Fair Value Measurements

12 Months Ended

Apr. 03, 2011


Note 4.	Fair Value Measurements

Fair value is 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 must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is 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. A description of the three levels of inputs is as follows:


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

	•	Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as 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 market data for substantially the full term of the assets or liabilities.

	•	Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets measured at fair value on a recurring basis as of April 3, 2011 and March 28, 2010 are as follows:


	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(In thousands)

April 3, 2011
Cash and cash equivalents	$	146,281	$	1,499	$	—	$	147,780

Investment securities:
U.S. government and agency securities		55,753		—		—		55,753
Corporate debt obligations		—		138,436		—		138,436
Asset and mortgage-backed securities		—		22,490		—		22,490
Municipal bonds		—		17,941		—		17,941
Non-U.S. government and agency securities		—		1,676		—		1,676

		55,753		180,543		—		236,296

	$	202,034	$	182,042	$	—	$	384,076

March 28, 2010
Cash and cash equivalents	$	190,308	$	—	$	—	$	190,308

Investment securities:
U.S. government and agency securities		37,976		—		—		37,976
Corporate debt obligations		—		83,003		—		83,003
Asset and mortgage-backed securities		—		19,115		—		19,115
Municipal bonds		—		5,923		—		5,923
Certificates of deposit		15,592		—		—		15,592
Auction rate debt securities		—		—		17,951		17,951
Auction rate preferred securities		—		—		4,366		4,366
Put options related to auction rate securities		—		—		1,439		1,439

		53,568		108,041		23,756		185,365

	$	243,876	$	108,041	$	23,756	$	375,673

The Company’s investments classified within Level 2 were primarily valued based on valuations obtained from a third-party pricing service. To estimate fair value, the pricing service utilizes industry standard valuation models, including both income and market-based approaches for which all significant inputs are observable either directly or indirectly. These inputs include reported trades and broker/dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs.

The Company’s investments in auction rate securities and the related put options were classified within Level 3 because there were no active markets for these securities and the Company was unable to obtain independent valuations from market sources. Therefore, the auction rate securities and the related put options were primarily valued based on an income approach using estimates of future cash flows. The assumptions used in preparing these discounted cash flow models included estimates for the amount and timing of future interest and principal payments, the collateralization of underlying security investments, the creditworthiness of the issuer and the rate of return required by investors to own these securities, including call and liquidity premiums.

A summary of the changes in Level 3 assets measured at fair value on a recurring basis for fiscal 2011 and 2010 is as follows:


	Balance		Total Realized			Sales and Other			Balance
Year Ended April 3, 2011	March 28, 2010		Gains (Losses)			Settlements			April 3, 2011
	(In thousands)

Auction rate debt securities	$	17,951	$	1,299		$	(19,250	)	$	—
Auction rate preferred securities		4,366		184			(4,550	)		—
Put options related to auction rate securities		1,439		(1,439	)		—			—

	$	23,756	$	44		$	(23,800	)	$	—


						Change in
	Balance		Total Realized			Unrealized		Sales and Other			Balance
Year Ended March 28, 2010	March 29, 2009		Gains (Losses)			Losses		Settlements			March 28, 2010
	(In thousands)

Auction rate debt securities	$	20,741	$	2,434		$	—	$	(5,224	)	$	17,951
Auction rate preferred securities		4,964		5,834			5		(6,437	)		4,366
Put options related to auction rate securities		9,281		(7,842	)		—		—			1,439

	$	34,986	$	426		$	5	$	(11,661	)	$	23,756

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, 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 Company 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 risk is 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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