Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v2.4.0.6
Fair Value Measurements
 3 Months Ended
Sep. 30, 2012
Fair Value Disclosures [Abstract]  
Fair Value Measurements
FAIR VALUE MEASUREMENTS
The Company’s financial assets and liabilities are measured and recorded at fair value, except for equity investments in privately-held companies. These equity investments are generally accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred. The Company’s non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are recorded at cost and are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred.
Fair Value Hierarchy. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1
  
Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
 
 
 
Level 2
  
Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
 
 
 
Level 3
  
Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
All of the Company’s financial instruments were classified within Level 1 or Level 2 of the fair value hierarchy as of September 30, 2012, because they were valued using quoted market prices, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include money market funds, U.S. Government agency securities and certain U.S. Treasury securities and sovereign securities. Such instruments are generally classified within Level 1 of the fair value hierarchy.
The types of instruments valued based on other observable inputs include corporate debt securities, municipal securities and certain U.S. Treasury securities and sovereign securities. The market inputs used to value these instruments generally consist of market yields, reported trades and broker/dealer quotes. Such instruments are generally classified within Level 2 of the fair value hierarchy.
The principal market in which the Company executes its foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. The Company’s foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.
Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on the Company’s Condensed Consolidated Balance Sheet as follows:
As of September 30, 2012 (In thousands)
Total
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
 
Significant Other
Observable Inputs
(Level 2)
Assets
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Corporate debt securities
$
43,998

 
$
—

 
$
43,998

Money market and other
538,499

 
538,499

 
—

Marketable securities:
 
 
 
 
 
U.S. Treasury securities
77,301

 
77,301

 
—

U.S. Government agency securities
654,477

 
654,477

 
—

Municipal securities
66,792

 
—

 
66,792

Corporate debt securities
1,061,528

 
—

 
1,061,528

Sovereign securities
27,591

 
8,584

 
19,007

Total cash equivalents and marketable securities(1)
2,470,186

 
1,278,861

 
1,191,325

Other current assets:
 
 
 
 
 
Derivative assets
1,133

 
—

 
1,133

Other non-current assets:
 
 
 
 
 
Executive Deferred Savings Plan:
 
 
 
 
 
Money market and other
4,079

 
4,079

 
—

Mutual funds
128,111

 
96,049

 
32,062

Executive Deferred Savings Plan total
132,190

 
100,128

 
32,062

Total financial assets(1)
$
2,603,509

 
$
1,378,989

 
$
1,224,520

Other current liabilities:
 
 
 
 
 
Derivative liabilities
$
(1,779
)
 
$
—

 
$
(1,779
)
Total financial liabilities
$
(1,779
)
 
$
—

 
$
(1,779
)
________________
(1) Excludes cash of $111.4 million held in operating accounts and time deposits of $56.5 million as of September 30, 2012.

Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis as of the date indicated below were presented on the Company’s Condensed Consolidated Balance Sheet as follows:  
As of June 30, 2012 (In thousands)
Total
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
 
Significant Other
Observable Inputs
(Level 2)
Assets
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market and other
$
607,038

 
$
607,038

 
$
—

Marketable securities:
 
 
 
 
 
U.S. Treasury securities
91,438

 
88,014

 
3,424

U.S. Government agency securities
634,492

 
634,492

 
—

Municipal securities
66,543

 
—

 
66,543

Corporate debt securities
917,392

 
—

 
917,392

Sovereign securities
29,145

 
10,129

 
19,016

Equity securities
10

 
10

 
—

Total cash equivalents and marketable securities(1)
2,346,058

 
1,339,683

 
1,006,375

Other current assets:
 
 
 
 
 
Derivative assets
1,407

 
—

 
1,407

Other non-current assets:
 
 
 
 
 
Executive Deferred Savings Plan:

 

 

Money market and other
732

 
732

 
—

Mutual funds
124,622

 
94,572

 
30,050

Executive Deferred Savings Plan total
125,354

 
95,304

 
30,050

Total financial assets(1)
$
2,472,819

 
$
1,434,987

 
$
1,037,832

Other current liabilities:
 
 
 
 
 
Derivative liabilities
$
(1,909
)
 
$
—

 
$
(1,909
)
Total financial liabilities
$
(1,909
)
 
$
—

 
$
(1,909
)
________________
(1) Excludes cash of $126.0 million held in operating accounts and time deposits of $62.4 million as of June 30, 2012.
There were no transfers in and out of Level 1 and Level 2 fair value measurements during the three months ended September 30, 2012 or June 30, 2012. The Company did not have any assets or liabilities measured at fair value on a recurring basis within Level 3 fair value measurements as of September 30, 2012 or June 30, 2012.