FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES

6 Months Ended

Sep. 25, 2015

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 for the most part included in other noncurrent assets on the condensed consolidated balance sheets and primarily 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.

During the three-month period ended September 26, 2014, the Company accrued for certain contingent consideration in connection with its business acquisitions, which is measured at fair value based on internal cash flow models and other inputs. During the six-month period ended September 25, 2015, no additions to accrual, payments or fair value adjustments were incurred. The following table summarizes the activities related to contingent consideration:



	Three-Month Periods Ended				Six-Month Periods Ended
	September 25, 2015		September 26, 2014		September 25, 2015		September 26, 2014
	(In thousands)
Beginning balance	$	4,500	$	11,300	$	4,500	$	11,300
Additions to accrual	—		4,500		—		4,500
Payments	—		—		—		—
Fair value adjustments	—		—		—		—
Ending balance	$	4,500	$	15,800	$	4,500	$	15,800

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 the fair value approximates carrying value. Significant increases in either of the major unobservable inputs (credit spread, risk free interest rate) in isolation would result in lower fair value estimates, however the impact is not meaningful. The interrelationship between these inputs is also insignificant. Refer to note 10 for a reconciliation of the change in the deferred purchase price receivable during the three-month and six-month periods ended September 25, 2015 and September 26, 2014.

There were no transfers between levels in the fair value hierarchy during the three-month and six-month periods ended September 25, 2015 and September 26, 2014.

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:



	Fair Value Measurements as of September 25, 2015
	Level 1		Level 2			Level 3			Total
	(In thousands)
Assets:
Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet)	$	—	$	447,217		$	—		$	447,217
Deferred purchase price receivable (Note 10)	—		—			537,619			537,619
Foreign exchange contracts (Note 8)	—		19,626			—			19,626
Deferred compensation plan assets:									0
Mutual funds, money market accounts and equity securities	8,939		37,676			—			46,615
Liabilities:									0
Foreign exchange contracts (Note 8)	$	—	$	(26,504	)	$	—		$	(26,504	)
Contingent consideration in connection with business acquisitions	—		—			(4,500		)	(4,500		)

	Fair Value Measurements as of March 31, 2015
	Level 1		Level 2			Level 3			Total
	(In thousands)
Assets:
Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet)	$	—	$	674,859		$	—		$	674,859
Deferred purchase price receivable (Note 10)	—		—			600,672			600,672
Foreign exchange contracts (Note 8)	—		25,829			—			25,829
Deferred compensation plan assets:									0
Mutual funds, money market accounts and equity securities	9,068		37,041			—			46,109
Liabilities:									0
Foreign exchange contracts (Note 8)	$	—	$	(31,057	)	$	—		$	(31,057	)
Contingent consideration in connection with business acquisitions	—		—			(4,500		)	(4,500		)

Other financial instruments

The following table presents the Company’s debt not carried at fair value:



	As of September 25, 2015				As of March 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Hierarchy
	(In thousands)
Term Loan, including current portion, due in installments through August 2018	$	588,750	$	586,177	$	592,500	$	582,131	Level 1
Term Loan, including current portion, due in installments through March 2019	468,750		466,992		475,000		465,500		Level 1
4.625% Notes due February 2020	500,000		520,625		500,000		523,750		Level 1
5.000% Notes due February 2023	500,000		502,750		500,000		543,150		Level 1
4.750% Notes due June 2025	595,402		585,000		—		—		Level 1
Total	$	2,652,902	$	2,661,544	$	2,067,500	$	2,114,531

The term loans and Notes due February 2020, February 2023 and June 2025 are valued based on broker trading prices in active markets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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