Fair Value Measurements

3 Months Ended

Apr. 02, 2016

Fair value is defined under ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:


•	Level 1 - Quoted prices for identical assets or liabilities in active markets.


•	Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.


•	Level 3 - Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable.

We measure certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale securities and foreign currency derivatives. The fair value of certain financial assets and liabilities was determined using the following inputs:



	Fair Value Measurements at April 2, 2016
(In thousands)	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available-for-sale securities⁽¹⁾
Commercial paper	$	7,995		$	—	$	7,995		$	—
Money market funds	11,364			11,364		—			—
U.S. treasury bills and notes	51,973			51,973		—			—
Securities and obligations of U.S. government agencies	123,189			—		123,189			—
	194,521			63,337		131,184			—
Foreign currency derivatives⁽²⁾	6			—		6			—
Foreign currency derivatives⁽³⁾	(6		)	—		(6		)	—
	$	194,521		$	63,337	$	131,184		$	—

	Fair Value Measurements at December 31, 2015
(In thousands)	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available-for-sale securities⁽¹⁾
Commercial paper	$	9,996		$	—	$	9,996		$	—
Money market funds	9,074			9,074		—			—
U.S. treasury bills and notes	56,872			56,872		—			—
Securities and obligations of U.S. government agencies	128,023			—		128,023			—
	203,965			65,946		138,019			—
Foreign currency derivatives⁽²⁾	43			—		43			—
Foreign currency derivatives⁽³⁾	(4		)	—		(4		)	—
	$	204,004		$	65,946	$	138,058		$	—

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(1)	Included in cash and cash equivalents and short-term investments on our condensed consolidated balance sheets. See “Investments” in Note 7 for further details.


(2)	Included in other current assets on our condensed consolidated balance sheets. Consisted of forward foreign exchange contracts for Japanese yen. See “Derivative Instruments and Hedging” in Note 8 for further details.


(3)	Included in other current liabilities on our condensed consolidated balance sheets. Consisted of forward foreign exchange contracts for Japanese yen. See “Derivative Instruments and Hedging” in Note 8 for further details.

- 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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