Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 29, 2013

Fair Value of Financial Instruments

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

The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value.

	Fair Value Measurements at June 29, 2013 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
Money market funds	$	119,064	$	—	$	—	$	119,064
Commercial paper	—		1,000		—		1,000
Certificates of deposit	—		5,550		—		5,550
Total cash equivalents	$	119,064	$	6,550	$	—	$	125,614
Short-term Investments:
Municipal bonds	$	—	$	79,355	$	—	$	79,355
Variable-rate demand notes	—		56,007		—		56,007
Corporate bonds	—		13,077		—		13,077
Certificates of deposit	—		1,858		—		1,858
International government bonds	—		1,126		—		1,126
Total short-term investments	$	—	$	151,423	$	—	$	151,423
Long-term Investments:
Auction rate securities	$	—	$	—	$	10,197	$	10,197
Total long-term investments	$	—	$	—	$	10,197	$	10,197
Other assets, net:
Derivative instruments	$	—	$	808	$	—	$	808
Total	$	—	$	808	$	—	$	808
Total	$	119,064	$	158,781	$	10,197	$	288,042

	Fair Value Measurements at December 29, 2012 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
U.S. Treasury bills	$	25,050	$	—	$	—	$	25,050
Money market funds	22,686		—		—		22,686
Municipal bonds	—		1,000		—		1,000
Total cash equivalents	$	47,736	$	1,000	$	—	$	48,736
Short-term Investments:
Corporate bonds	$	—	$	59,351	$	—	$	59,351
Municipal bonds	—		45,689		—		45,689
Variable-rate demand notes	—		41,785		—		41,785
Asset-backed securities	—		15,069		—		15,069
U.S. government bonds	12,663		—		—		12,663
International government bonds	—		2,008		—		2,008
Total short-term investments	$	12,663	$	163,902	$	—	$	176,565
Long-term Investments:
Auction rate securities	$	—	$	—	$	11,369	$	11,369
Total long-term investments	$	—	$	—	$	11,369	$	11,369
Total	$	60,399	$	164,902	$	11,369	$	236,670
Liabilities:
Derivative instruments	$	—	$	658	$	—	$	658
Contingent consideration	—		—		2,750		2,750
Total	$	—	$	658	$	2,750	$	3,408

Summary of quantitative information about level 3 asset fair value measurements

Fair Value at June 29, 2013 (000s)		Valuation Technique	Unobservable Input	Weighted Average
$	10,197	Discounted cash flow	Estimated yield	1.09	%
			Expected holding period	10 years
			Estimated discount rate	3.71	%

Summary of activity in Level 3 financial instruments

The following summarizes the activity in Level 3 financial instruments for the three and six months ended June 29, 2013 (in thousands):

Assets

Auction Rate Securities	Three Months Ended			Six Months Ended
Beginning balance	$	11,189		$	11,369
Settlements	(25		)	(100		)
Losses included in other comprehensive income	(967		)	(1,072		)
Balance at June 29, 2013	$	10,197		$	10,197

Liabilities

Contingent Consideration (1)	Three Months Ended		Six Months Ended
Beginning balance	$	—	$	2,750
Gain recognized in earnings (2)	—		(2,750		)
Balance at June 29, 2013	$	—	$	—

(1) In connection with the acquisition of Ember, the Company recorded contingent consideration based upon the expected achievement of a milestone goal. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the discounted cash flow model are recorded in selling, general and administrative expenses in the Consolidated Statement of Income.

(2) The Company reduced the estimated fair value of contingent consideration because the milestone goal was not achieved.