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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 29, 2012, 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$721
$ --
$--
$721
U.S. Treasury securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--
61
--
61
U.S. Government agency securities . . . . . . . . . . . . . . . . . . . . . . . .
--
62
--
62
Total cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
721
123
--
844
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--
1
--
1
Auction-rate securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--
--
14
14
Total assets at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$721
$124
$14
$859
Liabilities:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ --
$ 22
$--
$ 22
Total liabilities at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ --
$ 22
$--
$ 22
Money Market Funds.
The Company's money market funds are funds that invest in U.S. Treasury securities 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.
U.S. Treasury Securities.
The Company's U.S. Treasury securities are investments in Treasury bills with original
maturities of three months or less, are held in custody by a third party and are recorded within cash and cash equiv-
alents in the consolidated balance sheets. U.S. Treasury 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 with original maturities of three months or less, are held in cus-
tody by a third party and are recorded within cash and cash equivalents in the consolidated balance sheets.
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.
Auction-Rate Securities.
The Company's auction-rate securities have maturity dates through 2050, are primarily
backed by insurance products and are accounted for as available-for-sale securities. These investments are classified as
long-term investments and recorded within other non-current assets in the consolidated balance sheets. Auction-rate
securities are valued by a third party using trade information related to the secondary market.
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. The Company presents its foreign exchange contracts on a net basis in the con-
solidated balance sheets due to the right of offset by its individual counterparties under master netting arrangements.
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.
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