Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
 3 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately held companies. Equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. See Note 7 “Debt” to our Condensed Consolidated Financial Statements for disclosure of the fair value of our Senior Notes, as defined in that Note.
Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred and, for goodwill, also annually.
Fair Value of Financial Instruments. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items.
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. There were no transfers between Level 1, Level 2 and Level 3 fair value measurements during the three months ended September 30, 2024.
The types of instruments valued based on quoted market prices in active markets include money market funds, certain U.S. Treasury securities, U.S. Government agency securities and equity 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. 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 we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants generally are large financial institutions. Our 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 dates indicated below, were presented on our Condensed Consolidated Balance Sheets as follows:
Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs
As of September 30, 2024 (In thousands) Total  (Level 1)  (Level 2)
Assets
Cash equivalents:
Money market funds and other $ 1,558,751  $ 1,558,751  $ — 
U.S. Treasury securities 6,720  —  6,720 
Marketable securities:
Corporate debt securities 835,105  —  835,105 
Municipal securities 43,673  —  43,673 
U.S. Government agency securities 97,887  97,887  — 
U.S. Treasury securities 729,376  498,241  231,135 
Equity securities 19,654  19,654  — 
Total cash equivalents and marketable securities(1)
3,291,166  2,174,533  1,116,633 
Other current assets:
Derivative assets 25,314  —  25,314 
Other non-current assets:
Executive Deferred Savings Plan 318,855  286,149  32,706 
Total financial assets(1)
$ 3,635,335  $ 2,460,682  $ 1,174,653 
Liabilities
Derivative liabilities $ (31,518) $ —  $ (31,518)
Total financial liabilities $ (31,518) $ —  $ (31,518)
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(1) Excludes cash of $326.9 million held in operating accounts and time deposits of $1.01 billion (of which $84.9 million were cash equivalents) as of September 30, 2024.
 
Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs
As of June 30, 2024 (In thousands) Total (Level 1) (Level 2)
Assets
Cash equivalents:
Corporate debt securities $ 2,312  $ —  $ 2,312 
Money market funds and other 1,585,832  1,585,832  — 
U.S. Treasury securities 35,158  —  35,158 
Marketable securities:
Corporate debt securities 771,920  —  771,920 
Municipal securities 41,159  —  41,159 
U.S. Government agency securities 105,874  105,874  — 
U.S. Treasury securities 716,148  476,230  239,918 
Equity securities 25,566  25,566  — 
Total cash equivalents and marketable securities(1)
3,283,969  2,193,502  1,090,467 
Other current assets:
Derivative assets 36,503  —  36,503 
Other non-current assets:
Executive Deferred Savings Plan 303,365  272,816  30,549 
Total financial assets(1)
$ 3,623,837  $ 2,466,318  $ 1,157,519 
Liabilities
Derivative liabilities $ (15,683) $ —  $ (15,683)
Total financial liabilities $ (15,683) $ —  $ (15,683)
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(1) Excludes cash of $287.6 million held in operating accounts and time deposits of $932.4 million (of which $66.2 million were cash equivalents) as of June 30, 2024.