Sandisk CorpSNDK

Sandisk Corp Fair Value Disclosure

10-KFiled Aug 21, 20253 min read
Fair Value Measurements and Investments
Financial Instruments Carried at Fair Value
Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels:
Level 1.    Quoted prices in active markets for identical assets or liabilities.
Level 2.    Inputs other than Level 1 that are observable, either directly or indirectly, such as 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 market data for substantially the full term of the assets or liabilities.
Level 3.    Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.
The following tables present information about the Company’s financial instruments that were measured at fair value on a recurring basis for the periods presented and indicate the fair value hierarchy of the valuation techniques utilized to determine such values:
June 27, 2025
Level 1Level 2Level 3Total
(in millions)
Assets:
Cash equivalents - Money market funds$751 $— $— $751 
Foreign exchange contracts (included in Other current assets)— 17 — 17 
Total assets at fair value$751 $17 $— $768 
Liabilities:
Foreign exchange contracts (included in Accrued expenses)$— $22 $— $22 
Total liabilities at fair value$— $22 $— $22 
June 28, 2024
Level 1Level 2Level 3Total
(in millions)
Assets:
Cash equivalents - Money market funds$28 $— $— $28 
Foreign exchange contracts (included in Other current assets)— 7 — 7 
Total assets at fair value$28 $7 $— $35 
Liabilities:
Foreign exchange contracts (included in Accrued expenses)$— $179 $— $179 
Total liabilities at fair value$— $179 $— $179 
Money Market Funds. The Company’s money market funds are funds invested in U.S. Treasury and U.S. Government agency securities. Money market funds are valued based on quoted market prices.
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 valued using an income approach that is based on the present value of a future cash flows model. The market-based observable inputs for the model include forward rates and credit default swap rates. See Note 7, Derivative Instruments and Hedging Activities for additional disclosures.
During the periods presented, the Company had no transfers of financial instruments between levels, and there were no changes in valuation techniques or the inputs used in the fair value measurement.
Financial Instruments Not Carried at Fair value
Financial instruments not recorded at fair value on a recurring basis (debt) had an estimated fair value of $1.9 billion as of June 27, 2025. The fair value of the debt was determined based on observable market prices in less active markets. See Note 8, Debt for additional disclosures.

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&ELeasesSegmentsDebtNew Standards