Yahoo 2013 Annual Report Download - page 95

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The amount of cash and cash equivalents as of December 31, 2012 and 2013 includes $597 million and $569
million, respectively, in cash deposits.
The fair values of the Company’s Level 1 financial assets and liabilities are based on quoted market prices of the
identical underlying security. The fair values of the Company’s Level 2 financial assets and liabilities are
obtained using quoted prices for similar assets or liabilities in active markets; quoted prices for identical or
similar assets in markets that are not active; and inputs other than quoted prices, e.g., interest rates and yield
curves. The Company utilizes a pricing service to assist in obtaining fair value pricing for the majority of this
investment portfolio. The Company classified its investment in the Alibaba Group Preference Shares within
Level 3 because it was valued using significant unobservable inputs. To estimate the fair value as of
December 31, 2012, the Company performed benchmarking by comparing the terms and conditions of the
Alibaba Group Preference Shares to dividend rates, subordination terms, and credit ratings of those of similar
type instruments. The Company conducts reviews on a quarterly basis to verify pricing, assess liquidity, and to
determine if significant inputs have changed that would impact the fair value hierarchy disclosure.
Convertible Senior Notes
In 2013, the Company issued $1.4375 billion aggregate principal amount of 0.00% Convertible Senior Notes due
2018 (the “Notes”). The Notes are carried at their original issuance value, net of unamortized debt discount, and
are not marked to market each period. The approximate fair value of the Notes as of December 31, 2013 was $1.1
billion. The fair value of the Notes was estimated on the basis of quoted market prices observable in the market
and is considered Level 2 in the fair value hierarchy. See Note 11—“Convertible Notes” for additional
information related to the Notes.
Goodwill
The inputs used to measure the estimated fair value of goodwill are classified as a Level 3 fair value
measurement due to the significance of unobservable inputs using company-specific information. The valuation
methodology used to estimate the fair value of goodwill is discussed in Note 1—“Goodwill”.
Activity between Levels of the Fair Value Hierarchy
During the years ended December 31, 2012 and 2013, the Company did not make any transfers between Level 1,
Level 2, or Level 3 assets or liabilities.
Note 3 C
ONSOLIDATED
F
INANCIAL
S
TATEMENT
D
ETAILS
Prepaid Expenses and Other Current Assets
As of December 31, prepaid expenses and other current assets consisted of the following (in thousands):
2012 2013
Prepaid expenses .......................................................... $ 74,268 $103,100
Deferred income taxes ...................................................... 249,936 218,486
Foreign currency forward contract assets ....................................... 5,008 214,041
Other receivables non-trade ................................................. 36,740 37,404
Other ................................................................... 94,360 65,373
Total prepaid expenses and other current assets .............................. $460,312 $638,404
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