Fair Value Measurements (Tables)

9 Months Ended

Sep. 27, 2014

Financial Assets and Liabilities Carried at Fair Value

Financial assets and liabilities carried at fair value as of September 27, 2014, are classified below (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	182,470	$	0	$	0	$	182,470
Obligations of government-sponsored enterprises (1)		0		40,631		0		40,631
State and municipal bonds		0		49,022		0		49,022
Corporate securities		0		183,418		2,400		185,818
Other investments		0		23,765		0		23,765

Investments subtotal		182,470		296,836		2,400		481,706
Forward contracts (2)	$	3,416	$	6,206	$	0	$	9,622
Money market investments related to the deferred compensation plan		5,698		0		0		5,698

Total assets at fair value	$	191,584	$	303,042	$	2,400	$	497,026

Liabilities:
Forward interest rate swap contracts (3)	$	0	$	3,472	$	0	$	3,472
Liabilities related to the deferred compensation plan		5,698		0		0		5,698

Total liabilities at fair value	$	5,698	$	3,472	$	0	$	9,170

Financial assets and liabilities carried at fair value as of December 31, 2013, are classified below (in thousands):


	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	89,626	$	0	$	0	$	89,626
Obligations of government-sponsored enterprises (1)		0		33,510		0		33,510
State and municipal bonds		0		51,627		0		51,627
Corporate securities		0		163,832		2,588		166,420
Other investments		0		11,785		0		11,785

Investments subtotal		89,626		260,754		2,588		352,968
Money market investments related to the deferred compensation plan		4,827		0		0		4,827

Total assets at fair value	$	94,453	$	260,754	$	2,588	$	357,795

Liabilities:
Forward contracts (2)	$	1,165	$	1,578	$	0	$	2,743
Liabilities related to the deferred compensation plan		4,827		0		0		4,827

Total liabilities at fair value	$	5,992	$	1,578	$	0	$	7,570

1)	Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit Banks and the Federal Home Loan Bank.

2)	The fair value of forward contracts are calculated as follows:

Fair value of a collar or put option contract associated with forecasted sales hedges are calculated using bid and ask rates for similar contracts.

Fair value of regular forward contracts associated with forecasted sales hedges are calculated using the period-end exchange rate adjusted for current forward points.

Fair value of balance sheet hedges are calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end. If this is the case, the fair value is calculated at the rate at which the hedge is being settled.

3)	The fair value of forward interest rate swap contracts is based upon a valuation model that uses relevant observable market inputs at quoted intervals, such as forward yield curves, and is adjusted for Zebra’s own credit risk and the interest rate swap terms.

Assets Measured at Fair Value on Recurring Basis

The following table presents Zebra’s activity for assets measured at fair value on a recurring basis using significant unobservable inputs, Level 3, for the following periods (in thousands):


	Nine Months Ended
	September 27, 2014			September 28, 2013
Balance at beginning of the year	$	2,588		$	2,588
Transfers to Level 3		0			0
Total losses (realized or unrealized):
Included in earnings		(600	)		0
Included in other comprehensive income (loss)		412			0
Purchases and settlements (net)		0			0

Balance at end of period	$	2,400		$	2,588

Total gains and (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of period	$	(412	)	$	0

Summary of Short-Term and Long-Term Investments

The following is a summary of short-term and long-term investments (in thousands):


	As of September 27, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	182,354	$	123	$	(7	)	$	182,470
Obligations of government-sponsored enterprises		40,632		2		(3	)		40,631
State and municipal bonds		48,914		113		(5	)		49,022
Corporate securities		185,145		756		(83	)		185,818
Other investments		23,762		15		(12	)		23,765

Total investments	$	480,807	$	1,009	$	(110	)	$	481,706


	As of December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	89,617	$	27	$	(18	)	$	89,626
Obligations of government-sponsored enterprises		33,506		5		(1	)		33,510
State and municipal bonds		51,573		82		(28	)		51,627
Corporate securities		166,642		453		(675	)		166,420
Other investments		11,771		15		(1	)		11,785

Total investments	$	353,109	$	582	$	(723	)	$	352,968

Maturity Dates of Investment

The maturity dates of investments are as follows (in thousands):


	As of September 27, 2014
	Amortized Cost		Estimated Fair Value
Less than 1 year	$	135,482	$	135,603
1 to 5 years		342,925		343,703
6 to 10 years		2,400		2,400
Thereafter		0		0

Total	$	480,807	$	481,706

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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