Yahoo 2008 Annual Report Download - page 94

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
The following table sets forth the financial assets, measured at fair value, by level within the fair value hierarchy
as of December 31, 2008 (in thousands):
Fair Value Measurements at Reporting Date Using
Assets Level 1 Level 2 Total
Money market funds(1) .................................... $1,024,633 $ — $1,024,633
Available-for-sale securities:
U.S. Government and agency securities(1) ................. — 1,274,388 1,274,388
Municipal bonds(1) ................................... — 52,816 52,816
Asset-backed securities(1) .............................. — 8,933 8,933
Commercial paper(1) .................................. — 460,933 460,933
Corporate debt securities(1) ............................ — 116,811 116,811
Corporate equity securities(2) ........................... 86,629 — 86,629
Total assets at fair value .......................... $1,111,262 $1,913,881 $3,025,143
(1) The money market funds, U.S. Government and agency securities, municipal bonds, asset-backed securities,
commercial paper, and corporate debt securities are classified as part of either cash and cash equivalents or
investments in marketable debt securities in the consolidated balance sheet.
(2) The corporate equity securities are classified as part of the other long-term assets in the consolidated balance
sheet.
The amount of cash and cash equivalents as of December 31, 2008 includes $583 million in cash deposited with
commercial banks.
The fair value of the Company’s Level 1 financial assets are based on quoted market prices of the identical
underlying security. The fair value of the Company’s Level 2 financial assets are obtained from readily-available
pricing sources for the identical underlying security that may not be actively traded. As of December 31, 2008,
the Company did not have any material Level 3 financial assets or liabilities.
Note 9 D
EBT
In April 2003, the Company issued $750 million of zero coupon senior convertible notes (the “Notes”) due
April 1, 2008, resulting in net proceeds to the Company of approximately $733 million after transaction fees of
$17 million, which were deferred and were included on the consolidated balance sheets in prepaid expenses and
other current assets. The Notes were issued at par and did not bear interest. The Notes were convertible into
Yahoo! common stock at a conversion price of $20.50 per share. Each $1,000 principal amount of the Notes were
convertible into 48.78 shares of Yahoo! common stock.
The Notes were convertible prior to the final maturity date (1) during any fiscal quarter if the closing sale price of
the Company’s common stock for at least 20 trading days in the 30 trading-day period ending on the last trading
day of the immediately preceding fiscal quarter exceeded 110 percent of the conversion price on that 30th trading
day, (2) during the period beginning January 1, 2008 through the maturity date, if the closing sale price of the
Company’s common stock on the previous trading day was 110 percent or more of the then current conversion
price and (3) upon specified corporate transactions. Upon conversion, the Company had the right to deliver cash
in lieu of common stock.
During the year ended December 31, 2008, $750 million of the Notes were converted into 36.6 million shares of
Yahoo! common stock. As of December 31, 2007, the Notes were classified as short-term debt, because if
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