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Fair Value Measurements
12 Months Ended
Jan. 01, 2012
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
 
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments, marketable securities and accounts receivable. The Company believes it had no significant concentrations of credit risk as of January 1, 2012.
 
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during fiscal years 2011 and 2010. The Company’s financial assets and liabilities carried at fair value are primarily comprised of marketable securities, derivative contracts used to hedge the Company’s currency risk, and acquisition related contingent consideration. The Company has not elected to measure any additional financial instruments or other items at fair value.
 
Valuation Hierarchy: The following summarizes the three levels of inputs required by the guidance to measure fair value. For Level 1 inputs, the Company utilizes quoted market prices as these instruments have active markets. For Level 2 inputs, the Company utilizes quoted market prices in markets that are not active, broker or dealer quotations, or utilizes alternative pricing sources with reasonable levels of price transparency. For Level 3 inputs, the Company utilizes unobservable inputs based on the best information available, including estimates by management primarily based on information provided by third-party fund managers, independent brokerage firms and insurance companies. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
 
The following tables show the assets and liabilities carried at fair value measured on a recurring basis as of January 1, 2012 and January 2, 2011 classified in one of the three classifications described above:
 
 
Fair Value Measurements at January 1, 2012 Using:
 
Total Carrying
Value at
January 1,
2012
 
Quoted Prices in
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
 
(In thousands)
Marketable securities
$
1,105

 
$
1,105

 
$

 
$

Foreign exchange derivative liabilities, net
(213
)
 

 
(213
)
 

Contingent consideration
(20,298
)
 

 

 
(20,298
)

 
Fair Value Measurements at January 2, 2011 Using:
 
Total Carrying
Value at
January 2,
2011
 
Quoted Prices in
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
 
(In thousands)
Marketable securities
$
1,178

 
$
1,178

 
$

 
$

Foreign exchange derivative liabilities, net
(84
)
 

 
(84
)
 

Contingent consideration
(1,731
)
 

 

 
(1,731
)

 
Valuation Techniques: The Company’s Level 1 and Level 2 assets and liabilities are comprised of investments in equity and fixed-income securities as well as derivative contracts. For financial assets and liabilities that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including common stock price quotes, foreign exchange forward prices, and bank price quotes. Below is a summary of valuation techniques for Level 1 and Level 2 financial assets and liabilities.
 
Marketable securities
  
Include equity and fixed-income securities measured at fair value using the quoted market prices at the reporting date.
Foreign exchange
derivative assets and liabilities
  
Include foreign exchange derivative contracts that are valued using quoted forward foreign exchange prices at the reporting date.
 
The Company has classified its net liabilities for contingent consideration relating to its acquisitions of chemagen, ArtusLabs, IDB, Dexela and Sym-Bio LifeScience Co., Ltd. within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs, which included probability weighted cash flows. A description of these acquisitions is included in Note 2. A reconciliation of the beginning and ending Level 3 net liabilities is as follows:
 
 
(In thousands)
Balance at December 28, 2008
$

Acquisitions
(4,437
)
Payments

Change in fair value (included within selling, general and administrative expenses)
186

Balance at January 3, 2010
(4,251
)
Acquisitions

Payments
2,717

Change in fair value (included within selling, general and administrative expenses)
(197
)
Balance at January 2, 2011
(1,731
)
Acquisitions
(20,131
)
Payments
1,908

Change in fair value (included within selling, general and administrative expenses)
(344
)
Balance at January 1, 2012
$
(20,298
)

 
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these assets and liabilities.
 
The Company’s senior unsecured revolving credit facility, with a $700.0 million available limit, the Company’s 2015 Notes, with a face value of $150.0 million, and the Company’s 2021 Notes, with a face value of $500.0 million, had carrying values as of January 1, 2012 of $298.0 million, $150.0 million and $496.9 million, respectively. As of January 2, 2011 the Company’s senior unsecured revolving credit facility had an outstanding balance of $274.0 million, and the Company’s 2015 Notes had an outstanding balance $150.0 million.
 
The interest rate on the Company’s senior unsecured revolving credit facility is reset at least monthly to correspond to variable rates that reflect currently available terms and conditions for similar debt. The Company had no change in credit standing during fiscal year 2011. Consequently, the carrying value of the current year and prior year credit facilities approximate fair value. The fair values of the 2015 Notes and the 2021 Notes are estimated using market quotes from brokers or is based on current rates offered for similar debt. At January 1, 2012, the 2015 Notes had an aggregate carrying value of $150.0 million and a fair value of $165.7 million. At January 2, 2011, the 2015 Notes had an aggregate carrying value of $150.0 million and a fair value of $166.8 million. At January 1, 2012, the 2021 Notes had an aggregate carrying value of $496.9 million, net of $3.1 million of unamortized original issue discount, and a fair value of $518.3 million.

As of January 1, 2012, there has not been any significant impact to the fair value of the Company’s derivative liabilities due to credit risk. Similarly, there has not been any significant adverse impact to the Company’s derivative assets based on the evaluation of its counterparties’ credit risks.