody by a third party and recorded within
cash and cash equivalents in the consolidated balance sheets. Bank acceptances are valued using a market approach
which is based on observable inputs including market interest rates from multiple pricing sources.
Auction-Rate Securities. The Company’s auction-rate securities had maturity dates through 2050, were primarily
backed by insurance products and were accounted for as available-for-sale securities. These investments were classified
as long-term investments and recorded within other non-current assets in the consolidated balance sheets. Auction-
rate securities were valued by a third party using unobservable inputs including indicative bids on similar securities.
During 2014, the Company sold its auction rate securities for total proceeds of $17 million and recorded a gain of $3
million within interest and other income in the consolidated statements of income.
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