FAIR VALUE MEASUREMENTS

Accounting Standards Codification ("ASC") Topic 820 provides a consistent definition of fair value, which focuses on exit price, prioritizes the use of market-based inputs over entity-specific inputs for measuring fair value and establishes a three-level hierarchy for fair value measurements. ASC Topic 820 requires fair value measurements to be classified and disclosed in one of the following three categories:


Level 1:	Quoted prices (unadjusted) in active markets for identical assets and liabilities.


Level 2:	Either direct or indirect inputs, other than quoted prices included within Level 1, which are observable for similar assets or liabilities.


Level 3:	Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

The following tables summarize the valuation of the Company’s financial instruments by the above pricing categories as of March 30, 2013, June 30, 2012, and March 31, 2012:



	Fair Value Measurements as of March 30, 2013 Using:
	Total as of March 30, 2013		Quoted Prices In Active Markets (Level 1)		Prices With Other Observable Inputs (Level 2)		Prices With Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	113,312	$	113,312	$	—	$	—
Foreign currency forward contracts, net	8,307		—		8,307		—
Funds associated with Israeli post employment benefits	16,451		—		16,451		—
Total	$	138,070	$	113,312	$	24,758	$	—
Liabilities:
Contingent consideration	$	900	$	—	$	—	$	900
Interest rate swap agreements	13,306		—		13,306		—
Total	$	14,206	$	—	$	13,306	$	900



	Fair Value Measurements as of June 30, 2012 Using:
	Total as of June 30, 2012		Quoted Prices In Active Markets (Level 1)		Prices With Other Observable Inputs (Level 2)		Prices With Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	479,548	$	479,548	$	—	$	—
Investment securities	6,470		—		—		6,470
Funds associated with Israeli post employment benefits	14,973		—		14,973		—
Total	$	500,991	$	479,548	$	14,973	$	6,470
Liabilities:
Contingent consideration	$	2,900	$	—	$	—	$	2,900
Interest rate swap agreements	14,706		—		14,706		—
Foreign currency forward contracts, net	5,567		—		5,567		—
Total	$	23,173	$	—	$	20,273	$	2,900



	Fair Value Measurements as of March 31, 2012 Using:
	Total as of March 31, 2012		Quoted Prices In Active Markets (Level 1)		Prices With Other Observable Inputs (Level 2)		Prices With Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	451,521	$	451,521	$	—	$	—
Investment securities	6,570		—		—		6,570
Funds associated with Israeli post employment benefits	15,264		—		15,264		—
Total	$	473,355	$	451,521	$	15,264	$	6,570
Liabilities:
Contingent consideration	$	2,900	$	—	$	—	$	2,900
Foreign currency forward contracts, net	698		—		698		—
Interest rate swap agreements	13,248		—		13,248		—
Total	$	16,846	$	—	$	13,946	$	2,900

The carrying amounts of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, short-term debt and variable rate long-term debt, approximate their fair value. As of March 30, 2013, the carrying value and fair value of the Company’s fixed rate long-term debt were $965,000 and $1,028,841, respectively. As of June 30, 2012, the carrying value and fair value of the Company’s fixed rate long-term debt were $965,000 and $1,050,343, respectively. As of March 31, 2012, the carrying value and fair value of the Company’s fixed rate long-term debt were $965,000 and $1,012,670, respectively. Fair values were calculated by discounting the future cash flows of the financial instruments to their present value, using interest rates currently offered for borrowings and deposits of similar nature and remaining maturities. There were no transfers between Level 1 and Level 2 during the three and nine months ended March 30, 2013. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

As of March 30, 2013, the Company had $16,451 deposited in funds managed by financial institutions that are designated by management to cover post employment benefits for its Israeli employees. Israeli law generally requires payment of severance upon dismissal of an employee or upon termination of employment in certain other circumstances. These funds are included in the Company’s long-term investments reported in other non-current assets. The Company’s Level 2 securities values are determined using prices for recently traded financial instruments with similar underlying terms, as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

As of June 30, 2012 and March 31, 2012, the Company held auction rate securities ("ARS") that were recorded at a fair value of $6,470 and $6,570, respectively. Subsequent to a second quarter fiscal 2009 other-than-temporary impairment, the Company had recorded unrealized gains and losses on these investments in other comprehensive income because the Company had classified these investments as available-for-sale and had determined that any changes in fair value were temporary in nature. During the third quarter of fiscal 2013, one of the three ARS tranches was called by the issuer, and, as a result, the Company decided to sell all three tranches. Upon the sale, the Company recorded cash proceeds of $8,630 and recognized a loss of $1,608 within other expense, of which $828 was attributable to a decline in market value while $780 was due to foreign currency transaction loss as these U.S. dollar-denominated securities were held by the Company's Israeli subsidiary, which has a shekel functional currency.

As a result of the acquisition of CanAm completed on January 6, 2012, the Company recorded a contingent consideration liability of $2,900 on the acquisition date based upon the estimated fair value of contingent payments to the seller pending the Company's future execution of a promotion agreement with a third-party related to a certain diabetes care product. The fair value measurements for this liability are valued using Level 3 inputs. The terms of the acquisition agreement required the Company to pay the seller $2,000 upon the Company's execution of the promotion agreement with the third-party. During the first quarter of fiscal 2013, the Company executed the promotion agreement with the third-party and paid the seller the initial consideration of $2,000. Additional consideration, not to exceed $5,000, is to be paid in an amount equal to the gross revenue associated with the promotion agreement during the first year subsequent to the endorsement of the agreement. The Company estimated the fair value of the contingent consideration using probability assessments with respect to the timing of executing the agreement with the third-party, along with the expected future cash flows during the first year subsequent to the endorsement of the agreement. The assumptions associated with expected future cash flows will be evaluated each quarter. During the third quarter of fiscal 2013, the Company updated the estimated fair value of the contingent consideration and determined there was no change to the remaining fair value of $900.

The following table presents a rollforward of the assets and liabilities measured at fair value using unobservable inputs (Level 3) at March 30, 2013:



Assets:	Investment Securities (Level 3)
Balance as of June 30, 2012	$	6,470
Unrealized gains on ARS	2,160
Sale of ARS	(8,630		)
Balance as of March 30, 2013	$	—

Liabilities:	Contingent Consideration (Level 3)
Balance as of June 30, 2012	$	2,900
Payments	(2,000		)
Balance as of March 30, 2013	$	900