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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Bank Acceptances. The Company’s bank acceptances are held in custody by a third party. Bank acceptances are
valued using a market approach which is based on observable inputs including market interest rates from multiple
pricing sources.
Foreign Exchange Contracts. The Company’s foreign exchange contracts are short-term contracts to hedge the
Company’s foreign currency risk. Foreign exchange contracts are classified within other current assets and liabilities in
the consolidated balance sheets. For contracts that have a right of offset by its individual counterparties under master
netting arrangements, the Company presents its foreign exchange contracts on a net basis by counterparty in the con-
solidated balance sheets. Foreign exchange contracts are valued using an income approach that is based on a present
value of future cash flows model. The market-based observable inputs for the model include forward rates and credit
default swap rates. For more information on the Company’s foreign exchange contracts, see Note 12 below.
In 2015 and 2014, there were no transfers between levels. In 2014 the Company sold its auction rate securities,
which were Level 3 financial assets measured on a recurring basis, for total proceeds of $17 million and recorded a gain
of $3 million within interest and other income in the consolidated statements of income.
Note 11. Investments
The following table summarizes, by major type, the fair value and cost basis of the Company’s investments classi-
fied as available-for-sale as of July 3, 2015 (in millions):
Cost Basis
Unrealized Gains
(Losses) Fair Value
Available-for-sale securities:
U.S. Treasury securities ............................. $287 $— $287
U.S. Government agency securities .................... 95 — 95
Commercial paper ................................. 109 — 109
Certificates of deposit ............................... 99 — 99
Total ............................................. $590 $— $590
The following table summarizes, by major type, the fair value and cost basis of the Company’s investments classi-
fied as available-for-sale as of June 27, 2014 (in millions):
Cost Basis
Unrealized Gains
(Losses) Fair Value
Available-for-sale securities:
U.S. Treasury securities ............................. $180 $— $180
U.S. Government agency securities .................... 88 — 88
Commercial paper ................................. 165 — 165
Certificates of deposit ............................... 66 — 66
Total ............................................. $499 $— $499
The fair value of the Company’s investments classified as available-for-sale securities at July 3, 2015, by remain-
ing contractual maturity were as follows (in millions):
Cost Basis Fair Value
Due in less than one year (short-term investments) ......................... $262 $262
Due in one to five years (included in other non-current assets) ................. 328 328
Total .......................................................... $590 $590
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