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Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 29, 2014

Schedule of Available-for-sale Securities

Cash and Cash Equivalents and Marketable Securities

The Company’s total cash, cash equivalents and marketable securities was as follows (in thousands):



	June 29, 2014		December 29, 2013
Cash and cash equivalents	$	885,115	$	986,246
Short-term marketable securities	1,794,356		1,919,611
Long-term marketable securities	3,569,453		3,179,471
Total cash, cash equivalents and marketable securities	$	6,248,924	$	6,085,328

Financial assets and liabilities measured at fair value on a recurring basis

Financial assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following types of instruments (in thousands):



	June 29, 2014								December 29, 2013
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	698,068	$	—	$	—	$	698,068	$	760,363	$	—	$	—	$	760,363
Fixed income securities	128,621		5,259,536		—		5,388,157		160,194		4,985,059		—		5,145,253
Derivative assets	—		1,740		—		1,740		—		777		—		777
Total financial assets	$	826,689	$	5,261,276	$	—	$	6,087,965	$	920,557	$	4,985,836	$	—	$	5,906,393

Derivative liabilities	$	—	$	7,358	$	—	$	7,358	$	—	$	45,859	$	—	$	45,859
Total financial liabilities	$	—	$	7,358	$	—	$	7,358	$	—	$	45,859	$	—	$	45,859

Financial assets and liabilities measured at fair value on a recurring basis

Financial assets and liabilities measured and recorded at fair value on a recurring basis were presented on the Company’s Condensed Consolidated Balance Sheets as follows (in thousands):



	June 29, 2014								December 29, 2013
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents⁽¹⁾	$	703,084	$	19,332	$	—	$	722,416	$	773,435	$	33,099	$	—	$	806,534
Short-term marketable securities	7,005		1,787,351		—		1,794,356		15,090		1,904,521		—		1,919,611
Long-term marketable securities	116,600		3,452,853		—		3,569,453		132,032		3,047,439		—		3,179,471
Other current assets	—		1,740		—		1,740		—		777		—		777
Total financial assets	$	826,689	$	5,261,276	$	—	$	6,087,965	$	920,557	$	4,985,836	$	—	$	5,906,393
Other current accrued liabilities	$	—	$	7,358	$	—	$	7,358	$	—	$	45,741	$	—	$	45,741
Non-current liabilities	—		—		—		—		—		118		—		118
Total financial liabilities	$	—	$	7,358	$	—	$	7,358	$	—	$	45,859	$	—	$	45,859


⁽¹⁾	Cash equivalents exclude cash holdings of $162.7 million and $179.7 million included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets as of June 29, 2014 and December 29, 2013, respectively.

Available for Sale Investments

Available-for-sale investments were as follows (in thousands):



	June 29, 2014									December 29, 2013
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
U.S. Treasury securities	$	128,594	$	91	$	(64	)	$	128,621	$	160,598	$	21	$	(424	)	$	160,195
U.S. government-sponsored agency securities	11,030		—		(12		)	11,018		8,112		10		(1		)	8,121
International government securities	57,343		30		(56		)	57,317		38,492		1		(224		)	38,269
Corporate notes and bonds	936,927		1,677		(316		)	938,288		864,331		1,504		(1,565		)	864,270
Asset-backed securities	218,261		210		(41		)	218,430		226,620		114		(170		)	226,564
Mortgage-backed securities	86,448		66		(160		)	86,354		86,542		18		(554		)	86,006
Municipal notes and bonds	3,928,741		19,655		(267		)	3,948,129		3,744,138		18,931		(1,241		)	3,761,828
Total available-for-sale investments	$	5,367,344	$	21,729	$	(916	)	$	5,388,157	$	5,128,833	$	20,599	$	(4,179	)	$	5,145,253

Available-for-sale securities that were in an unrealized gain position

The fair value and gross unrealized losses on the available-for-sale securities that have been in a continuous 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 June 29, 2014, are summarized in the following table (in thousands). 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
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
U.S. Treasury securities	$	98,301	$	(64	)	$	—	$	—
U.S. government-sponsored agency securities	10,715		(12		)	—		—
International government securities	32,175		(56		)	—		—
Corporate notes and bonds	262,842		(316		)	—		—
Asset-backed securities	39,162		(41		)	—		—
Mortgage-backed securities	38,774		(156		)	264		(4		)
Municipal notes and bonds	212,489		(267		)	—		—
Total	$	694,458	$	(912	)	$	264	$	(4	)

Gross realized gains and (losses) on sales of available-for-sale securities

The following table shows the realized gains and (losses) on sales of available-for-sale securities (in thousands).



	Three months ended						Six months ended
	June 29, 2014			June 30, 2013			June 29, 2014			June 30, 2013
Realized gains	$	3,697		$	967		$	4,710		$	1,685
Realized losses	(284		)	(102		)	(727		)	(1,134		)
Net realized gains (losses)	$	3,413		$	865		$	3,983		$	551

Fixed income securities by contractual maturity

Fixed income securities by contractual maturity as of June 29, 2014 are shown below (in thousands). Actual maturities may differ from contractual maturities because issuers of the securities may have the right to prepay obligations or the Company has the option to demand payment.



	Amortized Cost		Fair Value
Due in one year or less	$	1,044,738	$	1,047,537
After one year through five years	3,376,891		3,393,204
After five years through ten years	169,014		169,190
After ten years	776,701		778,226
Total	$	5,367,344	$	5,388,157

For those financial instruments where the carrying amounts differ from fair value, the following table represents the related carrying values and fair values, which are based on quoted market prices (in thousands). The 1.5% Convertible Senior Notes due 2017 were categorized as Level 1 and the 0.5% Convertible Senior Notes due 2020 were categorized as Level 2 due to a lack of frequent trading as of both June 29, 2014 and December 29, 2013. See Note 6, “Financing Arrangements,” regarding details of each convertible note presented.



	June 29, 2014				December 29, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
1.5% Convertible Senior Notes due 2017	$	850,874	$	2,000,000	$	829,792	$	1,467,160
0.5% Convertible Senior Notes due 2020	1,177,273		1,865,805		1,155,571		1,480,290
Total	$	2,028,147	$	3,865,805	$	1,985,363	$	2,947,450

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References+ Details