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Investments and Fair Value Measurements
 12 Months Ended
Jun. 28, 2014
Investments and Fair Value Measurements  
Investments and Fair Value Measurements

 

Note 7. Investments and Fair Value Measurements

Available-For-Sale Investments

        The Company's investments in marketable debt and equity securities were primarily classified as available-for-sale investments.

        As of June 28, 2014 the Company's available-for-sale securities were as follows (in millions):

 
   Amortized
Cost / Carrying
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair Value		  

Debt securities:

                          

U.S. treasuries

   $ 36.8   $ —   $ —   $ 36.8  

U.S. agencies

     70.0     —     —     70.0  

Municipal bonds and sovereign debt instruments

     16.8     —     —     16.8  

Asset-backed securities

     94.7     0.1     (0.2 )   94.6  

Corporate securities

     370.5     0.2     —     370.7  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total debt available-for-sale securities

   $ 588.8   $ 0.3   $ (0.2 ) $ 588.9  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

        The Company generally classifies debt securities as cash equivalents, short-term investments, or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are classified as short-term investments. As of June 28, 2014, of the total estimated fair value, $39.8 million was classified as cash equivalents, $548.3 million was classified as short-term investments and $0.8 million was classified as other non-current assets.

        In addition to the amounts presented above, as of June 28, 2014, the Company's short-term investments classified as trading securities, related to the deferred compensation plan, were $3.9 million, of which $0.4 million was invested in debt securities, $0.7 million was invested in money market instruments and funds and $2.8 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

        The Company recorded no other-than-temporary impairment charges in fiscal 2014 and 2013. During fiscal 2012, the Company recorded other-than-temporary impairment charges of $0.3 million on asset-backed securities.

        As of June 28, 2014, the Company's total gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument, were as follows (in millions):

 
   Less than
12 Months		   Greater than
12 Months		   Total  

Asset-backed securities

   $ —   $ 0.2   $ 0.2  

Corporate securities

     —     —     —  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total gross unrealized losses

   $ —   $ 0.2   $ 0.2  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

        As of June 28, 2014, contractual maturities of the Company's debt securities classified as available-for-sale securities were as follows (in millions):

 
   Amortized
Cost / Carrying
Cost		   Estimated
Fair Value		  

Amounts maturing in less than 1 year

   $ 412.5   $ 412.6  

Amounts maturing in 1 - 5 years

     175.3     175.5  

Amounts maturing more than 5 years

     1.0     0.8  
           
​ ​ ​ ​ ​ ​ ​ ​

Total debt available-for-sale securities

   $ 588.8   $ 588.9  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

        As of June 29, 2013, the Company's available-for-sale securities were as follows (in millions):

 
   Amortized
Cost / Carrying
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair Value		  

Debt securities:

                          

U.S. treasuries

   $ 12.0   $ —   $ —   $ 12.0  

U.S. agencies

     52.4     —     —     52.4  

Municipal bonds and sovereign debt instruments

     12.7     —     —     12.7  

Asset-backed securities

     15.5     —     (0.3 )   15.2  

Corporate securities

     135.1     0.7     (0.1 )   135.7  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total debt available-for-sale securities

   $ 227.7   $ 0.7   $ (0.4 ) $ 228.0  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

        As of June 29, 2013, of the total estimated fair value, $26.2 million was classified as cash equivalents, $201.0 million was classified as short-term investments, and $0.8 million was classified as other non-current assets.

        In addition to the amounts presented above, as of June 29, 2013, the Company's short-term investments classified as trading securities, related to the deferred compensation plan, were $4.2 million, of which $0.8 million was invested in debt securities, $0.3 million was invested in money market instruments and funds and $3.1 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net.

        As of June 29, 2013, the Company's total gross unrealized losses on available-for-sale securities, aggregated by type of investment instrument, were as follows (in millions):

 
   Less than
12 Months		   Greater than
12 Months		   Total  

Asset-backed securities

   $ —   $ 0.3   $ 0.3  

Corporate securities

     0.1     —     0.1  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total gross unrealized losses

   $ 0.1   $ 0.3   $ 0.4  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Fair Value Measurements

        Assets measured at fair value at June 28, 2014 are summarized below (in millions):

 
    
   Fair value measurement as of
June 28, 2014		  
 
   Total   Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		   Significant
Other
Observable
Inputs
(Level 2)		  

Assets:

                    

Debt available-for-sale securities

                    

U.S. treasuries

   $ 36.8   $ 36.8   $ —  

U.S. agencies

     70.0     —     70.0  

Municipal bonds and sovereign debt instruments

     16.8     —     16.8  

Asset-backed securities

     94.6     —     94.6  

Corporate securities

     370.7     —     370.7  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total debt available-for-sale securities

     588.9     36.8     552.1  

Money market funds

     178.7     178.7     —  

Trading securities

     3.9     3.9     —  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets(1)

   $ 771.5   $ 219.4   $ 552.1  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
(1)
$183.2 million in cash and cash equivalents, $552.2 million in short-term investments, $31.5 million in restricted cash, and $4.6 million in other non-current assets on the Company's consolidated balance sheets.

        Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions about the factors that market participants would use in valuing the asset or liability.

        The Company's cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on quoted prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

  • •
    Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds and U.S. Treasury securities as they are traded with sufficient volume and frequency of transactions.

    •
    Level 2 includes financial instruments for which the valuations are based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 2 instruments of the Company generally include certain U.S. and foreign government and agency securities, commercial paper, corporate and municipal bonds and notes, asset-backed securities, and foreign currency forward contracts. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events.

    •
    Level 3 includes financial instruments for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. As of June 28, 2014 and June 29, 2013, the Company did not hold any Level 3 investment securities.

Foreign Currency Forward Contracts

        The Company has foreign subsidiaries that operate and sell the Company's products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts and other instruments to manage foreign currency risk associated with foreign currency denominated monetary assets and liabilities, primarily certain short-term intercompany receivables and payables and to reduce the volatility of earnings and cash flows related to foreign-currency transactions.

        The forward contracts, most with a term of less than 120 days, were transacted near quarter end; therefore, the fair value of the contracts as of both June 28, 2014 and June 29, 2013 is not significant. The change in the fair value of these foreign currency forward contracts is recorded as gain or loss in the Company's Consolidated Statements of Operations as a component of Interest and other income (expense), net.