Fair Value Measurements

9 Months Ended

Dec. 28, 2012

Fair Value Measurements

Note 3 — Fair Value Measurements

In accordance with the authoritative guidance for financial assets and liabilities measured at fair value on a recurring basis (ASC 820), the Company prioritizes the inputs used to measure fair value from market-based assumptions to entity specific assumptions:

• Level 1 — Inputs based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

• Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 — Inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments valuation.

The following tables present the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 28, 2012 and March 30, 2012:

	Fair Value as of December 28, 2012		Level 1		Level 2		Level 3
	(In thousands)
Assets
Cash equivalents	$	58,166	$	58,166	$	—	$	—
Total assets measured at fair value on a recurring basis	$	58,166	$	58,166	$	—	$	—
Liabilities
Foreign currency forward contracts	$	179	$	—	$	179	$	—
Total liabilities measured at fair value on a recurring basis	$	179	$	—	$	179	$	—

	Fair Value as of    March 30, 2012		Level 1		Level 2		Level 3
	(In thousands)
Assets
Cash equivalents	$	70,379	$	70,379	$	—	$	—
Total assets measured at fair value on a recurring basis	$	70,379	$	70,379	$	—	$	—
Liabilities
Foreign currency forward contracts	$	443	$	—	$	443	$	—
Total liabilities measured at fair value on a recurring basis	$	443	$	—	$	443	$	—

The following section describes the valuation methodologies the Company uses to measure financial instruments at fair value:

Cash equivalents — The Company’s cash equivalents consist of money market funds. Money market funds are valued using quoted prices for identical assets in an active market with sufficient volume and frequency of transactions (Level 1).

Foreign currency forward contracts — The Company uses derivative financial instruments to manage foreign currency risk relating to foreign exchange rates. The Company does not use these instruments for speculative or trading purposes. The Company’s objective is to reduce the risk to earnings and cash flows associated with changes in foreign currency exchange rates. Derivative instruments are recognized as either assets or liabilities in the accompanying condensed consolidated financial statements and are measured at fair value. Gains and losses resulting from changes in the fair values of those derivative instruments are recorded to earnings or other comprehensive income (loss) depending on the use of the derivative instrument and whether it qualifies for hedge accounting. The Company’s foreign currency forward contracts are valued using standard calculations/models that are primarily based on observable inputs, such as foreign currency exchange rates, or can be corroborated by observable market data (Level 2).

Long-term debt — The Company’s long-term debt consists of borrowings under (1) capital lease obligations reported at the present value of future minimum lease payments with current accrued interest, and (2) the Company’s 6.875% Senior Notes due 2020 (the 2020 Notes) reported at amortized cost. However, for disclosure purposes, the Company is required to measure the fair value of outstanding debt on a recurring basis. As of December 28, 2012, the fair value of the Company’s outstanding long-term debt related to the initial $275.0 million of 2020 Notes (the Initial 2020 Notes) was determined using quoted prices in active markets (Level 1) and was approximately $287.4 million. As of March 30, 2012, the fair value of the Company’s outstanding long-term debt related to the Initial 2020 Notes had been determined using recent market transactions for similar notes (Level 2) and was approximately $280.2 million. The Initial 2020 Notes were exchanged in August 2012 for substantially identical Initial 2020 Notes that had been registered with the Securities and Exchange Commission (SEC), which resulted in a change of the inputs used to measure the fair value of the Initial 2020 Notes from Level 2 (as of March 30, 2012) to Level 1 (as of December 28, 2012). The fair value of the Company’s outstanding long-term debt related to the additional $300.0 million of 2020 Notes issued in October 2012 (the Additional 2020 Notes) was determined using recent market transactions for similar notes (Level 2) and was approximately $313.5 million as of December 28, 2012. The Additional 2020 Notes were exchanged subsequent to the quarter end in January 2013 for substantially identical Additional 2020 Notes that had been registered with the SEC. The fair value of the Company’s outstanding long-term debt related to its former 8.875% Senior Notes due 2016 (the 2016 Notes, and collectively with the 2020 Notes, the Senior Notes), which were repurchased and redeemed in connection with the issuance of the Additional 2020 Notes, had been determined using quoted prices in active markets (Level 1) and was approximately $298.4 million as of March 30, 2012. The fair value of the Company’s capital lease obligations was estimated to approximate their carrying value based on current rates (Level 2).

Satellite performance incentives obligation — The Company’s contract with the manufacturer of ViaSat-1 requires the Company to make monthly in-orbit satellite performance incentive payments, including interest at 7.0%, over a fifteen-year period from December 2011 to December 2026, subject to the continued satisfactory performance of the satellite. The Company recorded the net present value of these expected future payments as a liability and as a component of the cost of the satellite. However, for disclosure purposes, the Company is required to measure the fair value of outstanding satellite performance incentives on a recurring basis. The fair value of the Company’s outstanding satellite performance incentives is estimated to approximate their carrying value based on current rates (Level 2).