Fair Value Measurements

3 Months Ended

Mar. 03, 2017

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 three months ended March 3, 2017.

The fair value of our financial assets and liabilities at March 3, 2017 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	$	1,030	$	—	$	1,030	$	—
Money market mutual funds	762,830		762,830		—		—
Time deposits	20,934		20,934		—		—
Short-term investments:
Asset-backed securities	111,523		—		111,523		—
Corporate bonds and commercial paper	2,389,829		—		2,389,829		—
Municipal securities	137,107		—		137,107		—
U.S. agency securities	28,556		—		28,556		—
U.S. Treasury securities	911,706		—		911,706		—
Prepaid expenses and other current assets:
Foreign currency derivatives	26,962		—		26,962		—
Other assets:
Deferred compensation plan assets	48,892		1,698		47,194		—
Interest rate swap derivatives	4,104		—		4,104		—
Total assets	$	4,443,473	$	785,462	$	3,658,011	$	—

Liabilities:
Accrued expenses:
Foreign currency derivatives	$	1,585	$	—	$	1,585	$	—
Total liabilities	$	1,585	$	—	$	1,585	$	—

The fair value of our financial assets and liabilities at December 2, 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	$	1,249	$	—	$	1,249	$	—
Money market mutual funds	782,210		782,210		—		—
Municipal securities	1,301		—		1,301		—
Time deposits	17,920		17,920		—		—
Short-term investments:
Asset-backed securities	110,914		—		110,914		—
Corporate bonds and commercial paper	2,458,350		—		2,458,350		—
Municipal securities	134,222		—		134,222		—
U.S. agency securities	39,580		—		39,580		—
U.S. Treasury securities	1,006,919		—		1,006,919		—
Prepaid expenses and other current assets:
Foreign currency derivatives	38,112		—		38,112		—
Other assets:
Deferred compensation plan assets	42,180		1,831		40,349		—
Interest rate swap derivatives	13,117		—		13,117		—
Total assets	$	4,646,074	$	801,961	$	3,844,113	$	—

Liabilities:
Accrued expenses:
Foreign currency derivatives	$	5,246	$	—	$	5,246	$	—
Total liabilities	$	5,246	$	—	$	5,246	$	—

Our fixed income available-for-sale debt 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 independent pricing vendors who use matrix pricing valuation techniques including market approach methodologies that model information generated by market transactions involving identical or comparable assets, as well as discounted cash flow methodologies. Inputs include quoted prices in active markets for identical assets or inputs other than quoted prices that are observable either directly or indirectly in determining fair value, including benchmark yields, issuer spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. We therefore classify all of our fixed income available-for-sale securities as Level 2. We perform routine procedures such as comparing prices obtained from multiple independent sources to ensure that appropriate fair values are recorded.

The fair values of our money market mutual funds and time deposits are based on the closing price of these assets as of the reporting date. We classify our money market mutual funds and time deposits as Level 1.

Our Level 2 over-the-counter foreign currency and interest rate swap derivatives are valued using pricing models and discounted cash flow methodologies based on observable foreign exchange and interest rate data at the measurement date.

Our deferred compensation plan assets consist of money market mutual funds and other 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 months ended March 3, 2017, we determined there were no other-than-temporary impairments on our cost method investments. For the three months ended March 4, 2016, we determined there were immaterial other-than-temporary impairments on certain of our cost method investments and wrote down the investments to fair value.

As of March 3, 2017, 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 $1.98 billion as of March 3, 2017, based on observable market prices in less active markets and categorized as Level 2. See Note 12 for further details regarding our debt.