Fair Value Measurements

6 Months Ended

Jun. 01, 2012

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

We measure certain financial assets and liabilities at fair value on a recurring basis. There have been no transfers between fair value measurement levels during the six months ended June 1, 2012.

The fair value of our financial assets and liabilities at June 1, 2012 was determined using the following inputs (in thousands):

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:
Corporate bonds and commercial paper	$	20,497	$	—	$	20,497	$	—
Money market mutual funds and repurchase     agreements	570,920		570,920		—		—
Municipal securities	751		—		751		—
Time deposits	53,818		53,818		—		—
U.S. Treasury securities	9,608		—		9,608		—
Short-term investments:
Corporate bonds and commercial paper	1,020,826		—		1,020,826		—
Foreign government securities	6,772		—		6,772		—
Marketable equity securities	252		252		—		—
Municipal securities	121,114		—		121,114		—
U.S. agency securities	514,085		—		514,085		—
U.S. Treasury securities	383,830		—		383,830		—
Prepaid expenses and other current assets:
Foreign currency derivatives	42,533		—		42,533		—
Other assets:
Deferred compensation plan assets	13,328		364		12,964		—
Total assets	$	2,758,334	$	625,354	$	2,132,980	$	—

Liabilities:
Accrued expenses:
Foreign currency derivatives	$	7,044	$	—	$	7,044	$	—
Total liabilities	$	7,044	$	—	$	7,044	$	—

The fair value of our financial assets and liabilities at December 2, 2011 was determined using the following inputs (in thousands): 

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:
Corporate bonds and commercial paper	$	15,948	$	—	$	15,948	$	—
Money market mutual funds and repurchase     agreements	687,152		687,152		—		—
Time deposits	15,694		15,694		—		—
U.S. agency securities	2,500		—		2,500		—
U.S. Treasury securities	7,000		—		7,000		—
Short-term investments:
Corporate bonds and commercial paper	1,111,537		—		1,111,537		—
Foreign government securities	7,323		—		7,323		—
Marketable equity securities	12,267		12,267		—		—
Municipal securities	106,355		—		106,355		—
U.S. agency securities	375,893		—		375,893		—
U.S. Treasury securities	308,817		—		308,817		—
Prepaid expenses and other current assets:
Foreign currency derivatives	25,362		—		25,362		—
Other assets:
Deferred compensation plan assets	12,803		523		12,280		—
Total assets	$	2,688,651	$	715,636	$	1,973,015	$	—

Liabilities:
Accrued expenses:
Foreign currency derivatives	$	3,881	$	—	$	3,881	$	—
Total liabilities	$	3,881	$	—	$	3,881	$	—

See Note 3 for further information regarding the fair value of our financial instruments.

Our fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers with a minimum credit rating of BBB and a weighted average credit rating of AA-. We value these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from pricing models that use non-binding market consensus prices that are corroborated by observable market data or quoted prices for similar instruments. Our procedures include controls to ensure that appropriate fair values are recorded such as comparing prices obtained from multiple independent sources. 

Our deferred compensation plan assets consist of prime money market funds and mutual funds.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

We have direct investments in privately held companies accounted for under the cost method, which are periodically assessed for other-than-temporary impairment. If we determine that an other-than-temporary impairment has occurred, we write-down the investment to its fair value. We estimate fair value of our cost method investments considering available information such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. For the three and six months ended June 1, 2012, we determined there were no material other-than-temporary impairments on our cost method investments.

As of June 1, 2012, the carrying value of our lease receivables approximated fair value, based on Level 2 valuation inputs which include Treasury rates, LIBOR rates and applicable credit spreads. See Note 12 for further details regarding our investment in lease receivables. The fair value of our long-term debt was approximately $1.6 billion as of June 1, 2012, based on Level 2 quoted prices in inactive markets. See Note 13 for further details regarding our debt.