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Fair Value Measurement
12 Months Ended
Dec. 29, 2013
Fair Value Disclosures [Abstract]  
Fair Value Disclosures
Fair Value Measurements

The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 29, 2013 and December 30, 2012, respectively (in thousands):
 
December 29, 2013
 
December 30, 2012
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds (cash equivalent)
$
478,755

 
$

 
$

 
$
478,755

 
$
252,126

 
$

 
$

 
$
252,126

Debt securities in government-sponsored entities

 
82,143

 

 
82,143

 

 
314,873

 

 
314,873

Corporate debt securities

 
341,970

 

 
341,970

 

 
472,861

 

 
472,861

U.S. Treasury securities
29,853

 

 

 
29,853

 
128,489

 

 

 
128,489

Deferred compensation plan assets

 
17,805

 

 
17,805

 

 
13,626

 

 
13,626

Total assets measured at fair value
$
508,608

 
$
441,918

 
$

 
$
950,526

 
$
380,615

 
$
801,360

 
$

 
$
1,181,975

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition related contingent consideration liabilities
$

 
$

 
$
49,480

 
$
49,480

 
$

 
$

 
$
12,519

 
$
12,519

Deferred compensation liability

 
14,957

 

 
14,957

 

 
12,071

 

 
12,071

Total liabilities measured at fair value
$

 
$
14,957

 
$
49,480

 
$
64,437

 
$

 
$
12,071

 
$
12,519

 
$
24,590



The Company holds available-for-sale securities that consist of highly liquid, investment grade debt securities. The Company determines the fair value of its debt securities based upon one or more valuations reported by its investment accounting and reporting service provider.  The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service.  Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. The Company’s deferred compensation plan assets consist primarily of mutual funds. The Company performs certain procedures to corroborate the fair value of its holdings, including comparing valuations obtained from its investment service provider to valuations reported by the Company’s asset custodians.

The Company reassesses the fair value of contingent consideration to be settled in cash related to acquisitions on a quarterly basis using the income approach. This is a Level 3 measurement. Significant assumptions used in the measurement include probabilities of achieving the remaining milestones and the discount rates, which depend on the milestone risk profiles. The changes in fair value of the contingent considerations during the years ended December 29, 2013, December 30, 2012, and January 1, 2012 were due to changes in the estimated payments and a shorter discounting period.

Changes in estimated fair value of contingent consideration liabilities from January 2, 2011 through December 29, 2013 are as follows (in thousands):
 
 
Contingent
Consideration
Liability
(Level 3 Measurement) 
 
Balance as of January 2, 2011
$
3,738

Acquisition of Epicentre
7,400

Change in estimated fair value, recorded in acquisition related (gain) expense, net
(4,500
)
Balance as of January 1, 2012
6,638

Acquisition of BlueGnome
7,500

Change in estimated fair value, recorded in acquisition related (gain) expense, net
1,975

Cash payments
(3,594
)
Balance as of December 30, 2012
12,519

Additional liability recorded for current period acquisitions
60,184

Change in estimated fair value, recorded in acquisition related (gain) expense, net
(18,784
)
Cash payments
(4,439
)
Balance as of December 29, 2013
$
49,480