11. FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:

        Level 1— Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

        The Company has deferred compensation plans for its officers and certain other employees. Amounts deferred under the plans are invested in hypothetical investments selected by the participant or the participant's investment manager. The Company's deferred compensation plan assets are included in other noncurrent assets on the consolidated balance sheets and include investments in equity securities that are valued using active market prices.

        Level 2— Applies to assets or liabilities for which there are inputs other than quoted prices included within level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets) such as cash and cash equivalents and money market funds; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

        The Company values foreign exchange forward contracts using level 2 observable inputs which primarily consist of an income approach based on the present value of the forward rate less the contract rate multiplied by the notional amount.

        The Company's cash equivalents are comprised of bank deposits and money market funds, which are valued using level 2 inputs, such as interest rates and maturity periods. Due to their short-term nature, their carrying amount approximates fair value.

        The Company's deferred compensation plan assets also include money market funds, mutual funds, corporate and government bonds and certain convertible securities that are valued using prices obtained from various pricing sources. These sources price these investments using certain market indices and the performance of these investments in relation to these indices. As a result, the Company has classified these investments as level 2 in the fair value hierarchy.

        Level 3— Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company has accrued for contingent consideration in connection with its business acquisitions, which is measured at fair value based on certain internal models and inputs. The following table summarizes the activities related to contingent consideration:

	As of March 31,

	2014			2013
	(In thousands)
Beginning balance	$	25,000		$	1,151
Additions to accrual		—			25,000
Payments		—			(1,151	)
Fair value adjustments		(13,700	)		—


Ending balance	$	11,300		$	25,000

The Company values deferred purchase price receivables relating to its Asset-Backed Securitization Program based on a discounted cash flow analysis using unobservable inputs (i.e. level 3 inputs), which are primarily risk free interest rates adjusted for the credit quality of the underlying creditor. Due to its high credit quality and short term maturity, their fair value approximates carrying value. Significant increases in either of the significant unobservable inputs (credit spread or risk free interest rate) in isolation would result in lower fair value estimates, however the impact is insignificant. The interrelationship between these inputs is also insignificant. Refer to note 10 to the consolidated financial statements for a reconciliation of the change in the deferred purchase price receivable.

As of March 31, 2013, the Company had warrants to purchase up to 1.35 million shares of common stock of a certain supplier at a weighted-average price of $7.33 per share. The warrants were to expire on May 18, 2018. These fully vested warrants, which were derivative instruments, were fair valued at each reporting date with gains or losses from changes in fair value recognized in the consolidated statements of operations. The Company valued these warrants based on the Black-Scholes option-valuation model using unobservable inputs classified as level 3 in the fair value hierarchy. Significant changes in any of the unobservable inputs in isolation would have resulted in a change in the fair value estimate, but in each case, the amount would have been insignificant. The interrelationship between these inputs was also insignificant. As of March 31, 2013, the Company used the following assumptions to value these warrants:



Remaining life	5 years
Volatility	58	%
Dividend yield	0	%
Risk-free rate	0.80	%

During fiscal year 2014 these warrants were exercised and the underlying shares were sold.

The following table summarizes the changes in the fair value of these warrants:

	As of March 31,

	2014			2013
	(In thousands)
Beginning balance	$	74,437		$	—
Exercise of warrants		(67,326	)		—
Fair value adjustment		(7,111	)		74,437


Ending balance	$	—		$	74,437

There were no transfers between levels in the fair value hierarchy during fiscal years 2014 and 2013.

Financial Instruments Measured at Fair Value on a Recurring Basis

The following table presents the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 and 2013:

	Fair Value Measurements as of March 31, 2014

	Level 1		Level 2			Level 3			Total
	(In thousands)
Assets:
Money market funds and time deposits (Note 2)	$	—	$	552,928		$	—		$	552,928
Deferred purchase price receivable (Note 10)		—		—			470,908			470,908
Foreign exchange forward contracts (Note 8)		—		8,186			—			8,186
Deferred compensation plan assets:
Mutual funds, money market accounts and equity securities		9,456		36,751			—			46,207
Liabilities:
Foreign exchange forward contracts (Note 8)	$	—	$	(17,406	)	$	—		$	(17,406	)
Contingent consideration in connection with acquistions		—		—			(11,300	)		(11,300	)

	Fair Value Measurements as of March 31, 2013

	Level 1		Level 2			Level 3			Total
	(In thousands)
Assets:
Money market funds and time deposits (Note 2)	$	—	$	497,390		$	—		$	497,390
Deferred purchase price receivable (Note 10)		—		—			412,357			412,357
Foreign exchange forward contracts (Note 8)		—		27,563			—			27,563
Warrants to purchase common shares (Note 2)		—		—			74,437			74,437
Deferred compensation plan assets:
Mutual funds, money market accounts and equity securities		6,931		40,972			—			47,903
Liabilities:
Foreign exchange forward contracts (Note 8)	$	—	$	(15,290	)	$	—		$	(15,290	)
Contingent consideration in connection with acquistions		—		—			(25,000	)		(25,000	)

Assets Measured at Fair Value on a Nonrecurring Basis

The Company has certain long-lived assets that are measured at fair value on a nonrecurring basis, and are as follows:

	Fair Value Measurements as of March 31, 2014

	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Assets held for sale	$	—	$	43,504	$	—	$	43,504

	Fair Value Measurements as of March 31, 2013

	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Assets held for sale	$	—	$	11,089	$	—	$	11,089
Property and equipment		—		25,331		—		25,331

Assets held for sale

Assets held for sale are recorded at the lesser of the carrying value or fair value, which is based on comparable sales from prevailing market data (level 2 inputs). These assets primarily represent manufacturing facilities that have been closed as part of the Company's historical facility consolidations and that met the criteria to be classified as held for sale. During fiscal year 2014, the Company transferred $59.4 million of assets to held for sale, and expects to sell these within a period of twelve months. Disposals of assets held for sale totaled $24.5 million during fiscal year 2014, which resulted in a gain of $9.2 million, and was included as a component of cost of sales in the consolidated statement of operations. Impairment charges during fiscal year 2014 were not significant for assets that were no longer in use and held for sale. No impairment charges were recorded for assets held for sale during fiscal year 2013.

Property and equipment

During the fiscal year 2013, the Company recognized impairment charges relating to certain long-lived assets held and used since the carrying value of such assets exceeded the fair value, based on the sales of comparable assets, as a result of its restructuring activities as further discussed in note 14 to the consolidated financial statements.

There were no material fair value adjustments or other transfers between levels in the fair value hierarchy for these long-lived assets during the fiscal years 2014 and 2013.

Other financial instruments

The following table presents the Company's liabilities not carried at fair value as at March 31, 2014 and 2013:

	As of March 31, 2014				As of March 31, 2013

	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Hierarchy
	(In thousands)				(In thousands)
Term Loan, including current portion, due October 2014		—		—	$	170,340	$	170,496	Level 1
Term Loan, including current portion, due in installments through August 2018		600,000		591,750		—		—	Level 1
Term Loan, including current portion, due in installments through March 2019		500,000		497,190		517,500		518,794	Level 1
4.625% Notes due February 2020		500,000		504,688		500,000		507,190	Level 1
5.000% Notes due February 2023		500,000		517,650		500,000		500,000	Level 1
Asia Term Loans		—		—		375,000		375,343	Level 2


Total	$	2,100,000	$	2,111,278	$	2,062,840	$	2,071,823

The term loans and Notes due February 2020 and February 2023 are valued based on broker trading prices in active markets.

Asia term loans—The Company's Asia Term Loans were not traded publicly; however, as the pricing, maturity and other pertinent terms of these loans closely approximate those of the Term Loans due October 2014 and March 2019, management estimates the respective trading prices would be approximately the same.