Fair Value Measurement

9 Months Ended

Dec. 28, 2014

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 28, 2014:



	Fair Value at Reporting Date Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash Equivalents and Short-Term Investments:
US government treasuries and agencies securities	$	118,987	$	—	$	—	$	118,987
Money market funds	62,968		—		—		62,968
Asset-backed securities	—		26,076		—		26,076
Corporate bonds	—		208,327		—		208,327
International government bonds	—		1,001		—		1,001
Corporate commercial paper	—		11,394		—		11,394
Bank deposits	—		13,667		—		13,667
Repurchase agreement	—		194		—		194
Municipal bonds	—		7,014		—		7,014
Total assets measured at fair value	$	181,955	$	267,673	$	—	$	449,628

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 30, 2014:



	Fair Value at Reporting Date Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash Equivalents and Short-Term Investments:
US government treasuries and agencies securities	$	112,253	$	—	$	—	$	112,253
Money market funds	53,430		—		—		53,430
Asset-backed securities	—		22,332		—		22,332
Corporate bonds	—		199,806		—		199,806
International government bonds	—		3,014		—		3,014
Corporate commercial paper	—		6,246		—		6,246
Bank deposits	—		18,538		—		18,538
Repurchase agreements	—		46		—		46
Municipal bonds	—		9,210		—		9,210
Total assets measured at fair value	$	165,683	$	259,192	$	—	$	424,875
Liabilities:
Fair value of contingent consideration	—		—		2,140		2,140
Total liabilities measured at fair value	$	—	$	—	$	2,140	$	2,140

U.S. government treasuries and U.S. government agency securities as of December 28, 2014 and March 30, 2014 do not include any U.S. government guaranteed bank issued paper. Corporate bonds include bank-issued securities that are guaranteed by the Federal Deposit Insurance Corporation (FDIC).

The securities in Level 1 are highly liquid and actively traded in exchange markets or over-the-counter markets. Level 2 fixed income securities are priced using quoted market prices for similar instruments, non-binding market prices that are corroborated by observable market data.

In connection with the acquisition of Alvand Technologies in fiscal 2013, a liability was recognized for the Company’s estimate of the fair value of contingent consideration on the acquisition date based on probability-based forecasted revenues, gross profits and attainment of product development milestones. These fair value measurements are based on significant inputs not observed in the market and thus represent a Level 3 measurement, which reflect the Company’s own assumptions concerning future revenues, gross profit and product development milestones of the acquired businesses in measuring fair value.

The following table summarizes the change in the fair value of the contingent consideration measured using significant unobservable inputs (Level 3) for the nine months ended December 28, 2014:



(in thousands)	Estimated Fair Value
Balance as of March 30, 2014	$	2,140
Payment, net of fair value adjustments	(1,600		)
Release	(540		)
Balance as of December 28, 2014	$	—

During the first quarter of fiscal 2015, the Company paid $1.6 million and released the remaining contingent consideration of $0.5 million to discontinued operations, as the remaining future milestones were not achieved as a result of the sale of certain assets related to the Alvand portion of the HSC business.

All of the Company’s available-for-sale investments are subject to a periodic impairment review. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. The Company did not record any impairment charges related to its available-for-sale investments in the nine months ended December 28, 2014 and December 29, 2013.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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