Fair Value Measurements

6 Months Ended

Jun. 03, 2016

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 3, 2016.

The fair value of our financial assets and liabilities at June 3, 2016 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	$	10,997	$	—	$	10,997	$	—
Money market mutual funds	576,242		576,242		—		—
Time deposits	15,460		15,460		—		—
Short-term investments:
Asset-backed securities	97,942		—		97,942		—
Corporate bonds and commercial paper	2,123,071		—		2,123,071		—
Foreign government securities	1,281		—		1,281		—
Municipal securities	141,074		—		141,074		—
U.S. agency securities	58,194		—		58,194		—
U.S. Treasury securities	1,010,467		—		1,010,467		—
Prepaid expenses and other current assets:
Foreign currency derivatives	8,214		—		8,214		—
Other assets:
Deferred compensation plan assets	39,301		1,095		38,206		—
Interest rate swap derivatives	30,201		—		30,201		—
Total assets	$	4,112,444	$	592,797	$	3,519,647	$	—

Liabilities:
Accrued expenses:
Foreign currency derivatives	$	2,511	$	—	$	2,511	$	—
Total liabilities	$	2,511	$	—	$	2,511	$	—

The fair value of our financial assets and liabilities at November 27, 2015 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:
Money market mutual funds	$	482,479	$	482,479	$	—	$	—
Municipal securities	1,849		—		1,849		—
Time deposits	13,461		13,461		—		—
U.S. Treasury securities	26,400		—		26,400		—
Short-term investments:
Asset-backed securities	83,314		—		83,314		—
Corporate bonds and commercial paper	1,886,914		—		1,886,914		—
Foreign government securities	1,268		—		1,268		—
Municipal securities	137,332		—		137,332		—
U.S. agency securities	130,468		—		130,468		—
U.S. Treasury securities	872,228		—		872,228		—
Prepaid expenses and other current assets:
Foreign currency derivatives	19,126		—		19,126		—
Other assets:
Deferred compensation plan assets	32,063		971		31,092		—
Interest rate swap derivatives	19,821		—		19,821		—
Total assets	$	3,706,723	$	496,911	$	3,209,812	$	—

Liabilities:
Accrued expenses:
Foreign currency derivatives	$	2,154	$	—	$	2,154	$	—
Total liabilities	$	2,154	$	—	$	2,154	$	—

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 and derivatives having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. 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 also 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 3, 2016, we determined there was an immaterial other-than-temporary impairment on certain of our cost method investments and wrote down the investments to fair value. For the three and six months ended May 29, 2015, we determined there were no other-than-temporary impairments on our cost method investments.

As of June 3, 2016, the carrying value of our lease receivables approximated fair value, based on Level 2 valuation inputs which include Treasury rates, London Interbank Offered Rate (“LIBOR”) interest rates and applicable credit spreads. See Note 11 for further details regarding our investment in lease receivable.

The fair value of our senior notes was $2.03 billion as of June 3, 2016, based on observable market prices in less active markets and categorized as Level 2. See Note 12 for further details regarding our debt.