Fair Value Measurements

The authoritative guidance for fair value measurements established by the FASB defines fair value as the exchange price that would be received from selling an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which Xilinx would transact and also considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance.

The Company determines the fair value for marketable debt securities using industry standard pricing services, data providers and other third-party sources and by internally performing valuation testing and analysis. The Company primarily uses a consensus price or weighted-average price for its fair value assessment. The Company determines the consensus price using market prices from a variety of industry standard pricing services, data providers, security master files from large financial institutions and other third party sources and uses those multiple prices as inputs into a distribution-curve-based algorithm to determine the daily market value. The pricing services use multiple inputs to determine market prices, including reportable trades, benchmark yield curves, credit spreads and broker/dealer quotes as well as other industry and economic events. For certain securities with short maturities, such as discount commercial paper and certificates of deposit, the security is accreted from purchase price to face value at maturity. If a subsequent transaction on the same security is observed in the marketplace, the price on the subsequent transaction is used as the current daily market price and the security will be accreted to face value based on the revised price.

The Company validates the consensus prices by taking random samples from each asset type and corroborating those prices using reported trade activity, benchmark yield curves, binding broker/dealer quotes or other relevant price information. There have not been any changes to the Company’s fair value methodology during the first quarter of fiscal 2019 and the Company did not adjust or override any fair value measurements as of June 30, 2018.

Fair Value Hierarchy

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. The guidance for fair value measurements requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.

The Company’s Level 1 assets consist of U.S. government securities, money market funds and marketable equity securities.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

The Company’s Level 2 assets consist of financial institution securities, non-financial institution securities, U.S. agency securities, foreign government and agency securities, mortgage-backed securities, debt mutual funds, asset-backed securities and commercial mortgage-backed securities. The Company’s Level 2 assets and liabilities also include foreign currency forward contracts and interest rate swap contracts.

Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

The Company has no Level 3 assets and liabilities measured at fair value on a recurring basis.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and March 31, 2018:



	June 30, 2018
(In thousands)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Cash equivalents:
Money market funds	$	458,706	$	—	$	—	$	458,706
Financial institution securities	—		349,850		—		349,850
Non-financial institution securities	—		350,624		—		350,624
U.S. government and agency securities	114,664		206,945		—		321,609
Foreign government and agency securities	—		130,622		—		130,622
Short-term investments:
Financial institution securities	—		249,982		—		249,982
Non-financial institution securities	—		263,922		—		263,922
U.S. government and agency securities	3,647		96,105		—		99,752
Foreign government and agency securities	—		43,783		—		43,783
Mortgage-backed securities	—		796,953		—		796,953
Asset-backed securities	—		89,028		—		89,028
Commercial mortgage-backed securities	—		143,389		—		143,389
Long-term investments:
Debt mutual funds	—		85,633		—		85,633
Marketable equity securities	6,067		—		—		6,067
Total assets measured at fair value	$	583,084	$	2,806,836	$	—	$	3,389,920
Liabilities
Derivative financial instruments, net	$	—	$	41,289	$	—	$	41,289
Total liabilities measured at fair value	$	—	$	41,289	$	—	$	41,289
Net assets measured at fair value	$	583,084	$	2,765,547	$	—	$	3,348,631



	March 31, 2018
(In thousands)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Cash equivalents:
Money market funds	$	1,291,891	$	—	$	—	$	1,291,891
Financial institution securities	—		359,901		—		359,901
Non-financial institution securities	—		242,904		—		242,904
U.S. government and agency securities	996		34,999		—		35,995
Foreign government and agency securities	—		179,957		—		179,957
Short-term investments:
Financial institution securities	—		75,000		—		75,000
Non-financial institution securities	—		81,939		—		81,939
U.S. government and agency securities	3,639		19,008		—		22,647
Mortgage-backed securities	—		844,397		—		844,397
Asset-backed securities	—		91,389		—		91,389
Commercial mortgage-backed securities	—		152,870		—		152,870
Long-term investments:
Debt mutual funds	—		89,670		—		89,670
Marketable equity securities	8,226				—		8,226
Total assets measured at fair value	$	1,304,752	$	2,172,034	$	—	$	3,476,786
Liabilities
Derivative financial instruments, net	$	—	$	26,091	$	—	$	26,091
Total liabilities measured at fair value	$	—	$	26,091	$	—	$	26,091
Net assets measured at fair value	$	1,304,752	$	2,145,943	$	—	$	3,450,695

For certain of the Company’s financial instruments, including cash held in banks, accounts receivable and accounts payable, the carrying amounts approximate fair value due to their short maturities, and are therefore excluded from the fair value tables above.

As of June 30, 2018 and July 1, 2017, the Company held no marketable securities measured at fair value using Level 3 inputs.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

The Company's $500.0 million principal amount of 2.125% notes due March 15, 2019 (2019 Notes), $500.0 million principal amount of 3.000% notes due March 15, 2021 (2021 Notes) and $750.0 million principal amount of 2.950% senior notes due June 1, 2024 (2024 Notes) are measured at fair value on a quarterly basis for disclosure purposes. The fair values of the 2019 Notes, 2021 Notes and 2024 Notes as of June 30, 2018 were approximately $498.0 million, $495.9 million and $713.4 million, respectively, based on the last trading price for the period (classified as Level 2 in fair value hierarchy due to relatively low trading volume).

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

As of June 30, 2018, the Company had non-marketable equity securities in private companies of $49.6 million, which were classified as Level 3 assets. The Company’s investments in non-marketable securities of private companies, together with its non-financial assets such as property, plant and equipment, goodwill and acquisition-related intangibles, are recorded at fair value only if the Company recognizes an impairment or an observable price adjustment. Such impairment losses or observable price adjustments were not material during all periods presented.