Investments and Fair Value Measurements

6 Months Ended

Jul. 03, 2011

Investments and Fair Value Measurements [Abstract]

Investments and Fair Value Measurements

2. Investments and Fair Value Measurements

     Financial assets and liabilities measured at fair value on a recurring basis as of July 3, 2011 were as follows:

			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Money market funds	$	580,665	$	580,665	$	—	$	—
Fixed income securities		4,353,632		32,804		4,320,828		—
Equity securities		82,529		82,529		—		—
Derivative assets		12,758		—		12,758		—
Other		4,165		—		4,165		—
Total financial assets	$	5,033,749	$	695,998	$	4,337,751	$	—
Derivative liabilities	$	50,979	$	—	$	50,979	$	—
Total financial liabilities	$	50,979	$	—	$	50,979	$	—

     Financial assets and liabilities measured at fair value on a recurring basis as of January 2, 2011 were as follows:

			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Money market funds	$	587,973	$	587,973	$	—	$	—
Fixed income securities		4,448,837		30,803		4,418,034		—
Equity securities		90,425		90,425		—		—
Derivative assets		19,462		—		19,462		—
Other		4,379		—		4,379		—
Total financial assets	$	5,151,076	$	709,201	$	4,441,875	$	—
Derivative liabilities	$	76,762	$	—	$	76,762	$	—
Total financial liabilities	$	76,762	$	—	$	76,762	$	—

     Financial assets and liabilities measured at fair value on a recurring basis as of July 3, 2011, were presented on the Condensed Consolidated Balance Sheets as follows:

			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Cash equivalents(1)	$	713,140	$	584,065	$	129,075	$	—
Short-term marketable securities		1,719,354		102,821		1,616,533		—
Long-term marketable securities		2,584,332		9,112		2,575,220		—
Other current assets and other non-current assets		16,923		—		16,923		—
Total assets	$	5,033,749	$	695,998	$	4,337,751	$	—
Other current accrued liabilities	$	48,626	$	—	$	48,626	$	—
Non-current liabilities		2,353		—		2,353		—
Total liabilities	$	50,979	$	—	$	50,979	$	—

⁽¹⁾ Cash equivalents exclude cash of $261.7 million included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets as of July 3, 2011.

     Financial assets and liabilities measured at fair value on a recurring basis as of January 2, 2011, were presented on the Condensed Consolidated Balance Sheets as follows:

			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
Cash equivalents(1)	$	613,698	$	587,973	$	25,725	$	—
Short-term marketable securities		2,018,565		112,906		1,905,659		—
Long-term marketable securities		2,494,972		8,322		2,486,650		—
Other current assets and other non-current assets		23,841		—		23,841		—
Total assets	$	5,151,076	$	709,201	$	4,441,875	$	—
Other current accrued liabilities	$	33,606	$	—	$	33,606	$	—
Non-current liabilities		43,156		—		43,156		—
Total liabilities	$	76,762	$	—	$	76,762	$	—

⁽¹⁾ Cash equivalents exclude cash of $215.5 million included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets as of January 2, 2011.

     As of July 3, 2011 and January 2, 2011, the Company had no financial assets or liabilities categorized as Level 3.

     As of July 3, 2011, the Company had not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

     Available-for-Sale Investments. Available-for-sale investments as of July 3, 2011 were as follows:

			Gross		Gross
	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value
			(In thousands)
Fixed income securities:
U.S. Treasury and government agency securities	$	36,871	$	34	$	(4	)	$	36,901
U.S. government-sponsored agency securities		22,676		8		(16	)		22,668
Corporate notes and bonds		840,916		3,612		(284	)		844,244
Asset-backed securities		55,527		26		(71	)		55,482
Mortgage-backed securities		5,732		42		—			5,774
Municipal notes and bonds		3,372,973		17,535		(1,945	)		3,388,563
		4,334,695		21,257		(2,320	)		4,353,632
Equity investments		68,164		14,365		—			82,529
Total available-for-sale investments	$	4,402,859	$	35,622	$	(2,320	)	$	4,436,161

     Available-for-sale investments as of January 2, 2011 were as follows:

			Gross		Gross
	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value
	(In thousands)
Fixed income securities:
U.S. Treasury and government agency securities	$	36,015	$	53	$	(33	)	$	36,035
U.S. government-sponsored agency securities		24,336		85		—			24,421
Corporate notes and bonds		401,182		2,689		(196	)		403,675
Asset-backed securities		10,069		45		(5	)		10,109
Mortgage-backed securities		6,500		35		—			6,535
Municipal notes and bonds		3,972,268		9,435		(13,641	)		3,968,062
		4,450,370		12,342		(13,875	)		4,448,837
Equity investments		68,525		21,900		—			90,425
Total available-for-sale investments	$	4,518,895	$	34,242	$	(13,875	)	$	4,539,262

     The fair value and gross unrealized losses on the available-for-sale securities that have been in an unrealized loss position, aggregated by type of investment instrument, and the length of time that individual securities have been in a continuous unrealized loss position as of July 3, 2011, are summarized in the following table. Available-for-sale securities that were in an unrealized gain position have been excluded from the table.

	Less than 12 months					Greater than 12 months
			Gross					Gross
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(In thousands)
U.S. Treasury and government agency securities	$	13,544	$	(4	)	$	—	$	—
U.S. government-sponsored agency securities		20,119		(16	)		—		—
Corporate notes and bonds		133,947		(284	)		—		—
Asset-backed securities		40,102		(71	)		—		—
Municipal notes and bonds		507,848		(1,945	)		—		—
Total	$	715,560	$	(2,320	)	$	—	$	—

     Gross unrealized gains and losses related to publicly-traded equity investments are due to changes in market prices. The Company has cash flow hedges designated to substantially mitigate risks of both gains and losses from certain of these equity investments, as discussed in Note 3, “Derivatives and Hedging Activities.” The gross unrealized loss related to U.S. Treasury and government agency securities, corporate and municipal notes and bonds and asset-backed securities was primarily due to changes in interest rates. The gross unrealized loss on all available-for-sale fixed income securities at July 3, 2011 was considered temporary in nature. Factors considered in determining whether a loss is temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold an investment for a period of time sufficient to allow for any anticipated recovery in market value. For debt security investments, the Company considered additional factors including the Company’s intent to sell the investments or whether it is more likely than not the Company will be required to sell the investments before the recovery of its amortized cost.

     The following table shows the gross realized gains and (losses) on sales of available-for-sale securities for the three and six months ended July 3, 2011 and July 4, 2010.

	Three months ended						Six months ended
	July 3, 2011			July 4, 2010			July 3, 2011			July 4, 2010
	(In thousands)
Gross realized gains	$	2,589		$	8,718		$	5,614		$	11,707
Gross realized (losses)		(79	)		(296	)		(210	)		(302	)

     Fixed income securities by contractual maturity as of July 3, 2011 are shown below. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to prepay obligations.

	Amortized		Fair
	Cost		Value
	(In thousands)
Due in one year or less	$	1,766,004	$	1,769,300
Due after one year through five years		2,568,691		2,584,332
Total	$	4,334,695	$	4,353,632

     For certain of the Company’s financial instruments, including accounts receivable, short-term marketable securities and accounts payable, the carrying amounts approximate fair value due to their short maturities. For those financial instruments where the carrying amounts differ from fair value, the following table presents the related carrying values and the fair values, which are based on quoted market prices as of July 3, 2011 and January 2, 2011.

	July 3, 2011				January 2, 2011
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
	(In thousands)
1% Sr. Convertible Notes due 2013	$	1,024,073	$	1,110,475	$	993,199	$	1,118,375
1.5% Sr. Convertible Notes due 2017		735,144		1,085,050		717,833		1,132,500
Total	$	1,759,217	$	2,195,525	$	1,711,032	$	2,250,875