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Investments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 28, 2014

Schedule of Available-for-sale Securities

Cash and Cash Equivalents and Marketable Securities

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



	September 28, 2014		December 29, 2013
Cash and cash equivalents	$	930,835	$	986,246
Short-term marketable securities	1,370,257		1,919,611
Long-term marketable securities	2,843,933		3,179,471
Total cash, cash equivalents and marketable securities	$	5,145,025	$	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):



	September 28, 2014								December 29, 2013
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	720,906	$	—	$	—	$	720,906	$	760,363	$	—	$	—	$	760,363
Fixed income securities	16,688		4,214,333		—		4,231,021		160,194		4,985,059		—		5,145,253
Derivative assets	—		2,254		—		2,254		—		777		—		777
Total financial assets	$	737,594	$	4,216,587	$	—	$	4,954,181	$	920,557	$	4,985,836	$	—	$	5,906,393

Derivative liabilities	$	—	$	24,031	$	—	$	24,031	$	—	$	45,859	$	—	$	45,859
Total financial liabilities	$	—	$	24,031	$	—	$	24,031	$	—	$	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):



	September 28, 2014								December 29, 2013
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents⁽¹⁾	$	720,906	$	16,831	$	—	$	737,737	$	773,435	$	33,099	$	—	$	806,534
Short-term marketable securities	4,915		1,365,342		—		1,370,257		15,090		1,904,521		—		1,919,611
Long-term marketable securities	11,773		2,832,160		—		2,843,933		132,032		3,047,439		—		3,179,471
Other current assets	—		2,254		—		2,254		—		777		—		777
Total financial assets	$	737,594	$	4,216,587	$	—	$	4,954,181	$	920,557	$	4,985,836	$	—	$	5,906,393
Other current accrued liabilities	$	—	$	24,031	$	—	$	24,031	$	—	$	45,741	$	—	$	45,741
Non-current liabilities	—		—		—		—		—		118		—		118
Total financial liabilities	$	—	$	24,031	$	—	$	24,031	$	—	$	45,859	$	—	$	45,859


⁽¹⁾	Cash equivalents exclude cash holdings of $193.1 million and $179.7 million included in Cash and cash equivalents on the Company’s Condensed Consolidated Balance Sheets as of September 28, 2014 and December 29, 2013, respectively.

Available for Sale Investments

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



	September 28, 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	$	16,706	$	2	$	(21	)	$	16,687	$	160,598	$	21	$	(424	)	$	160,195
U.S. government-sponsored agency securities	18,912		—		(13		)	18,899		8,112		10		(1		)	8,121
International government securities	79,582		13		(202		)	79,393		38,492		1		(224		)	38,269
Corporate notes and bonds	766,419		860		(820		)	766,459		864,331		1,504		(1,565		)	864,270
Asset-backed securities	168,190		51		(277		)	167,964		226,620		114		(170		)	226,564
Mortgage-backed securities	51,831		24		(138		)	51,717		86,542		18		(554		)	86,006
Municipal notes and bonds	3,115,376		14,791		(265		)	3,129,902		3,744,138		18,931		(1,241		)	3,761,828
Total available-for-sale investments	$	4,217,016	$	15,741	$	(1,736	)	$	4,231,021	$	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 September 28, 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	$	5,756	$	(21	)	$	—	$	—
U.S. government-sponsored agency securities	8,902		(13		)	—		—
International government securities	57,285		(202		)	—		—
Corporate notes and bonds	397,241		(820		)	1,027		—
Asset-backed securities	100,795		(277		)	—		—
Mortgage-backed securities	32,892		(135		)	227		(3		)
Municipal notes and bonds	225,140		(265		)	—		—
Total	$	828,011	$	(1,733	)	$	1,254	$	(3	)

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						Nine months ended
	September 28, 2014			September 29, 2013			September 28, 2014			September 29, 2013
Realized gains	$	3,388		$	2,184		$	8,098		$	3,869
Realized losses	(460		)	(1,105		)	(1,187		)	(2,239		)
Net realized gains (losses)	$	2,928		$	1,079		$	6,911		$	1,630

Fixed income securities by contractual maturity

Fixed income securities by contractual maturity as of September 28, 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	$	777,581	$	779,489
After one year through five years	2,692,208		2,702,665
After five years through ten years	121,207		121,216
After ten years	626,020		627,651
Total	$	4,217,016	$	4,231,021

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 September 28, 2014 and December 29, 2013. See Note 6, “Financing Arrangements,” regarding details of each convertible note presented.



	September 28, 2014				December 29, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
1.5% Convertible Senior Notes due 2017	$	861,628	$	1,947,660	$	829,792	$	1,467,160
0.5% Convertible Senior Notes due 2020	1,188,356		1,813,590		1,155,571		1,480,290
Total	$	2,049,984	$	3,761,250	$	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